The internet and social media platforms are rich with independent users that have built sizeable audiences ranging from hundreds of thousands to millions of followers. In many cases these grass-roots campaigns have resulted in viewers that rival or top conventional media outlets. As a result, many companies have learned that they can get their product or service in front of like-minded individuals at a lower cost than television or radio commercials. In many cases, these social media endorsements are more powerful and engaging because people have a connection with the influencer they follow. As with any marketing endeavors, it is important to protect your company and follow the Federal Trade Commission (FTC) rules and regulations.
How Companies Should Protect Themselves
In a recent article by Legal Matters we have read more about his subject, and how some companies have been flagged for non-disclosure violations. These brands include Lord & Taylor and Warner Bros. Home Entertainment. Both of which had to make settlements with the FTC for violations. Specifically, they had failed to release the relationship they had with big-follow social media creators. In these specific cases, the followers were compensated roughly $4,000 for an endorsement of their product. Instagram has become feverishly popular over the last couple of years and companies need to ensure they are marketing their products or services within certain guidelines to avoid violation.
What Can Be Done to Avoid Penalties?
The most important take-away is to understand that according to FTC guidelines, consumers have a right to know whether a certain brand is being endorsed by the influencer’s own violation, or if they have a partnership with a company in exchange for free products or future payments. In this case, the influencer and the companies failed to disclose their relationship, which violates FTC’s disclosure recommendations. Remember that if your company is investing in advertising it is well worth your time to speak with an attorney to help ensure you are following FTC and online regulations. The money you pay an online influencer can pale in comparison to the amount certain violations may bring. In some cases, these disclosures can be adhered to with an online statement, or #hashtag such as #ad #paidadvertisement or #sponsoredpost at the beginning of the post. Please feel free to contact our office to learn more about how law firms such as BLPG can help protect companies in their online and social media marketing strategies.