The simple reason successful social influencers ignore the FTC

There's one simple reason many social influencers ignore influencer marketing disclosure regulations. And it's not that they're ignorant of the rules.

Many high-profile social media influencers are still disregarding disclosure guidance laid down by the Federal Trade Commission (FTC).

The FTC is the independent agency of the US government tasked with promoting consumer protection and regulating influencer marketing.

Earlier this year, the FTC sent 90 letters reminding influencers and marketers that influencers should clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media.

Many influencers ignore FTC

The letters called for a written response by the end of September, 2017. Here’s an extract from the letter:

“Please provide a written response to this letter by September 30, 2017 advising the FTC staff of whether you have a material connection with each of the brands or businesses that you endorsed in these posts: {brands and businesses}. If you have a material connection with [any of them], please describe what actions you are or will be taking to ensure that your social media posts endorsing brands and businesses with which you have a material connection clearly and conspicuously disclose your relationships.”

You can read all 21 warning letters here [opens as a PDF].

Some influencers have taken the warning letters seriously. Amber Rose, American model, actress and Instagram influencer with 1.6m followers has recently taken to complying with FTC regulations and conspicuously displays any material connection she has with brands by using the #ad hashtag above the fold.

Other social media influencers are still not following the FTC guidelines. Given the heightened scrutiny the regulator is applying to influencer marketing it is increasingly hard for serial flouters to claim ignorance of the rules.

No financial penalty for first-time offenders

A possible reason for influencers ignoring the regulator is that the FTC lacks teeth to severely punish first-time offenders.

In a press release announcing the settlement by CSGO Lotto Owners - FTC’s First-Ever Complaint Against Individual Social Media Influencers - the government body writes:

"The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $40,654."

In plain speak this means that whilst breaking this federal law may not be great for your reputation. It won’t put a dent in your wallet. There is no financial penalty associated with a first offense. However, each subsequent violation carries the potential of a $40k+ civil penalty.

Top-level disclosure guidelines

Here are four top-level disclosure guidelines influencers, brands and marketers should follow to satisfy disclosure guidelines:

1. Clearly disclose when you have a financial or family relationship with a brand
2. Don’t assume that using a platform’s disclosure tool is sufficient
3. Avoid ambiguous disclosures like #thanks, #collab, #sp, #spon, or #ambassador.
4. Don’t rely on a disclosure placed after a CLICK MORE link or in another easy-to-miss location.