How Social Marketers Can Stay On The FTC’s Good Side

Social media disclosures (and more) are on tap as our SocialPro conference begins with a keynote conversation between Marketing Land and the FTC.

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Good morning from Las Vegas! Day one of Marketing Land’s SocialPro conference is about to begin, and we’re starting with a real treat: a keynote conversation with the FTC about everything marketers need to know about social media disclosure rules and more.

Our special guest is Mary Engle, the FTC’s Associate Director for Advertising Practices, and she’ll be chatting soon with our founding editor, Danny Sullivan. We’re due to get started at 9:00 am PT / 12:00 pm ET, so come back and follow along as I live blog today’s keynote conversation.

Okay, we’re getting started now as Danny welcomes our audience to our first SocialPro conference. I’ll be using “DS” to refer to Danny’s comments and questions, and “ME” to refer to Mary Engle.

DS: Tell us what the FTC is and why it matters to social media marketers?

ME: The Federal Trade Commission is charged in part with monitoring advertising and making sure that advertisements are truthful and not misleading. You may not know us, but you know what we do — the Do Not Call list, for example.

DS: First big push from the FTC was way back in 2000, guidance on internet advertising that was because you had bloggers who may have thought ad rules didn’t apply to them. In 2013, you published the .com Disclosures guide, and you just published a more recent guide, too. How often do you think about updating these things?

ME: We’re always looking to update these things. In the past, most advertisers were established — you had to have money to buy print or TV ads. But the internet changed that, it lowered the barriers. And social media made it even easier. We have to keep abreast of how marketers are reaching out to consumers.

DS: Do you dread when a new social media tool comes out, like Snapchat, something new to track? (laughs)

ME: (laughs) Yes, thank goodness for my kids!

DS: What are the big changes you’ve seen lately?

ME: I think it’s social and local. Social media and the increase in smartphones and mobile usage. It’s harder for us to monitor. It’s not like we used to watch every TV commercial that was made, but when there were fewer communication methods, it was easier to watch.

DS: asks about how marketers can begin understanding FTC requirements

ME: We issue guidelines for testimonials and endorsements in their advertising — how to do that without being deceptive. We include these principles along with a lot of examples about what’s deceptive and what’s not. When we look at ads and decide if their deceptive or not, we look at the ad as a whole and whether consumers are being deceived. A lot of times the solution is that additional information is needed in the form of disclosure. Especially when there are relationships between advertisers and endorsers that the consumer may not expect.

Material connections between the endorser and advertiser should be disclosed. If a celebrity is saying something on Twitter or Instagram about a makeup line, you don’t know if she’s being paid — she might just like it, or she might be being paid. We say that if there’s a business relationship, it should be disclosed.

DS: There’s an exception if you’re a Kardashian, right? (laughs)

ME: (laughs) That’s actually a good question. Kim Kardashian used to say that she was never being paid for things she posted, but then she did start getting paid.

DS: asks about social media contests where you have to use a certain hashtag to win — do consumers need to disclose that? And what about the contest sponsor?

ME: It depends. Whether it’s a material connection will depend — if it’s a chance to win $5, that’s probably not material. The idea is, is the connection between whoever is endorsing the product and the advertiser material? A contest where you’re saying something about a product where the endorsement isn’t organic, that would need to be disclosed. Generally, it’s the marketer’s responsibility to make sure their ads comply with the laws. (This was a complicated answer and I didn’t keep up with it as well as I wish. Sorry!)

DS: Let’s say Disney announces a contest where you can see The Force Awakens a day early. I’m going to enter because I want to see the movie. They say I have to tweet with a certain hashtag. Do I need to add “ad” at the end? Or since there’s a reasonable chance I’m not going to win, do I not need to worry about that.

ME: Well, our policy is that we don’t comment on ads and campaigns that haven’t happened, so…

DS: Let’s just pretend there’s a movie coming out like that! (laughs)

ME: (laughs) Hypothetically, if all you’re doing is trying to see a movie a day early, that probably doesn’t matter. It’s pretty obvious that the movie is trying to drum up some publicity.

DS: What about when brands use bloggers and influencers — like the case on Instagram where many were being paid to talk about a certain dress? Let’s say there’s a case where there’s a network of people being paid to talk about a product.

ME: There was a case I can talk about. I think it was a Nordstrom or Nordstrom Rack in Boise and they invited all these influencers to come to a grand opening. The influencers were given goodie bags and were also asked to tweet/Instagram about the store opening, but they weren’t instructed to explain the overall situation about being compensated, so we thought that was problematic.

DS: In a situation like that, where someone is sending out multiple tweets, does each one need to say “ad”?

ME: Yes, our guideline is that you have to disclose that because you can’t assume that people saw the first tweet with your disclosure.

We also don’t give specific advice on what to say in the disclosure. There was a movement for #spon as a hashtag, but we didn’t think that was obvious to consumers.

DS: asks about the need to disclose gifts that are small and not of great value

ME: answers by saying that a one-time gift of little value probably doesn’t need to be disclosed, but if there’s an ongoing relationship that would be different

DS: What about the growth of native advertising?

ME: It all goes back to, can consumers tell that the message they’re seeing is advertising? Native advertising is an ad that looks and feels like the regular content they’re seeing. The intention is that the advertiser knows consumers don’t want to look at normal ads, so you’re creating something that looks like the content they want, but is an ad. So we say that has to be disclosed. There’s probably a million ways to do that, but the consumers need to know that particular article is an ad.

This is not native advertising, exactly, but a recent case was involving a company called Machinima (sp?). They were doing something with the new XBox. They hired a lot of gamers to play the game and post videos of themselves online playing the game. Some of these high profile gamers have millions of followers, so Machinima paid like tens of million dollars to hire them to do this but didn’t disclose that the gamers were being paid. Our guidance was that disclosure just at the beginning or just at the end of the video wasn’t good enough, and not in the YouTube description wasn’t good enough because you don’t know if anyone’s going to see any of those. So we issued what we call a cease-and-desist order.

DS: What about search engine disclosures on ads? A couple years ago you told them the ads needed to be separated better from organic results, but it seems like they’re moving in the other direction.

ME: Search is very dynamic, it’s changing constantly. Our first search engine guidance was in 2002 and we updated it in 2013, but the message was the same. Paid ads should be distinguishable from organic search results. We offered some suggestions about using shading, the word “ad” and things like that. Since then, there’ve been changes. But I can say that it’s on our radar screen. It’s an issue we’re paying attention to, but I can’t say much more on that today.

DS: Are there other things marketers should be paying attention to, but aren’t today?

ME: We’re trying to make sure that marketers are aware of the rules of the road. Sometimes we see that bloggers know the rules better than brands. We’ve seen contracts that include wording like “must comply with FTC disclosure rules,” but they don’t go any further than that. And the disclosure needs to be in the same message as the endorsement itself.

DS: What about scale — big company vs. small company?

ME: A lot of times we get tips, but the case is very small scale. It might be something where very few bloggers or influencers were used. There are cases where we have to decide that it’s not worth a full investigation. Sometimes it’s the scale of the disclosure — we find it problematic when, for example, the disclosure on a weight loss ad — these results aren’t typical — are in tiny type at the bottom. It’s as if they know they have to do the disclosure, but they don’t want it to be seen.

DS: It seems like the rules are harder for social media than TV. Like with product placement in TV shows. On TV, the disclosure might fly by in the credits and be on screen for a second. But in a tweet you have to spend a good portion of your 140 characters to disclose.

ME: We actually had someone request that we require shows to flash “advertisement” on the screen every time there’s product placement. The FTC has said there doesn’t necessarily need to be disclosure — it’s not material for the consumers to know that a brand paid for their product to be used in the show, versus the show’s writers just thinking it looks better to have the character using a real product.

DS: What happens when the rules are broken?

ME: (Ugh. Missed most of this answer.) Sometimes we seek to settle the matter with a closing letter that details what we’ve found. Most of what we do are cease-and-desist letters. Last year, there was a case against Deutsch LA where they had their employees tweet about the Playstation Vita — Sony was a client — with the hashtag #gamechanger, but there was no disclosure, so we had a problem with that and issued a final order.

DS: Can marketers get help from the FTC before they start a campaign, to make sure it’s within the guidelines?

ME: People can send emails to us at [email protected]. We can’t give specific legal advice, but sometimes we can give guidance. We encourage marketers to put themselves in their audience’s shoes. The audience may not be aware of advertising as you are. They may interpret things differently. And also understand that we don’t have to prove that your whole audience might be misled. You may think your audience knows what’s an ad, but not all of them will. If we think there’s a significant percentage of an audience being misled, we’d have a problem with that.

DS: What if a brand feels their competition is breaking the rules?

ME: We have a complaint line, 1-877-FTC-HELP, they can use. We actually get a lot of leads from competitors.

And now we move on to audience questions. First question was outside of FTC’s scope.

Q2: If I’m sharing my employer’s content, do I need to disclose that?

ME: Generally speaking, we say employees should disclose when they’re endorsing their companies’ products. But the question is whether this is an endorsement. Is it even commercial speech that we have jurisdiction over? Is it even an advertising message? Generally, what it comes down to, is this promotional in nature that a reader would feel misled if they learned that you were an employee — would it be material to the consumer to know that you work for the company?

Q3: question following up on contests

ME: The rules on contests and sweepstakes — state laws govern those.

Q4: I work for an agency and we’re hosting a Twitter chat for a client, even if it’s not a promotional chat — would the employees need to disclose that?

ME: If it’s not promoting the client, then no. But if it is, then yes. It depends what is being said.

Q5: What about if the sponsor is a non-profit — if the non-profit tweets thanks to a event sponsor, does the non-profit need to disclose that?

ME: Generally speaking, the FTC doesn’t have jurisdiction over non-profits. But sometimes we do. Some groups are technically non-profits, but we have jurisdiction because the groups are organized for the profit of their members. In this case, it’s tough to comment because we always review things in an overall, larger context. But I don’t know if what you’re describing is actually an endorsement. I like that your lawyers are being cautious in this case. (laughs)

Q6: How does the FTC feel about affiliate marketers, where the affiliate might say things the company doesn’t approve?

ME: Our guidelines address this — what we say is that companies using affiliates and influencers need to have very clear policies for what can be said, and also need to have reasonable monitoring in place. Obviously you can’t monitor every tweet, but if you’re making a good faith attempt, that’s probably going to satisfy us. Not having a monitoring program in place doesn’t mean you’re violating the law, but having one helps make sure you’re not.

Q7: about where to place links for disclosure

ME: Just having a link in the person’s profile isn’t enough, because the consumer may not see it. Disclosure about a relationship has to be in the same communication as the endorsement.

Q8: what about contributed content and guest articles, is the publisher responsible if the article includes an endorsement that’s not disclosed? (Danny asked a clarifying question before Mary began to answer, too.)

ME: First thing we’d look at is whether it’s commercial speech or not. Then, there’s also the Communications Decency Act that generally provides a safe harbor for publishers about content posted by third parties. In that case, the question becomes what role did the publisher have — did they have a role in creating or shaping the content. If so, the publisher may not be protected.

Q9: Can you touch on soliciting reviews from customers?

ME: We have some guidance on that in our recent guidelines. If you’re asking them for a review before the product’s been used, that needs to be disclosed. If you’re telling the customer they’ll get paid for a review, that needs to be disclosed. Amerifreight case — cost of service was $50 higher if the customer didn’t post a review. We determined that was a violation because the customer received something of value, it wasn’t organic.

Q10: Do you guys work with ad standards department in Canada?

ME: We have jurisdiction in the US, and if the advertising is happening in the US, we have jurisdiction. But we do have good relationships with our counterparts in Canada and can work with them on cases.

And that’s it for our keynote — fascinating stuff! Thanks to all who are here at the show, and thanks to all who followed along with our live blog.

Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.

About the author

Matt McGee
Matt McGee joined Third Door Media as a writer/reporter/editor in September 2008. He served as Editor-In-Chief from January 2013 until his departure in July 2017. He can be found on Twitter at @MattMcGee.

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