In 2019, the Federal Trade Commission released a user-friendly and easy-to-understand digital booklet called Disclosures 101 for Social Media Influencers, designed to help streamers and influencers understand when and how to disclose their promotional relationships with companies. Now it appears the FTC is preparing to draw a harder line against “stealth advertising” and endorsement disclosure, as it voted to consider updating its guidelines against “false and manipulated reviews.”
The FTC has been fighting misleading online advertising for years. In 2015, for example, he settled a case against Machinima Inc. over its failure to disclose that it was paying its influencers for promotional videos; a year later, WBIE settled similar charges regarding a promotional campaign for Middle-earth: Shadow of Mordor. Persistent issues helped create the Disclosures 101 primer, but the approval guides behind it were last updated in 2009, a geologic time in the digital world. So the FTC has proposed changes to its guidelines that “reflect the extent to which advertisers have increasingly turned to the use of social media and product reviews to market their products.”
The proposed changes don’t just target influencers. The Recommended Revisions Notice also includes a warning to social media companies that their influencer tools may not be adequate to meet legal requirements, exposing them to potential liability; it also states that companies that use consumer reviews in their promotional materials “must not misrepresent or misrepresent” what people actually think of their products. Specific “micro-targeting” audiences will also come under greater scrutiny under the proposed new rules. An example cited in the update notice:
“A social media ad promoting a cholesterol-lowering product features a testimonial that says how much it lowered their serum cholesterol. The claimed reduction far exceeds what users of the product typically experience and a disclosure of typical results The marketer was able to identify, from online data collection, Spanish-speaking people with high cholesterol who do not understand English and micro-targeted them a version in Spanish of the advertisement, disclosing the typical results in English. be evaluated from the point of view of the targeted individuals.”
“Advertising directed at children” is also considered to be of “particular concern” because children can (and let’s be honest, will) react to advertising and influencers differently than adults, regardless of the disclosures made. “Practices that would not normally be questioned in adult-directed advertising may be questioned in such cases,” the FTC said.
“Online reviews and influencer endorsements are ubiquitous on the internet, and they present real, new challenges,” FTC Commissioner Rebecca Slaughter said at a press conference. public session of the committee May 19. “Unlike the celebrities of yesteryear, influencers are often seen as experts in their market, whether it’s fashion, healthcare products or cutting-edge consumer technology.
“Influencers constantly interact with their followers in their market or social niche. These are often relationships of trust and without clear guidelines and responsibilities. They are ripe for commercial exploitation and deception. The new guides make it clear that we have intent to investigate breaches of that trust, whether by brands manipulating reviews, influencers not disclosing material relationships with companies, or micro-targeting aimed at misleading specific groups of consumers.”
The updated guidelines will also put more emphasis on the role of brands in influencer promotions: there is a real concern about brands using “unsophisticated influencers” and then trying to pawn their liability in case of non-disclosure, Slaughter said. “Brands have a real responsibility to ensure their influencers disclose this relationship.”
The proposed changes target all types of influencers, but the focus on promotional content targeting children could be particularly troublesome for platforms like Twitch and YouTube. A 2019 Statista report (via back link) revealed that 41% of Twitch viewers were between the ages of 16 and 24, and nearly three-quarters were between the ages of 16 and 34. But younger viewers were not counted in the survey: 16 was the lowest age included. It makes it impossible to say definitively, but I’d bet there are plenty of under-16s watching streamers regularly. In fact, I can think of two of them right away – my nephews, who I’m pretty sure aren’t outliers in their particular demographic.
The FTC voted unanimously to send the proposed changes to the Federal Register, the US government office that contains agency rules, proposed rules and public notices. Another public event focusing on children’s ability to distinguish and understand advertising content, “and the necessity and effectiveness of disclosure to children”, is planned for October 19.