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2017 Trends in Marketing Communications Law

Influencer Campaigns >> Influencer Campaigns See Increased Scrutiny

April 11, 2017

Marketers and their agencies are seeing increased regulatory scrutiny of their influencer campaigns as the popularity of influencers continues to grow and influencer networks become a greater marketing force.

The Federal Trade Commission (FTC) has focused its enforcement efforts on influencer campaigns in violation of the FTC's Endorsement & Testimonial Guides (the Endorsement Guides). For example, in March 2016, the FTC settled with Lord & Taylor regarding claims that the retailer paid fashion influencers to post photos of themselves wearing a dress from one of its collections on Instagram, but did not require any of the influencers to disclose that they had been compensated in exchange for their posts. Then, in July, the FTC settled with Warner Bros. Home Entertainment over claims that it failed to require its influencers to adequately and conspicuously disclose that they had been paid to promote the video game "Middle Earth: Shadow of Mordor" in their YouTube videos, highlighting the importance of the placement of disclosures over and above their mere inclusion.

The FTC generally has held marketers and their agencies primarily accountable for the actions of their influencers. Specifically, the FTC has stated that marketers "need to have reasonable programs in place to train and monitor members of their network" and are required to "instruct members of the network on their responsibilities for disclosing their connections" to the brand. As the prevalence and commercial clout of individual influencers grow, however, it would not be surprising to see the FTC bring actions against influencers directly, especially where celebrities or even pseudo-celebrities are involved. In the Warner Bros. case, for instance, although the FTC did not take action against any of the influencers involved, the FTC took the unusual step of specifically naming one particular influencer, PewDiePie, in its complaint, emphasizing that he had failed to comply with the Endorsement Guides.

The FTC is keeping a close eye on influencer activity across various online platforms, and undoubtedly will continue to focus on how influencer marketing campaigns are being presented to consumers in new social media formats and across evolving publisher platforms. As influencers are seeded by marketers across various different social media networks, including via online videos and branded entertainment content, the FTC will steer its focus toward the most popular social media platforms and potentially the most popular social media influencers to ensure that disclosures are being made in compliance with regulatory guidance and key principles.

Key Takeaways

  • As marketers and their agencies increasingly hire influencers, the FTC's scrutiny of their influencer campaigns is likely to increase.
  • The FTC's focus on the adequacy of disclosures, as well as monitoring, will continue.
  • Although many expect the Trump administration to scale back the power of the FTC, which may result in less federal oversight in this area, state regulators – particularly in New York and California – will likely fill the void, so marketers, agencies and influencers should remain alert and ensure they are complying with the Endorsement Guides.