FTC Cracks Down on Misleading Influencer Marketing

Transparency is essential in marketing efforts – not only to keep the trust of your customers, but also to avoid getting into trouble with the government. Influencer marketing is based on partnering with content creators who appeal to your brand’s audience, and authenticity is key to a campaign’s success.

Last week, the Federal Trade Commission reached a final settlement with Machinima, an online gaming and media company, over charges that it used influencer reviews in deceptive advertising. Machinima paid influencers to create and post YouTube endorsements for Microsoft’s Xbox One and several video games. In a September 2015 complaint, the FTC alleged that because the influencers didn’t openly disclose that they were being paid, the YouTube videos appeared to be objective product reviews and not advertisements.

The FTC order settling the complaint prohibits Machinima from letting paid influencers represent themselves as objective consumers. It also requires that the company monitor its influencers to make sure they’re making the necessary disclosures.

The FTC has been showing signs that it will start to crack down more on these previously gray areas of social media and digital advertising. Last year, the agency updated the “What People Are Asking” section of its online Endorsement Guides, offering detailed guidelines on social media issues.

An FTC case with retailer Lord & Taylor set a similar precedent for social media disclosure. The company had partnered with 50 Instagram influencers to post photos of themselves wearing a particular dress over one weekend in March 2015. According to the FTC, Lord & Taylor didn’t require the influencers to disclose that they were being compensated for the photos – therefore misleading consumers.

These rulings are important for marketers because they set clear expectations for future influencer campaigns: when in doubt, be up front.

Brands that hire influencers for campaigns must disclose the details of this relationship. If influencers are creating content for payment, this must not be misrepresented as an unbiased, independent endorsement. Transparency is the final word –  it keeps your customers educated and your brand’s reputation intact.

Learn more about MtoM’s approach to influencer marketing