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Why Tougher FTC Regulations are a Good Thing for Social Media Marketing

There’s a lot of buzz about the crackdown by the FTC on sponsored posts in social media. If you're not aware yet, here’s the deal: The FTC is now carefully monitoring all social media and blog commerce, including live-streams and giveaways. Any post that involves endorsement or mention of a brand must demonstrate clear disclosure if any financial compensation, gifts or family involvement has occurred.

Quite a mouthful, true, but to put it simply - if you get paid to pitch a product, you have to let the people know.


In the spirit of honest and authentic influencer marketing, it seems like a logical step, but it’s got a lot of brands shaking in their celebrity-endorsed sneakers. After all, failure to disclose the proper nature of these relationships can result in hefty fines, and more importantly, the shame and distrust of running a shady campaign. Plus, any of the influencers involved would likely take quite the public opinion hit.

So, what’s the FTC’s problem? Why are they messing with our marketing, doling out fines, and generally being a pain in the rear?

Well, I don’t want to sound like a cliched parent here, but it’s actually for your own good.

The Age of Influence

Let’s remember what exactly makes influencer marketing as powerful and effective as it is - it’s still, at its core, an authentic and organic way to get trusted writers and experts to tell your brand’s story in their words to their thousands of loyal and attentive readers.

It’s tremendously versatile and surprisingly profitable - one study quotes the average ROI on influencer marketing at $6.50 for every $1 invested, and it can positively affect all aspects of the sales cycle. But, remember this - it has to be real. Today’s consumers are more savvy, observant, and, frankly, more cynical than any other time in history. In the age where every statement is fact-checked, and every connection is scrutinized online, transparent statements and full disclosures are worth a lot.

Consider this: in a recent survey, 71% of consumers indicated that they weren't aware there were any rules about employing influencers, and 61% thought influencers didn’t have to disclose any information at all about compensated relationships. Additionally, a whopping 88% expressed that they should be informed about these paid arrangements (even though they likely are, as per the existing regulations).

Evolving Practice

The changes mean that the paradigm is shifting - it means the days of blindly following big stars endorsing huge brands without questioning their motives or compatibility with the brand are coming to an end.

It also means that even those who are following the regulations as instructed maybe aren’t doing enough - the rules state you must put a prominent disclaimer in a visible spot on the post. Examples provided include the hashtags #ad, #sponsored, and #paid, or in blog posts, the phrase “This post is sponsored by…”.

However, with research showing that some two-thirds of people felt their perception of a brand improved when such disclosure was evident, maybe this bare-bones adherence to the rules isn’t enough.

Many smart influencers use this requirement as a way to deftly explain their true dedication to the brand - as in, “Yes, this is a sponsored post, but allow me to show you how  authentic this fit is.” Or, “Sure, I got paid, I have bills to pay, too. But this brand truly rocks, and I’ll tell you why.”

Putting these disclosures front and center, with humor and sincerity, can weave these regulations into a truly impactful post - and the data shows that this is what both readers and brands both are looking for.

Full Disclosure

While these regulations might be tricky to comprehend, and difficult to regulate, there’s always a way to turn an obligation into an opportunity.

Make sure you communicate this approach to your agency, network or in-house team, as they’re the ones with the experience and relationships necessary to convey the tone and messaging you’re looking for. Make it funny, make it profound, whatever fits your brand - but always seek to make it a positive.

Your consumers will appreciate the honesty - and don’t forget to thank the good folks at the FTC. Their tough approach may just inspire your best campaign ever.