Brand Advertising Through Social Media

A business should pay attention to who is posting about their brands, especially if there is some connection between the brand and the poster. The FTC may make claims against a business for someone else’s social media post just because they did not put certain hashtags or information in the description of a post.

Federal Trade Commission

In recent cases, the Federal Trade Commission (FTC) has made claims against both a person making a post on social media and a business for deceptive marketing when the person makes an endorsement for a business’ brand. The FTC has authority through the FTC Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce.” More specifically in social media, the FTC targets the person making an endorsement and the business from deceptive ads for not disclosing “material connections” between two.

What is an Endorsements?

An endorsement is an “opinion, finding, belief, or experience” of the endorser.

The most obvious way to make an endorsement is when a person makes a post through social media or a blog about a product. A classic example is a blogger writes a full article talking about their experience with a product or a social media influencer making a post about a product with a description about how the influencer likes the product.

Some non-obvious way that FTC has stated are considered endorsements can be a person posting a picture or video of a product on social media, even if there are no words associated with the post. Similarly, just tagging a brand in a post could be considered an endorsement as well.

Disclosures of “Material Connections”

An endorser must disclose any material connections between the endorser and the a business. A “material connection” is a connection between the endorser and the business that “might affect the weight or credibility that consumers give the endorsement.” A material connection may be a personal, family, or employment relationship, or a financial relationship.

One of the more obvious examples of a material connection is when a business pays a social media influencer to make a post about the business’ product. There is a financial connection between the influencer and the business. This relationship may affect how the consumer perceives the endorsement because the influencer was being made to make the endorsement in a way favorable to the business. In this case, the influencer should disclose such “material connection.”

Another example can be when an employee of a business makes a post on social media about the businesses product. There is an employment relationship between the employee and the business. The relationship can be considered a material relationship because an employee would make an endorsement more favorable to the business, affecting the way a consumer may perceive the endorsement. In this case, the employee should disclose such “material connection.”

Who is liable?

Not only is the endorser liable, everyone involved in creating the ad may be liable. The FTC may make claims against the influencer, the brand, and any other party that assist in creating the ads.

Not Sure If You Need To Disclose?

A good question to ask yourself if you are not sure if a disclosure is needed is: “Would the viewers of a post evaluate the post differently knowing that the person making the post was motivated in part by the material connection?”