Influencers and Creators: Business, Culture and Practice

Jon is a contributor in the new textbook Influencers and Creators: Business, Culture and Practice by Robert Kozinets, Ulrike Gretzel, and Rossella Gambetti. This new textbook examines the influencer phenomenon from a variety of perspectives and explains why influencers are becoming indispensable to governments, platforms, and brands. The textbook delves into the profound shifts in culture, persuasion, media structure, and ethical concerns, catalyzed by the burgeoning realm of influencers and content creators.

Jon's contribution, "#FollowingTheLaw," introduces the relationship between law and the new age of digital influence in Chapter 8 (titled "Ethics and Regulation."). Reminiscent of an old western town in dire need of a sheriff, Pfeiffer lays bare the somewhat lawless frontier of social media, where the Federal Trade Commission's (FTC) guidelines frequently go unenforced. His contribution is reproduced below.

#FollowingTheLaw

‍Regulating influencers on social media is like enforcing the law in an old western town without a sheriff. There are lots of rules, but rarely is anyone around to enforce them. Reports estimate that over 90% of FTC (Federal Trade Commission) guidelines are violated by social media endorsements.

What are the rules?

Let’s start with the 50,000-foot view. Influencers are primarily regulated under Section 5(a) of the FTC Act which prohibits “unfair or deceptive acts or practices in or affecting commerce.” The FTC has stated that the relationship between an influencer and a brand must be clear and conspicuous – but what does that mean? To answer that question, we have to get into the weeds on disclosures.

The FTC has issued guides and regulations regarding proper online disclosures. These disclosures are required when an influencer has a “material connection” with the brand. A material connection to the brand includes a personal, family or employment relationship, or a financial relationship such as a brand paying the influencer or giving free or discounted products or services. This includes everything from free meals or t-shirts to six-figure brand deals

Disclosures made with hashtags which must be unambiguous. Saying "#thanks" is polite, but doesn't tell people anything about the brand relationship. Influencers must use #sponsored, #ad or #paid even when talking about their own products.

Hashtags should not be buried or hard to find. When a post includes multiple hashtags, readers are likely to skip over them. If an influencer uses multiple hashtags, lead with the important disclosures. As the FTC has said, avoid "#HardtoRead #BuriedDisclosures #inStringofHashtags #SkippedByReaders." Also, disclosures should be placed within the endorsement itself as well as in the caption where viewers can see the disclosure without clicking the “more” button.

Finally, an Influencer should not remove any disclosures with respect to any content at any time, whether during or after the term of the influencer agreement.

The FTC rules are clear and influencers would be wise to follow them. More robust FTC enforcement is coming.