Influencers & Sponsorship Laws

Every makeup product I currently own was bought as a result of an influencer post or recommendation. While I do not put my trust in influencers in every aspect of my life, there are definitely some areas where I find myself searching for answers on TikTok rather than Safari. These are usually trivial areas of my life, meaning I typically don’t take medical or financial advice from social media, but I will buy makeup or use recipes from influencers. I have a low level of trust toward influencers in the first place, however, I know that there are some consumers who rely on social media for medical and financial advice. They are susceptible to deception in high-involvement areas of their life. Influencers are unique, because my generation (Gen Z) and Gen Alpha both give more credibility and trust to influencers than celebrities. They seem more authentic, whereas celebrities always seem staged. The nature of the platform is also conducive to this, because watching influencers “in-action” provides a better sense of the product or service, whereas celebrities on platforms like TV, can’t give their honest, raw opinion about what they promote.

FTC disclosures mandate that influencers must disclose that their sponsored products are, in fact, sponsored. This comes in the form of hashtags that say #ad or #sponsored, but they can sometimes be hidden or misleading. The current regulations of FTC’s indicate that good disclosure of one’s relationship to the brand is key. There are a variety of laws in the endorsement guides provided by the FTC that clearly state how promotions and sponsorships should be done. However, with each influencer, the way they comply with these laws is their responsibility and not one single uniform way. As AI grows, I think that the FTC should work on prior restraint to prevent deception in the future on social media.

One grey-area in sponsorships is in native advertising. This allows influencers to have more creative freedom over their content and allow the product being shown to come off as more natural and less like a traditional sponsorship. Some influencers try to make their advertisements seem as though they are independent from the company they are promoting, when in reality, they are not. Under the FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising, an act or practice is deceptive if there is a material misrepresentation or omission of information that is likely to mislead the consumer acting reasonably in the circumstances. As native advertising and social media are both on the newer side, the exact requirements can be blurry. However, the FTC applies a “truth-in-advertising” principle as they always have in advertising to evaluate whether an ad is deceptive. Transparency is crucial, but transparency in and of itself can mean different things to different people.

I think that it is really important to ensure every sponsored ad is, in order to prevent deception, shown to the consumer as sponsored. FTC rules are actually beneficial to both the consumer and the advertiser/influencer because if the product or ad was deceptive, the consumer will likely look to or blame the influencer for poor influencing.

Another tricky situation is fake online reviews. Companies will often partake in this to make their product seem better or improve their online rankings. This is not ethical, but hard to prevent. For example, if a company does this and then the influencer promotes that product, the influencer might not be doing something wrong, but it is still deceptive.

The social media realm is still new and ever changing, but it is important for the FTC to try their best to keep up, even though it won’t always be perfect. While there is a chance that adding more regulations might hinder creativity, it is important to weigh the consequences of not increasing regulations. I believe it is worth a potential slight decrease in creativity if it means that consumers will not be deceived. There are so many ways to be creative while still disclosing the truth, because consumers deserve the truth. My original thought was that every ad on a certain platform could have the same hashtag or watermark to show it is a promotion, but I think that isn’t necessary. As long as brands and influencers comply with the law, the ads will not be deceptive and still allow for creativity. As long as the FTC keeps updating their rules and regulations with new cases or troubles that arise, they should not need to have one uniform, strict law for everyone. However, my opinion on this might change as social media grows and changes, if there is opportunity for people to become more deceptive, especially as AI starts to grow.