As the power of Instagram and other social media platforms as marketing tools rises, so does the dollar figure of contracts between brands and the social media influencers (celebrities, athletes, reality stars, etc.) they use to endorse their products – some contracts are reported to be in the seven-figures. Couple this with the influencers’ ability to reach millions of consumers and the Federal Trade Commission (FTC) is taking notice. The FTC continues to keep a close eye on advertising activities by social media influencers as well as the brands themselves but historically, the FTC’s enforcement has been limited only to brands. However, in a much anticipated move, the FTC recently sent 90 letters to various influencers (including 45 celebrities) and brands “educating” them on its advertising disclosure requirements.
The FTC monitors advertising activities pursuant to the Federal Trade Commission Act, which charges the FTC with, among other things, preventing “unfair or deceptive acts or practices,” including advertising that is false or misleading in any material way. The FTC published the Guides Concerning the Use of Endorsements and Testimonials in Advertising (also known as the Endorsement Guides) to provide guidance regarding how the FTC evaluates certain endorsements and testimonials in advertising.