Are You Paying Your Social Media Influencers? Let Your Followers Know or Face the Consequences

We at SONA LEGAL love social media, and not just because it’s a great way to keep in touch with family and friends, find out about awesome new destinations, or learn about cool new events in town. We love it because it helps our clients grow and fulfill their potential. It can make the difference between going from a mom and pop to global mogul.

We all know the model – hire some great influencers, they pitch your product or service, and voila, your followers just increased exponentially and the revenue is piling up. But with potential comes risk.

In 2018, a company called Alo Yoga decided to hire influencers to help pitch their yoga products. They engaged their brand ambassadors who merrily endorsed the products on their social media accounts. The only problems were that the company either didn’t disclose that these influencers were getting paid or they buried the hashtag “#ad” waaaaaay down in the post. And we know – most of you are doing the exact same thing. No judgment here. Just know that while we completely understand why you do it, the consequences can be not so great. Like fines and lawsuits not so great.

This is a big no-no for the Federal Trade Commission aka the “FTC”, the head honcho of advertising rules in the USA. They are the master of all that is advertising in the USA and they have conveniently released a set of guidelines for people just like you. Learn them, know them, and thou shalt stay out of trouble.

Here’s how it works: the FTC works with a group called the “Electronic Retailing Self-Regulation Program (ERSP).” The ERSP is a “self-regulating” advertising industry group. What this means is they are a group of advertising industry people who help people like you comply with FTC Guidelines. Think of it like “FTC For Dummies.”

Well, the ERSP got in touch with our yogi friends and tried to be nice and say “Hey look, you can’t really do this, it’s deceptive. You need to do X, Y, Z instead.” Apparently, while Alo Yoga did concede some points, they weren’t willing to commit to modifying their posts as recommended by ERSP or engage further with the group.

So ERSP said okay, if that’s the case, we are going to get the FTC involved, which is basically the equivalent of Danny DeVito getting his brother Arnold  Schwarzenegger involved when he was getting punked in the 90s movie “Twins.” (I like 90s movies, get over it.)

In a shocking plot twist, once Arnie aka the FTC was in the picture, our yogis had a change of heart and decided to work with ERSP to implement all of their recommendations. Blog posts were altered, disclosures were made, and all was well in the world of yoga and social media. Read more at https://asrcreviews.org/alo-yoga-agrees-to-modify-instagram-posts-to-disclose-material-connection-between-company-and-influencers-after-ersp-review-of-social-media-advertising/.

So what’s the lesson here? You might not be able to control what your influencers post, but you can control their obligation to make disclosures.

CREATE AND IMPLEMENT A SOCIAL MEDIA POLICY ACROSS THE BOARD. SIGN WRITTEN AGREEMENTS WITH YOUR INFLUENCERS WITH PENALTIES FOR THEM IF THEY DON’T FOLLOW YOUR GUIDELINES.  See, that was easy. (Influencer Agreements are great for many reasons. More on that in the next few months.)

Stay tuned for part 2 next week, where we tell you what should actually be in Social Media Policy, with some tips and examples for specific social media outlets!

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