7 Steps to Staying Out of Trouble with Your Paid Influencers – How to Create a Social Media Company Policy (and Actually Getting Your Influencers to Follow It).

In our last post, we discussed the potential pitfalls surrounding paid social media influencers and advertising laws. In this week’s follow up, we will discuss the best way to keep yourself out of trouble, by developing and drafting a watertight social media policy.

The FTC is responsible for regulating and setting standards for advertising in the USA. While the Endorsement Guides do focus explicitly on social media or online advertising, these guidelines are still applicable to both areas. In fact, the FTC also publishes “The FTC’s Endorsement Guides: What People are Asking,” which contains a detailed Q&A about the application of their rules to social media and online advertising. The first thing your executive and legal team should do is review the Endorsement Guides and the FAQ as a starting point. Above all, your social media endorsement policy should comply with the Guides and with the FAQ. Another helpful source in helping you prepare your social media policy is the FTC’s Enforcement Policy Statement on Deceptively Formatted Advertisements.

Additionally, you might be subject to advertising laws and regulations based on your audience. Different rules apply to consumers in California versus Texas.

  • Step Two: Who is Covered in the Social Media Endorsement Policy?

Your next step is to sit down with your legal team and define the type of connection between you and your influencer, talent, or other third party that would be covered by your policy and by the Endorsement Guidelines. The key question is “When does an influencer, blogger, or celebrity become a “Sponsored Endorser?” Common examples include:

  • Hiring an agency to engage influencers to blog, post, or otherwise engage on social media on your behalf;
  • Hiring a social media influencer directly or paying an influencer to post;
  • Providing a blogger with free prizes for giveaways or sweepstakes;
  • Providing an influencer with free samples to review;
  • Working with an affiliate marketing company;
  • Soliciting consumer reviews from influencers.

For more information on the FTC’s regulation of social media influencers, see Advertising and Promotions in Social Media: Key Issues Checklist: Follow the FTC Endorsement Guides and Practice Note, Advertising and Promotions in Social Media: Endorsements and Testimonials: FTC Investigations.

  • Step Three: Develop a Standard of Conduct for Social Media Endorsers.

Once you have defined who is covered by your policy, it is important to develop a set of rules for everyone to play by. Start by developing a broad set of company principles that the Endorsers have to comply with. For example, you can require that they do not make deceptive statements, disclose any confidential information, or make offensive comments or use obscenity. The exact content of your standard of conduct will vary based on your company philosophy as well as the audience you are trying to reach.

  • Step Four: Clearly Disclose your Connection to the Endorser.

This is where the yoga studio discussed in our prior post attracted attention from the FTC. When your endorsers post, they should communicate the connection between you and them clearly to consumers:

    • Can be easily found.
    • Can be easily understood.
    • Will obtain sufficient information to make a judgment about the value of the endorsement.

This of course is only the tip of the iceberg. More specific examples include:

    • On Instagram posts, disclose a material connection before the “More” button.
    • For a live stream, repeat the disclosure of the connection as needed or keep it posted throughout the live stream in order to ensure that consumers see it.
    • If we ask consumers to promote our products on social media in exchange for the chance to win a prize, the official rules should require entrants to disclose the fact that their own post is an entry into a contest or sweepstakes.

And so on and so forth. Your company should develop specific best practices for disclosure language, with specific examples and scenarios, and provide them as part of the policy.

  • Step Five: Defining what we must provide to Sponsored Endorsers.

First things first – you should always have a written contract with your hired social media endorsers. This contract should spell out the business terms of your agreement and require that the endorser comply with your social media policy. (We will go into more detail on this in a future post!) Additionally, you should develop talking points and provide them with links to FTC materials. And importantly, you should describe your social media monitoring activities in your policy. As our prior post shows, the expectation is that you monitor your hired influencers and the content they post; ignorance is not an excuse.

Additionally, your policy should discuss compliance with each social media platform on which content is generated. Facebook has different policies from YouTube. Copies or links to each social media outlet’s policies and procedures should be provided in your social media endorser policy, and you should provide guidance on how to comply with each outlet’s policies and procedures.

  • Step Six: When Your Influencer Fails to Comply with the Policy.

You should create a team responsible for enforcement and develop internal procedures to respond to situations where one of your influencers fails to comply with your endorsement policy:

    • If an agency or other third party manages or is otherwise involved with the Sponsored Endorser relationship, alert the third party to the issue.
    • Consult with the legal department to determine whether a correction is needed, and how best to make it.
    • If needed, require your hired influencer to make the correction or put it up on their post or page directly.
    • Determine if it is necessary to:
      • withhold payment from your influencer; or
      • terminate the endorsement
  • Step Seven: Train your Employees on the Policy.

This one goes without saying: both your own employees and all hired endorsers should know the policy and should be training on the policy resources permitting. 

Conclusion: Creating a social medial endorsement policy is crucial to keeping you out of trouble with the FTC or other legal authorities. Having a clear consistent policy also creates transparency in the expectations between your company and the influencers you’ve hired and allows for a more productive business relationship. Everyone knows where they stand. It’s a win-win. Draft yours now!

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