New Federal Trade Commission (FTC) guidelines are causing business to shift in the way they run advertisements via social media.
Among many of its functions, FTC regulates advertising and marketing in the United States. They’ve long placed restrictions on how things can be advertised on television and radio, but for some time, there was a lot of uncertainty regarding the advertising guidelines for social media.
Recently, the FTC made a pertinent announcement regarding social media advertising and what is and isn’t allowed. These rules can greatly impact how businesses advertise their products and services, so understanding these new guidelines is critical.
What are the New FTC Guidelines?
The FTC has announced that social media advertising is subject to the same rules and standards that traditional radio and television advertising is subject to. They have stated that their focus remains on upholding the “integrity of communications,” with regulations that promote accurate, transparent, and non-deceptive advertisements.
While the guidelines lack specifics about the claims business can and cannot make, FTC does have extensive regulations detailing choice of words, unsubstantiated claims, and so on. Overall, they advise businesses to tell the truth and avoid exaggerated claims. They express the need to be transparent, providing disclosures and disclaimers whenever a statement in an advertisement needs to be clarified or qualified.
How Should Businesses Adapt to the Guidelines?
For many businesses, the new FTC guidelines will not require them to make any big changes to how they advertise their products and services. However, your business should take the time to review these guidelines and determine whether they impact how your business is running its advertisements on social media and elsewhere.
The biggest changes you need to start making include the following.
Identify Ads and Marketing
In light of the FTC guidelines, we suggest that businesses strive to use appropriate, clear, and conspicuous disclosures whenever a social media post is serving as an advertisement. Using disclosures, like #ad, is often considered acceptable. However, when in doubt, consult with an advisor or attorney.
If you sponsor influencers or other pages, you also need to ensure that they are properly disclosing when a post is sponsored. Encouraging them to use #ad and #sponsored while tagging your brand is important.
Disclose Material Connections
The FTC guidelines can make things a bit confusing for brands across the board. Those who are consistently active on social media are trying to identify what posts are traditional ads or pure marketing to customers. If your company has a wonderful culture and employees are always posting about your products, services, or environment, would this require disclosing that as a form of marketing?
The lines are blurred in many instances, but it’s highly recommended to play it safe. If someone does have material connections to your company, as an employee does, that should be disclosed. Similar disclosures are required for influencers to who your company reached out to, gave discounts, or otherwise compensated.
Establish a Social Media Policy
If your business does any sort of posting on social media, whether sponsorships, advertising, or otherwise, you have to establish a consistent social media policy. This formal policy will guide your employees on what they can and cannot post, and remind them of these best practices. If you fail to have such a policy in place it could land your business in hot water.
Avoid Misleading Customer Reviews
Consumers should have access to reviews for a company and trust that what they are reading is truthful, enabling them to make an informed final decision. The new FTC guidelines now require businesses to cure any reviews that are found to be inaccurate, untruthful, and/or deceptive.
Additionally, realize that your business is not allowed to censor those less-than-favorable reviews. The Consumer Review Fairness Act has this outlined in detail. If you’re reaching out to customers and collecting their testimonials, yet only posting the five-star critiques, your business may be going against these guidelines.
Check and Disclose Employee Reviews
Any reviews left by your employees must meet the same guidelines, so any employees who provide a review must give truthful testimonials. Requiring employees to provide a positive review is not permitted and should be avoided. As always, if you’re getting negative feedback from employees – just as with customers – the best strategy is to work hard at improving your business to strengthen these reviews.
The FTC guidelines state that businesses cannot pay or solicit their employees to leave misleading, deceptive, fake, or untruthful reviews. If you’ve done so in the past, you should cure those issues right away. In any reviews those employees do leave, they must disclose within the review that they are current or past employees.
Disclosures for User-Generated Content
With all of the disclosure requirements listed above, you may begin to wonder and worry if things like user-generated content as part of a social media campaign will require disclosures. The FTC reassures businesses that any content users post, like reviews, that are organic and not incentivized, do not require disclosures. As always, however, you should contact your attorney if you have questions on exactly what is permissible.
Our Advice for Navigating the New Guidelines
As you read through the latest FTC guidelines, you may be overwhelmed by the sheer breadth of these new regulations. LOLA POS doesn’t want to see your business penalized with a hefty fine which is why we’re offering advice to help you adhere to the rules.
First, keep in mind that affiliate programs are a great way to drive business, but you could be responsible for what they do and say to sell your products. If you have affiliate programs, be sure to monitor the claims, content, and ads they’re using to generate leads and make sales. Advise them of these guidelines and ensure all of their claims are accurate.
Secondly, focus on investing your resources into building up a solid reputation for your business. Incentivizing customers to leave a review may seem like a simple way to rack up testimonials, but the FTC prefers to see organic reviews — and so do other customers. You won’t have to worry about disclosures if your business gets its reviews naturally, so focus on a business model that encourages brand loyalty.As the Merchant Account That Works for You®, we’re proud to bring you the latest advice and guidance about building your brand. Are you interested in more industry news and advice? Connect with us today!