Last year, the FTC updated its Endorsement Guides to impose more stringent requirements on how influencers must disclose their relationships to the companies whose products they promote. Although the FTC later sent letters to two trade associations and 12 influencers warning that their disclosures failed to comply with the new requirements, the agency has been fairly quiet in this area since then. NAD has been more active.
For example, earlier this year, as part of its routine monitoring program, NAD discovered posts by two beauty influencers and determined that the posts did not comply with the FTC’s standards because the disclosures weren’t sufficiently conspicuous. This week, NAD announced a new decision – once again as part of its own monitoring program – in which it again determined that posts by other beauty influencers fell short of what the FTC requires.
In a TikTok video promoting the skincare brand Drunk Elephant, paid influencer Alix Earle included a text disclosure stating: “@Drunk Elephant you did it again – you guys know I’m obsessed with the bronzing drops... wait til you see these b goldi drops #drunkelephantpartner.” Although Earle did disclose she partnered with the company through the hashtag, NAD found that the disclosure wasn’t clear and conspicuous for three reasons:
- First, the disclosure was only visible if a viewer clicked on the “more” hyperlink in the description. FTC and NAD have both previously stated that consumers need to be able to see the disclosure without having to click on a link.
- Second, NAD found that because the words in the hashtag run together, “it is possible that consumers may not be able to understand it.” (Presumably, #DrunkElephantPartner would have been better and spacing out the words would have been best.)
- Third, NAD determined that although the endorsement was made visually, Earle’s disclosure appeared only in the text description accompanying the video. NAD determined the disclosure should have also appeared in the video itself.
NAD also reviewed a post by another influencer who wasn’t paid for her post, but that did receive free products from the company. Drunk Elephant advised NAD that it would provide instructions to any influencers to whom it sends free products encouraging them to clearly and conspicuously disclose that they received a free product. The company also told NAD it would include a clear and conspicuous disclosure if it ever re-posts endorsements from unpaid influencers that received free product.
The decision isn’t surprising, but it’s a good reminder of the FTC’s new disclosure requirements and that NAD is watching.
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