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A Guide to FTC Regulation | How it Affects Brands, Influencers and Agencies

The Federal Trade Commission is an independent US governing body over 100 years old. They were set up with the intent to protect consumers from "unfair or deceptive acts or practices in commerce”. Basically, to prevent anything being sold in bad faith.

As the social media influencer becomes a prominent figure in marketing and advertising, what was once seen as an additional channel for brands to reach new audiences, is now viewed as a fundamental method to engage with mainstream consumer groups.

When branded content is culturally relevant, creative and, crucially, authentic it is the gateway to impactful advertising in a mobile-first age.

The Data

Whalar’s recent neurological study revealed influencer marketing to be 277% more emotive than traditional media. Alongside our study, 72% of brands are set to increase their influencer budget in 2020 (Talkwalker Report).

The above data is particularly relevant if applied to the shift in marketing media habits, specifically how social media trends are beginning to set the pace for the industry. Fuelled in many respects by Gen Zs; 82% ignore traditional ads (a.list), nearly half check their social channels every hour (Social Media Week), and together they will make up 40% of all US consumers by the end of 2020 (Native Advertising Institute).

Consumers want to be spoken to directly and intimately. Right now, influencer marketing is encapsulating shifting media habits and it’s here to stay.

Snapshot of our Neuroscience Study. For the full report, please contact studio@whalar.com.

However, for all this brand interpretation, consumer-first perspectives and digital storytelling, regulations have been put in place to ensure general advertising standards are upheld. These regulations are there to monitor creators, agencies and brands who choose to advertise on social media.

Regulation | From Billboards to Screens

Governing bodies such as the FTC (US) and ASA (UK) essentially exist to protect consumers from being lied to or sold something blatantly harmful (like cigarettes or alcohol). For decades, these bodies were tasked with regulating traditional methods of advertising. In the form of, Print, Billboards, Radio, and TV.

For a long time, you had a small number of pipes in which to design a strategy, often around a singular “big idea”. These pipes were easy to regulate as they were finite and transparent; people knew they were being advertised to and could take that into account if they were being told how remarkable a certain product something was.

Then, in 1994 the first official internet advertising was launched by US giants AT&T, who paid to publish a banner advert on a precursor to today's tech site, Wired. Slowly, digital content began to work its way into the minds of marketers. Prompted by the initial banners, digital ad spending now holds the majority of total media ad spending worldwide, at 50.1% (e-marketer).

Initial Complications

Influencer marketing’s role in digital spend has been crucial in the shift to consumers spending upwards of 70% of their media time via mobile devices (impact).  

Influencer marketing is seen by many marketers as the antidote to irrelevant advertising, ad blockers and increasing disinterest in traditional media platforms. Instead of having a singular grandiose idea that is sort of relevant to an entire demographic, influencers offer a constant stream of interpretations of a brand, drawing direct relevance to their specific audiences.

However, with influencer marketing, you’re essentially taking a finite amount of pipes, and replacing them with infinite, uncontrollable channels. In these channels, anyone with a following can essentially use their influence to advertise via their personal ‘pipe’, which have become available for marketers.

The issue being, however small and niche the creator is, consumers still need to be fully aware that they are being advertised too.

A smaller,  independent creator could fly under the radar of these governing bodies - particularly when brands and consumers were still figuring out the true potential of influencers. However, after several high-profile crackdowns(Fyre, Flat Tummy Tea, etc) of the industry rather than smaller, independent creators. Governing bodies are issuing harsh penalties to all influencers and brands who fail to disclose their advertising. In other words, for this new era of dynamic advertising to continue to flourish, we need to self-regulate before we get actually-regulated.

Check Yourself, Protect Yourself

Like all inspiring leaders, the FTC has broken down the key disclosure guidelines into four wacky alliteration-friendly categories.

  • Prominence: Disclosures should be easily visible to consumers and written in a reasonably sized font that stands out from a site's or image’s background.

  • Presentation: Disclosures must be easily understood by consumers -- vague or subtle language is unacceptable.

  • Placement: Disclosures should be posted in places where consumers would typically read or view content. They should not be buried at the bottom of a page or a lengthy post that requires them to click to learn more.

  • Proximity: Disclosures should be listed alongside the products or services being promoted.

What does this mean?

#Ad #Ad #Ad - Front and center. Tag the brand, declare the ad. Leave no room for interpretation.

Why #Ad is a Good Thing

For a creator with influence, landing a brand collaboration is an acknowledgement of the professional quality of their work. In more traditional terms, it is a client investing in a portfolio of work, so branded content should embody an influencers best work.  Both the creator and agency should be working to matchmake deals that fall in line with the creator's craft and, naturally, that of their audiences.

When content of this calibre is produced, we can see influence coming into its own. For brands, they can look at certain influencers as independent content studios. The pieces above need not be contained to Instagram and are highly repurposable assets for each brand. There are collaborative by nature and tell a story. Alongside #Ad, whether this is done visually or within text, these questions should be addressed:

How did the brand help me?
How can it help my audience?
Why I chose this brand and what it means to me?

Users follow creators for their individuality, and no well-researched collaboration should pacify this. An agency is there to bring relevant brands to creators who can use the collaboration to bring out their best work.

The #Ad validates the scene. Poor influencer marketing takes place when we feel like the “#Ad” is something to hide. This is a red flag. As a creator, you need to ask yourself is this a brand I can be proud of working with? For brands, they need to look beyond numbers and looks, instead focussing on how that creator can bring a unique cultural relevance to their digital identity.

Looking at the creativity and not numbers will only be more prevalent if likes become a thing of the past. Some agencies, brands and creators use likes as their sole currency of this industry. They are the ones who either won’t stick around, or will consistently limit the fundamental creative potential of this growing space.

Be picky. Use your collaboration to stand out, not blend into someone else’s feed.

This is the time for creators and marketers alike to bring creative innovation to brands and signal in this new era of personable advertising. Pitch bold, be brave and be proud of your #Ads.

Banner content from @lecorgi.