Non-Disclosure: The Biggest Influencer Marketing No-No

According to a survey by influencer marketing and media platform SheSpeaks, one out of four influencers have been asked not to disclose their commercial arrangements with a brand. And as the Federal Trade Commission’s rules and regulations around influencer marketing continue to evolve, and more and more companies make use of native advertising in their marketing strategies, brands need to start pulling up their socks.

What does it take for the FTC to sit up and take notice of your influencer marketing efforts? We know, that’s a question you never want to ask yourself, but a few high profile brands have gotten their knuckles rapped lately by the FTC for one of the biggest no-nos in native advertising: Non-disclosure.

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Lord & Taylor is the oldest luxury department store in the U.S. They also became the poster child for what not to do when crafting an influencer marketing campaign. While scrupulous in checking and double checking the content and social media posts their fashion influencers crafted for their “Paisley Dress” campaign, the Lord &Taylor team were less than careful when it came to disclosure. The fifty fashionistas who were paid to wear the dress and share an Instagram photograph of it with their followers were not asked to include disclosure statements, nor did Lord & Taylor’s team add them to the content they edited.

The campaign was a huge success, reaching 11.4 million individual Instagram users, and driving 328,000 likes, comments, reposts, etc. Incredible ROI. And guess what? The FTC noticed. In fact, the FTC’s enforcement action against Lord & Taylor was its first since announcing new influencer marketing guidelines in December, 2015.

The Fallout

While Lord & Taylor managed to sneak through without being hit with a nasty fine, they do have to now follow strict rules and prepare to be 100% transparent with the FTC when it comes to their future marketing efforts. Quoted in recently, Linda Goldstein, chair of the advertising, marketing, and media division at New York law firm Manatt Phelps & Phillips, had this to say about the ruling: “This action sends a very clear message to the marketing industry that the FTC is watching native ads and will pursue enforcement actions where necessary disclosures are not made,” Goldstein said. “I would not minimize the impact of the order on Lord & Taylor or any other business because it does operate as something of a noose around the neck of the business…They will have to be uber compliant in the future in ensuring that their campaigns comply with the provisions.”

Thankfully, the survey results mentioned at the beginning of this article weren’t all bad, and it seems influencers themselves are making a concerted effort to be FTC compliant when it comes to disclosure. Ninety-five percent of the influencers polled said they made sure their audience knew the difference between an ad and an opinion, and another 91 percent disclosed upfront when they were being paid by a brand. As SheSpeaks founder and CEO Aliza Freud said, “Any decent influencers are highly aware that they have to disclose and do it properly.” We couldn’t agree more with that statement, but as more and more companies hire more and more brand advocates to work with them on influencer marketing campaign, mistakes can happen. If you’re working with influencers, make sure you have clear, concise guidelines that outline everything you will expect from them during the campaign—and make full disclosure number one. And don’t just craft a strategy, set it, and forget it, either. Check in on your influencers periodically to ensure they’re complying with FTC rules and regulations.

Lord & Taylor escaped without a multimillion-dollar fine, but the charges brought against them were clear indicators that the FTC isn’t messing around. And there’s a good chance the next judgment brought against a non-compliant company will include many, many, zeros.

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