Get All Access for $5/mo

Brands: Get Up to Date on Federal Trade Commission Guidelines Be aware of new FTC regulations regarding advertising and social media.

By Eric Dahan Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

Mark Van Scyoc |

If you're a brand that is advertising anything online, it is critical to know how to comply with Federal Trade Commission (FTC) guidelines. If you're a brand that is actively advertising on social media, there are even more nuanced rules you need to be aware of.

Understand influencers.

The current preferred method of advertising on social media is through influencers, popular content creators who've amassed large followings based on the merit of their content. The FTC has implemented consumer protection laws to ensure that items and services for purchase are accurately being portrayed by brands, which extends to their portrayal by influencers.

As brands continue to partner with social media influencers through paid advertisements, they need to be more than just aware of the FTC guidelines, but compliant. The FTC has already taken action against companies who have not followed suit.

This past June, the FTC updated their guidelines for brands for the first time since 2010. While their underlying message has not changed, they have added updated guidelines for social media issues that did not exist in 2010.

Related: Court Rules FTC Can Come After Your Company After a Cyber Attack

Disclosure is key.

Influencers are trusted by their audience as experts on certain topics or content categories. Therefore, they're trusted authorities within their respective fields, so its important for them to respect the trust they've earned from their audience and draw a distinction between a personal recommendation and a sponsored recommendation. Influencers who are posting must clearly and conspicuously state their relationship with the brand. The golden rule for influencers is: When in doubt, disclose.

Contest and sweepstakes are no exception to the FTC. When an influencer is promoting a contest on their social media account, a clear disclosure needs to go along with it. In this case, the responsibility falls on the contest's sponsor, so if your brand is promoting a contest through influencers, make sure that they are aware of this important responsibility.

On Twitter, the FTC does not take the 140 character limit as an excuse for non-disclosure. They recommend that influencers use #ad, since it takes only three characters to be in compliance -- and tweet real estate is precious.

Related: Apple's Tim Cook Made a Rookie Mistake and Might Face SEC Sanctions

Advertisers and influencers need the same voice.

Successful social media advertising needs to be able to fall in line with the influencer's existing voice. Consumers look to their favorite influencers for their recommendations, regardless of whether or not they are engaged in sponsored posts, so it's not just the FTC that influencers have to worry about when disclosing sponsored content.

Consumers are quick to judge when advertising on social attempts to be surreptitious. It is therefore important for influencers to follow guidelines not only because of legal requirements, but also because they can serve as helpful guardrails for influencers to maintain transparency for their followers.

To keep your brand safe, make sure that the influencers you partner with are aware the FTC's guidelines. These are not just suggestions, they're requirements, and no brand wants to be made an example of by the FTC.

Related: No Eggs, No Mayo: FDA Goes After Hampton Creek for Naming Its Vegan Spread 'Just Mayo'

Eric Dahan

Co-Founder and CEO of Open Influence

Eric Dahan is co-founder and CEO of Open Influence, where he oversees the strategic vision and growth of the company. Dahan brings a rich understanding of mathematics, game theory and social sciences to his role.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick


ChatGPT is Becoming More Human-Like. Here's How The Tool is Getting Smarter at Replicating Your Voice, Brand and Personality.

AI can be instrumental in building your brand and boosting awareness, but the right approach is critical. A custom GPT delivers tailored collateral based on your ethos, personality and unique positioning factors.

Business News

Apple Reportedly Isn't Paying OpenAI to Use ChatGPT in iPhones

The next big iPhone update brings ChatGPT directly to Apple devices.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Is the AI Industry Consolidating? Hugging Face CEO Says More AI Entrepreneurs Are Looking to Be Acquired

Clément Delangue, the CEO of Hugging Face, a $4.5 billion startup, says he gets at least 10 acquisition requests a week and it's "increased quite a lot."

Growing a Business

He Immigrated to the U.S. and Got a Job at McDonald's — Then His Aversion to Being 'Too Comfortable' Led to a Fast-Growing Company That's Hard to Miss

Voyo Popovic launched his moving and storage company in 2018 — and he's been innovating in the industry ever since.

Business News

Sony Pictures Entertainment Purchases Struggling, Cult-Favorite Movie Theater Chain

Alamo Drafthouse originally emerged from bankruptcy in June 2021.