Suppose you meet someone who tells you about a great new product. She tells you it performs wonderfully and offers fantastic new features that nobody else has. Would that recommendation factor into your decision to buy the product? Probably.

Now suppose the person works for the company that sells the product – or has been paid by the company to tout the product. Would you want to know that when you’re evaluating the endorser’s glowing recommendation? You bet.

These are the words and an underlying philosophy behind The FTC — Federal Trade Commission that’s designed to protect America’s customers from scams. Other countries like Australia, Germany, the UK etc. also adopted or have similar institutions as the FTC.

Declaring sponsored content and paid partnerships is an integral part of online business, especially for influencer marketers. As social media platforms became more popular, the government started enforcing rules such as this to make sure all customers are protected. After all, we would all like to know if we’re being sold genuine or paid endorsement.

So, you might be wondering…

What are the rules on declaring sponsored content and partnerships?

The most basic rule for this, per The FTC Endorsement Guides, is — If there is a “material” connection between an advertiser and an endorser (influencer), such connection should be clearly disclosed in the post. A material connection is considered to be a monetary payment, business or family relationship or even the gift of a free product. This rule applies to both advertisers and endorsers, so each party has to make it perfectly clear.

In past, things such as free gifts did not have to be declared as sponsored content, but as of recently, that too is now covered by The FTC. Unless you want legal issues, there is no way to avoid disclosing influencer-advertiser relationships anymore.

Moving on to more details — let’s talk about platform-specific methods of disclosing paid sponsored content and partnerships.

Disclosures rules vary depending on the platform.

As an example of this, let’s take a look at Instagram and YouTube influencers specifically.

On Instagram, you can add a sub-headline to show you’re endorsing a brand, however, this is not enough. You should also add written proof as well as a hashtag #sponsored along with it. On Youtube, however, there are no such things as sub-headlines that disclose paid partnerships, so you have to mention it at the beginning of the video, as well as have it written down in the video description.

Each social media platform will have its unique twist, but the universal rule is to always have it written down as a part of the post. You also can’t hide your disclosure behind “read more” sections in the description — it has to be stated in the beginning.

Another thing that The FTC explains clearly is the use of hashtags. Every influencer and marketer should use hashtags such as #ad and #sponsored in their description, however, they should stay away from clever hashtags such as #sp, #thanks_(brand name) etc. This is explicitly stated to make sure the endorsement is as clear as possible to the audience.

Back to the free gifts — they also have to be disclosed in the post, at least mentioned as a free gift instead of a fully paid endorsement. The only time when you can endorse a product without disclosing it is when you’ve bought the product yourself. If you’ve spent your own money on it, you can endorse it as you like, just make sure it’s not a continuing trend as that can be seen as a paid endorsement.

The FTC rules for influencers and advertisers are rough, but also crucial in the world of marketing. You should always be aware of the basic principles so you can follow them to avoid getting in trouble — and I hope this article helped you with that.

If you want to know more details about this, check out The FTC’s official endorsement guide for influencers & marketers by clicking on the link here.