Social Media Influencer Marketing Campaigns: Establishing an Internal Endorsement Policy

This article is based upon a Practical Law Practice Note, one of more than 65,000 resource in Practical Law

Despite its seemingly casual nature, social media marketing poses unique risks to a company’s reputation and brand. Consequently, companies seeking to promote the use of their products, services, or brands through social media influencers and other third-party endorsers need to establish an internal social media endorsement policy that clearly defines the influencer’s role and protects the integrity of the organization.

What are “influencers”?

In the world of social media, an “influencer” is an individual with the power to affect the purchasing decisions of others due to their:

  • Position
  • Authority
  • Fame
  • Expertise or knowledge
  • Authentic relationship with their audience or followers

When hired for marketing purposes, influencers are effectively third-party contractors whose job is to blog, post, photograph, or otherwise promote a company’s products or services to their followers.

Unfortunately, influencers can run afoul of the law—and damage a company’s reputation—if they fail to disclose their relationship with the company or make false or misleading claims about its products or services. 

Why a policy is important

Establishing and implementing a comprehensive social media endorsement policy is critical to prevent a social media influencer campaign from backfiring.

A strong social media endorsement policy protects the integrity of both the company and the influencer by establishing the roles and responsibilities of the influencer and the company. The policy should also establish clear guidelines for disclosure and outline procedures for dealing with influencers or other sponsored endorsers that fail to comply with the company’s policy.

Effective social media endorsement policy guidelines

The following guidelines are not comprehensive, but they are necessary first steps in establishing an effective social media endorsement policy.

Before engaging an influencer, companies should adopt a written social media endorsement policy that complies with the Federal Trade Commission’s (FTC) official guidelines on endorsements, commonly known as the Endorsement Guides. The policy should provide examples of the types of material connections that bring an endorser under the company’s policy.

Some examples of applicable material connections are:

  • Paying an individual, affiliated marketer, or blog to post on the company’s behalf
  • Hiring an agency to blog, post, or serve as a community manager on social media
  • Providing people with free samples to review on social media
  • Providing free travel, accommodations, discounts, prizes, or other giveaways

Social media influencers hired by a company fall squarely under the definition of an endorser covered by the Endorsement Guides and would be covered by a company's social media endorsement policy.

Managing disclosure

Influencers that have a material connection to the company should understand they are subject to the FTC's Endorsement Guides and the company's policy. As they are considered sponsored endorsers, they must disclose their material connection to the company clearly and conspicuously when posting on social media about the company’s products and services.

Companies can be held liable for false advertising if their influencers fail to disclose their material connection or make a false claim about their products or services.

For instance, the FTC recommends that:

  • Videos should contain a disclosure in the video itself, not just in the video’s description or metadata
  • Disclosures should be superimposed over photos where they can easily be seen
  • Live streams should contain frequent disclosure statements, not just one

In all cases, disclosures should be clear and conspicuous, not hidden or ambiguous.

Influencers should also share their honest opinions, beliefs, and experiences. They should refrain from reviewing products they haven’t tried, they should not pretend a product is great when they don’t think it is, and they should not make claims about a product that the company does not have the evidence to back up.

Note: Full disclosure and honesty not only protect the company’s brand and help the company avoid liability for false advertising, they also safeguard the integrity of the influencer and help preserve the bond of trust influencers have with their audience. 

Monitoring compliance

Once an influencer starts posting on social media, there should be procedures and mechanisms in place for monitoring posts for compliance.

In order to ensure that everyone understands their legal obligations, consider creating a training program to communicate the company’s social media endorsement policy to employees, influencers, and creative agencies that manage influencers. Training programs should emphasize that social media disclosure rules exist to ensure transparency of communications between a company and its customers, so that customers have enough information to fully weigh the credibility of an influencer's messages.

To more fully protect themselves, companies should also establish procedures for handling influencers that do not comply with the policy or otherwise violate their obligations and responsibilities.

Whatever they are endorsing, social media influencers need to understand that trust between a company and its customers is paramount. The best way to protect that trust is to develop a social media endorsement policy everyone understands and can easily follow.

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