Social media users today don’t want to be bothered by traditional advertising. If they see something even remotely resembling a sales pitch, they’ll swipe left in the blink of an eye.

Instead, brands are turning to influencers for their marketing needs. After all, what could be better than someone giving a glowing review of your product to an already engaged audience?

As perfect a tactic as it seems, influencer marketing comes with some risks. Whether you’re already recognized as an influencer or you’re just getting started, there are some important things you should be aware of:

Influencer Marketing is Regulated by the FTC

In 2015, the Federal Trade Commission issued a set of guidelines meant to clarify online marketers’ disclosure obligations in social media marketing, particularly in regard to the use of endorsements and testimonials.

In a nutshell, any statement made by an employee, blogger, influencer, or another person must be their honest opinion and can’t be used to make a claim that the company couldn’t legally make themselves. In addition, if those individuals have received any type of incentive from the company, they must disclose that information.

The FTC considers content that fails to comply with these requirements to be deceptive advertising. While it is typically the advertisers or their ad agencies who are held responsible, individual endorsers may be held liable as well.

Disclosures and Disclaimers are Super Important

As an influencer, the FTC requires you to disclosure brand partnerships in every single post, when applicable. The rules are fairly simple and center around the four Ps:

Prominence: Disclosures should be clearly visible and written in a reasonably sized font

Presentation: Disclosures should be easily understood by consumers

Placement: Disclosures should be posted in areas where consumers would typically view content

Proximity: Disclosures should be listed beside the products or services being promoted

In addition, if you are providing advice or recommendations as part of your review, be careful about what you say. Always protect yourself by telling your fans to consult with a professional before acting upon the information you are providing. For example, “Please consult with your doctor before beginning this or any other workout program.”

Material Incentives

One of the best parts about being a social media influencer is all the free stuff: Free trips. Exclusive products and services. VIP event tickets. Cash.

But is it all kosher? Are there laws that govern what you can and cannot accept? Basically, companies can compensate you in any way they see fit, as long as that compensation is disclosed. To avoid any legal issues, each post should contain a disclaimer that the recommendation or the product being reviewed is sponsored.

Be Careful with Contests

In 2014, the FTC reprimanded Cole Haan for insufficient disclosure when they hosted their Pinterest Wandering Sole sweepstakes. In a nutshell, fans were encouraged to share five photos of their favorite Cole Haan shoes, along with their favorite place to wander, and tag them #WanderingSole. The most creative entry would receive a $1000 prize.

The FTC declared that using only the contest hashtag #WanderingSole wasn’t sufficient enough to alert viewers that it was a contest entry and not a product endorsement. The following year, the board updated its FAQs to specifically address social media giveaways. They now recommend:

  • including the hashtags #sweepstakes, #contest, or #giveaway
  • and/or the words: enter for a chance to win.
Protecting Your IP

Social media influencers depend heavily on their intellectual property, such as posts, photos, and videos. Therefore, protecting your IP should be at the top of your list. One of the best things you can do to protect yourself from theft is to copyright your creative work and trademark your brand. Additionally, if you give anyone use of your name, logo, or materials for promotional purposes, the limits to use should be clearly spelled out in a legal contract.

Still concerned that you may be doing social media wrong as an influencer or online business? Then check out my list of the Top 5 DON’Ts of Social Media and Online Marketing. 

Building your online presence can be lucrative in more ways than one, but it’s important to be cognizant of potential legal concerns. For more information on this and other topics like it, subscribe to my newsletter for weekly updates straight to your inbox.