The Federal Trade Commission (FTC) has updated its endorsement guidelines for sponsored content, influencer marketing, and commercial online reviews for the first time in 14 years—essentially since long before these practices became widely used components of successful marketing strategies. While the updates are complicated and beyond the immediate understanding of many communicators, new research from business software firm Capterra nevertheless reveals that even though 3 in 4 (76 percent) marketers surveyed find the updated guidelines to be restrictive, 80 percent believe they will ultimately positively impact their ability to achieve social media marketing objectives.
The FTC’s updated guide—which will ideally minimize misconduct with its clearer direction and tighter scrutiny on deceptive advertising practices—couldn’t be more timely, as 93 percent of marketers say they have witnessed misleading endorsement practices among competitors, while nearly three in five have encountered the selling of fake social media followers or views to inflate social media engagement, and 57 percent have witnessed competitors selling or obtaining fake customer reviews.
The update has introduced new levels of complexity, and marketers are struggling with comprehension
More than a third (35 percent) of marketers are not at all or only moderately confident in their understanding of the update. Despite their comprehension challenges, marketers are more concerned about compliance among influencers (51 percent) than among industry professionals (42 percent).
Seventy-three percent of marketers ultimately believe that the updated guidelines will help consumers see influencer partnerships as more trustworthy and reliable
Brands are taking active steps to support compliance efforts, such as updating their influencer partnership policies and practices, increasing time monitoring or reviewing influencer content, and consulting legal experts or compliance specialists.
In forecasting resources, 92 percent of marketers say their company will factor in the updated guide when planning influencer budgets for the following year. Over half (51 percent) predict their company will increase budget to accommodate disclosure efforts.
“Influencer marketing has significantly changed in the last decade given the evolving nature of social media and endorsements,” said Meghan Bazaman, senior marketing analyst at Capterra, in a news release. “Businesses are under tighter scrutiny to maintain consumer trust, especially as they have become increasingly conscious of brand ethics. The FTC’s updated guidelines highlight the importance of maintaining transparency, which ultimately drives brand authenticity.”
Adjusting to new restrictions can be overwhelming, but prioritizing compliance will foster stronger influencer partnerships.