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FTC

Two Truths and a Lie: trust, #ad and privacy

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Gregarious Narain is on vacation until the end of the month. We’ve got a couple guests lined up to join me in his absence, but this week was a little hectic so (truth) I did not have time to prep them properly, so this week it was just me, and a slightly shorter show.

Would you like to join us on the show? It’s pretty easy. We broadcast live on Fridays at noon eastern for about 20 minutes. I send you a link to connect to the broadcast platform in the morning along with any show notes we’ve prepared and you log in by 11:50 am for an AV check. Sometimes you’ll be joining Greg and me, other times it is just me.

What will we talk about? We are open to discussing any topic related to marketing writ rather large — digital and social media, advertising, influencer marketing, technology , but also Internet culture, consumer behavior, digital fraud, privacy, artificial intelligence. If YOU have a topic you’d like to bring to the table within that rather large brief, we’d love to build a conversation around it with you. Email me at sgetgood@getgood.com or message me on Facebook.

Now to this week’s topic — consumer attitudes and trust. Joining me are my two guests this week, Mr. Rogers and Captain Rogers, two icons of honest integrity.

I only have 2 topics this week, because both are both truth and lie. The first is that consumers don’t like or engage with sponsored content the same way that they do so-called organic content. I wanted to discuss this (again) this week after reading a great op ed in Ad Age, In Defense of the Lowly Hashtags #ad and #sponsored by Natalie Zfat. Written in response to the statement “nobody likes the hashtag #ad” at an industry panel (filled with marketers), she shared her pride in using #ad because it meant she was able to successfully monetize her content while creating valuable content for readers.

This strikes a chord with me because I think treating sponsored content as a second class citizen is lazy thinking. Fact: transparency and best practice would dictate that we disclose relationships that might impact an endorsement even if the FTC Guidelines did not. But also Fact: the FTC guidelines in the US and similar guidelines in other countries DO dictate that we disclose when the content we create is sponsored or influenced by payment, business relationship or free product. And finally FACT: people are not as black and white in their consumption of content as the conceit organic:good, sponsored:less good makes it seem. I have seen more than a little organic content that is AWFUL and quite a lot of amazing sponsored content.

It is not that we don’t like advertising. It’s that we don’t like bad advertising. Whether an ad or a sponsored Instagram image. It is incumbent upon us as content creators to create quality content, full stop. When it is sponsored, we disclose, because it is the right thing to do. Cap agrees!

On social media, there is no situation where you do not have to disclose that the content is sponsored. Not even for celebrities. The reason for this is that on social, we have none of the cues that inform us that the endorsement is an advertisement that we have in other media. When we see a celebrity on Ellen, we know she is pitching her new movie because that is inherent in the talk show format. When we see an athlete in logo gear, we assume that he or she is sponsored by the brand, because that is how sponsorship works at that level. When we see the same celebrity promote something on Twitter or Instagram, her post looks just like all her other posts, and just like all the other posts of all the other people using the platform. There are no cues to clue us in that this post is sponsored. When an advertisement doesn’t look like an advertisement, it must be disclosed. Just this week I ran across another article about celebrities failing to disclose, this time in the UK. This is one time where wishing won’t make it so. Wishing you didn’t have to disclose or inventing all sorts of reasons why it doesn’t apply to you won’t change the facts. Because it is all about trust. Right, Mr. Rogers?

So, while it is true that people do treat sponsored content differently, the difference, in my opinion, is largely in the minds of the creators. If we stop assuming that people view sponsored content differently, create amazing quality content and honor the trust of our readers by being honest about our business relationships, we can be proud of #ad.

This week’s other part truth part myth is also related to trust. In this case, our trust in the social platforms and websites. Axios Media Trends reported this week on Census Bureau Data that indicates Americans are less worried about online privacy, largely, the report surmised because we have become accustomed to trading it for access and services.

Photo: Protest Stencil
Photo: Protest Stencil

But we are still concerned about data privacy, security and integrity. Witness the Twitter storm caused by the fake billboards in London last week.

They struck a chord because there is an underlying cognitive dissonance between the value consumers perceive they get from Facebook and the value they are increasingly aware Facebook gets from them. GenZ is already replacing it, including on college campuses, with new “facebooks” coming online, also reported in Media Trends this week.

I have been following the digital privacy conversation for more than 20 years, sometimes closely, sometimes less so but I am convinced we are finally at the inflection point where it matters as much to consumers as it does to advocates and geeks, and it is an increasingly informed consumer who understands that there are 3 issues: privacy security and integrity. Being willing to give up a little personal data in exchange for access is a fair trade but we are no less concerned about the protection of that data.

So. The truth is Americans may be less worried about privacy in general, but it is because they have become more informed. And we are very likely still very worried about how our information is used, whether information is true and whether bad actors can breach the walls. We just are more willing to accept the risk.

Two Truths and a Lie: The FTC Disclosure Guidelines

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Tom Chernaik, the CEO of CMPLY, Inc. joined me as our guest on Two Truths and a Lie this week. Greg Narain was traveling and could not join the conversation. We dropped some truth about the FTC disclosure requirements and hopefully dispelled a few myths.

Please forgive some of the technical difficulties at the beginning of the episode. It was our first program “on location,” I got a little lost on my way to Tom’s office downtown (I ALWAYS GET LOST BELOW WALL STREET) and in my rush to start on time, I forgot to plug in the Blue Yeti mic. Hey, it’s live, right??

About Tom
For more than 20 years, Tom Chernaik has worked with leading brands focusing on innovation and insight in marketing, law, social media, privacy and big data.

With a vision for addressing marketer concerns regarding compliance, Tom launched CMP.LY in 2009. He grew the company – rebranded as CommandPost – into the world’s leading social media disclosure solution and expanded the offering to include cross-platform social media measurement of audience and engagement. CommandPost was named a Gartner “Cool Vendor in Social Marketing” for 2015.

Tom holds multiple patents for his work developing innovative solutions for monitoring social network content for compliance, measurement and activation of offline processes. His work in the areas of disclosure and privacy has bridged the gaps between policy and practice with practical technology solutions.

Prior to launching his company, Tom spent more than 15 years in leadership and marketing roles for leading entertainment and media brands including XM Satellite Radio, All Indie (which he co-founded) and Gotham Records. He holds a BA in Liberal Arts from NYU and a JD from Yeshiva University’s Cardozo School of Law. Tom was also the Co-Chair of the Ethics Committee at the Word of Mouth Marketing Association from 2011-2017.

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For more posts about the FTC Guidelines, please review the FTC Category and the Ethics Category in the archives.

Disclosing sponsored content: Celebrities, Instagram and the FTC

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Picture1Last month, the FTC sent letters to a bunch of celebrities, reportedly chastising them for improper disclosures. Here’s what this means for marketers and influencers creating sponsored content.

First things first. There are no new FTC Guidelines for Advertising Disclosures. Still the same basic rules we’ve been working with for years:

  • Disclose material relationships. If an influencer is compensated, whether cash or in-kind, she has a material relationship with the brand.
  • Clear, conspicuous disclosure in proximity to the endorsement. Unambiguous language. Placed where the consumer will see/hear it when she sees or hears the brand mention, the endorsement.
  • Accurate. The influencer and the advertiser both have an obligation to strive for accuracy and correct errors.

More details in my  FTC Disclosure Guidance deck.

What we did get in April was additional FTC guidance on the disclosures.

FTC guidance typically comes when the agency takes an enforcement action. In this case, it was the 90 letters to various celebrities and celebrity influencers who regularly promote brands using insufficient or unclear disclosures, sent in response to a complaint from watchdog group Public Citizen last Fall.

Generally, FTC guidance focuses on what to NOT do by highlighting practices that it deems insufficient. The FTC does not give an exact blueprint on the right way to disclose a brand relationship. If someone tells you (and I have heard this): “This is the official FTC disclosure,” they do not know what they are talking about. There is no standard, official disclosure. Just guidelines and guidance and the business practices we have developed to comply.

What was in the current guidance? Nothing surprising to those of us that have actually read the guidelines and previous guidance. The only surprising thing was that the agency took the step to reach out to influencers. Typically it focuses on advertiser compliance, for example the Lord & Taylor Instagram dress campaign of March 2015, settled in March 2016.

Here are some of the reasons I think they took the step of addressing influencers directly.

First, letters were sent to celebrities with massive followings. We don’t know exactly who received letters but names in the Public Citizen complaint included David Beckham, Mark Wahlberg, Jenny McCarthy, Chris Pratt and Kendall Jenner. Whether or not celebrities have to disclose has been a source of much confusion, but the test is pretty clear — what will the consumer understand? When the celebrity is in a television or print advertisement, or an athlete is wearing her sponsor’s gear as she performs, the audience has a good understanding of the relationship of the celebrity to the brand. The context tells us. On Instagram, where most of the reported infractions were posted, we have no such context. Everyone is technically, literally technically, the same on Instagram. My posts are viewed by my followers in exactly the same interface as Kim Kardashian West’s view hers. Without disclosure, we don’t know whether the endorsement was sponsored.

Second, the disclosures that folks were using were inadequate. Phrases like “in partnership with” or “my partner,” the hashtag #sp (which has been on record as inadequate for years) and branded hashtags are not sufficient disclosures. Mixing up the disclosure with a bunch of hashtags or putting it at the end of a post where it might not be seen are not sufficient disclosures.

The clearest disclosure on platforms that don’t have character limits is Sponsored Post (or Video or Content), and on platforms that have character limits, #sponsored or #ad. Placed at/near the beginning of the endorsement, especially on posts that truncate on mobile like Instagram. In fact, the FTC was unusually specific when it came to this point, apparently in all the letters:

“…the letters each addressed one point specific to Instagram posts — consumers viewing Instagram posts on mobile devices typically see only the first three lines of a longer post unless they click “more,” which many may not do. The staff’s letters informed recipients that when making endorsements on Instagram, they should disclose any material connection above the “more” button.” (from the FTC press release)

Finally, the problem was spreading. Increasingly, brands are turning to influencers instead of traditional agencies.  Especially on Instagram. The longer the FTC let the inadequate disclosures stand, the harder it would be to rein it in. Issuing enforcement letters to celebrities, not just big social influencers, guaranteed a certain amount of media coverage to help the agency get the facts in front of consumers and influencers. In addition to its press release and media outreach, the agency posted the news on both its consumer and BTB blogs.

Bottom line — we are far better off creating amazing content that our audience will love, sponsored and unsponsored alike, than trying to evade the disclosure requirements. Using obscure and inadequate disclosures, especially when there is intent to deceive, betrays the trust of the audience. Don’t do it. It’s not fair to your audience and the FTC is watching.

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In other disclosure news, Facebook has expanded the availability of its branded content tool. ALL Facebook pages that post sponsored content must post it through the branded content tool, which labels the post as PAID. This ensures that sponsored content is adequately disclosed on Facebook even if the organic disclosure is not strong. The branded content tool is currently only available for PAGES. Apply here; turnaround is about 2 days. You no longer have to be verified, and approval to use the branded content tool does NOT mean you are verified (blue check.)

FTC Update: Operation Full Disclosure; Disclosing a compensated trip

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Last Thursday, the Federal Trade Commission issued a press release about its Operation “Full Disclosure.”
The most important thing for bloggers to know about Operation “Full Disclosure” is that it has NOTHING to do with sponsored posts on blogs.  It was aimed squarely at national television and print advertisers that failed to make adequate disclosures in their ads. More than 60 companies received FTC warning letters, largely focusing on disclosures that were in fine print, easy to miss or hard to read.

The FTC Guidelines apply to ALL advertising claims and endorsements – traditional media, social media, even direct word-of-mouth. While its publications and hearings over the past few years have focused on defining and clarifying the guidelines’ impact on social and online media, the FTC clearly hasn’t lost sight of its mandate to protect the consumer from ALL misleading advertising.As the press release clearly summarizes:

“The FTC’s longstanding guidance to companies is that disclosures in their ads should be close to the claims to which they relate – not hidden or buried in unrelated details – and they should appear in a font that is easy to read and in a shade that stands out against the background. Disclosures for television ads should be on the screen long enough to be noticed, read, and understood, and other elements in the ads should not obscure or distract from the disclosures.

The staff letters advised advertisers that to meet the “clear and conspicuous” standard, their disclosures should use clear and unambiguous language and should stand out in the advertising – consumers should be able to notice disclosures easily; they should not have to look for them.”

The purpose of the FTC guidelines is to avoid consumer confusion about advertising messages. By making sure that advertising does not contain misleading statements or hide important facts or conditions, and that any interest, such as compensation or affiliation with a company, an endorser might have in a product she recommends be clearly disclosed.

Store these 3 principal FTC requirements permanently in a room in your mind palace:

  1. Disclosure is required when you are compensated, and you endorse (write or speak about) the entity that compensated you. If you are not compensated, either in cash or goods, there is nothing to disclose.
  2. Claims must be true and the source disclosed (my opinion, scientific research showed…, the company said….)
  3. Disclosures should use clear unambiguous language that stands out and is positioned close to the claim or endorsement.

Speaking of confusion….

There seems to be some confusion in the blogosphere of late as to how the guidelines apply to compensated trips. Here’s my take.

  • If you are PAID to go on a trip, you must disclose whenever you endorse/write/speak about the entity that compensated you. Compensation can be cash, product or service. In your blog posts. In your tweets and Facebook posts. You write about the sponsor, you disclose you were sponsored.
  • If part of a compensated assignment includes a certain number of social shares about the experience but not necessarily about the sponsor, and you are asked to use a specific hashtag and/or link to a website for the sponsor, you must disclose. Including the hashtag or link is a promotional activity for which you were compensated.
  • If you want to tweet about the sunset, or say how tasty the orange juice was at venue that is NOT the sponsor, or whatever,  you don’t need to disclose. You are not endorsing the sponsor, so you don’t need a hashtag or a disclosure. Where there is no compensation, no disclosure is required.
  • That said, if you write an unrelated blog post about elements of the trip that does not include the sponsor, you should still disclose that you were sponsored. Not because the FTC requires it, but because you should give your sponsor the love.
  • When in doubt err on the side of disclosure.

Here is an example, completely made up.

SuperChic Hotel sponsors you on a trip to the Mexican Riviera. They pay your airfare, comp your hotel, restaurant meals and rental car, and give you an allowance for sightseeing and incidentals. How should you disclose:

  • Any time you mention SuperChic Hotel, your readers should know you were sponsored. Blog posts, Twitter, Pinterest, Facebook, Instagram, videos. Whatever.  Even if you were not specifically compensated for an activity, such as a pinning. Disclose.
  • Mention the airline, the car rental company, restaurants and boutiques not affiliated with SuperChic Hotel, sightseeing attractions? Unless SuperChic Hotel provided specific instructions on where to go/vendor to use, you do NOT need to disclose a compensated relationship with the vendors. Your relationship is with SuperChic, not with them. That said, as a best practice,  I recommend you disclose that your overall trip was sponsored.
  • Want to tweet about the sand on the beach or the gorgeous sunset. Unless your sponsor is the beach, which is possible, or the sun, which is not, no disclosure required.

This scenario gets a little more complicated if the sponsor is the regional tourist authority, especially if it plans the details of your trip. In that case, I would make the call that anything in the region is supported by the tourist authority, and the relationship should be disclosed with every endorsement. Even the beauty of the beach.

What about a compensated speaking engagement that also pays your way — any or all of fee, comped registration, airfare, hotel? Your presence on the roster of the event is a clear notice of your affiliation with the event. Any reasonable consumer of the conference content understands that you have a relationship with the conference.

The amount of your compensation is not relevant. When it comes to  FTC disclosure, it doesn’t matter if it is a liptstick or a Lamborghini;  a free lipstick is the same as a car, comped airline ticket or $1000 fee.  In my opinion, to double down on disclosure, if you decide to write a glowing post about the conference, or tweet props to the conference organizers, you should disclose your affiliation, but you don’t need to preface every tweet about the conference content with the hashtag #ad unless you were specifically compensated to promote the conference content.

A note about hashtags in social posts: Never use #spon. It is not at all clear. Use  #ad or #hosted or #sponsor or #sponsored, and don’t bury the hashtag at the end of your social post. I prefer to see them in context if possible or at the very front of the post if not.

Examples:

Having a great time on trip to Mexico #sponsored by #SuperChic.
Rooms at #sponsor #SuperChic are gorgeous. Now off to the spa.
#ad Don’t miss the regional tasting menu at #SuperChic restaurant

Lastly, a word of advice. The FTC guidelines are pretty simple.  Disclosure is required so the consumer of the advertising can put your endorsements in the proper context. It’s common sense — Wouldn’t you want to know if the writer of a glowing blog post about a product you intended to buy was compensated by the company? If it was someone you trusted, you’d still take the advice, but you would want the context of the compensation. The FTC provides guidelines and advice about proper disclosure, and will from time to time go on the record about what it considers inadequate disclosure (like #spon), but it doesn’t dictate a specific way to disclose. When you read articles or blog posts that report that there is a specific, correct way to disclose, take them with the grain of salt. What you are reading is someone’s interpretation of the guidelines cast as an absolute.

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FTC Endorsement Guidelines Update: Disclosing a Sweeps or Contest Entry on Social Media

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Cole Haan WestFarms

(Photo credit: Wikipedia)

 Disclosure: Not a lawyer. Don’t play one on the Internet. But I’ve studied the FTC endorsement guidelines. A lot. 

Yesterday news broke that the FTC had issued a warning to shoe manufacturer Cole Haan, notifying it that the disclosures used by consumers in its Wandering Sole contest on Pinterest were not sufficiently clear as to the potential material connection between contest entrants and the company. Said the letter (as quoted in MediaPost):

“We do not believe that the “#WanderingSole” hashtag adequately communicated the financial incentive — a material connection — between contestants and Cole Haan,” Mary Engle, FTC associate director for advertising practices, said in a letter sent to the retailer’s attorneys on March 20.

This represents an evolution in the FTC’s thinking with regard to disclosure of a sweepstakes or contest entry. In the early days, it did not explicitly require such a disclosure when a blogger mentioned a brand in a post to enter a sweeps or contest.  In part, because there was no material relationship between the parties, so there was nothing to disclose. And, for the most part, back then (2010!), in text-based formats like blogs and Twitter, sweeps and contest entries were often disclosed as part of the entry instructions. Hence no confusion.  [Facebook only allowed contest entries on pages recently.]

So what has changed? The endorsement guidelines are grounded in two basic concepts:

  • is there a material (compensated) relationship between the parties, and
  • is there a possibility of consumer confusion about the relationship?

In my opinion, the FTC’s thinking has evolved due to the prevalence of contest and sweepstakes entries, particularly on the highly visual Pinterest, that mimic organic endorsements, and do not have clear disclosure that they are a contest or sweepstakes entry. In other words, that the posting is motivated by a commercial incentive, not an organic interest in the product. Quite simply, all these sweeps and contests were causing too much consumer confusion.

The resolution is pretty simple, and follows the same simple guidelines that normal disclosure does. When possible, use natural language to disclose the relationship (Pinned for the Blah Blah Sweepstakes) and use clear hashtags (#sweepsentry) or @ addressing (@BlahSweepsEntry) to make it crystal clear. Using the hashtag or @ addressing is useful even if you also require a natural language disclosure as it makes it easier to track the entries. IMPORTANT: Make the proper disclosure part of the requirements to enter the sweeps or contest.

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