It must be obvious to a reasonable consumer whether content is an ad or not, according to FTC guidelines.
The FTC released guidelines for paid endorsements in 2009 that laid out how marketers should offer disclosures on social media. And in December it rolled out native advertising guidelines, which apply to Lord & Taylor’s sponsored post in Nylon Magazine.
The FTC will not seek action against the publisher and influencers involved, although it has occasionally held other parties responsible besides the marketer. Last September, for instance, it reached a settlement with multichannel network Machinima.
But because Lord & Taylor had editorial control over the post, Spector said, the FTC decided “they were the proper party to seek out enforcement action.”
Although the FTC doesn’t have the resources to monitor how well marketers are adhering to the current disclosure guidelines overall, Spector and the FTC have noticed an uptick in influencer marketing. It’s the agency’s hope brands will follow the best practice guidelines it lays out in places like the FTC’s blog.
“What we are asking people to do is not onerous,” Spector said. “It’s just putting #ad in there. That doesn’t require that much space and effort.”
Update: Lord & Taylor released the following statement to AdExchanger, edited for conciseness: "In the FTC's consent order announced today, there is no finding of wrongdoing whatsoever. A year ago, when it came to our attention that there were potential issues with how the influencers posted about a dress in this campaign, we took immediate action with the social media agencies that were supporting us on it to ensure that clear disclosures were made. ... We remain dedicated to our core values of transparency and honesty in everything that we do for our customers."