The Federal Trade Commission has updated advertising guides to "address emerging market trends." The rules are meant to clarify the line between leaving an honest product review and being a paid endorser.
The new rules come as many popular brands employ paid social media influencers to provide reviews of their products and services online. The FTC generally requires those who receive compensation for a product to note their connection to the brand.
"Suppose you meet someone who tells you about a great new product. The person says it performs wonderfully and offers fantastic new features that nobody else has. Would that recommendation factor into your decision to buy the product? Probably," the FTC said.
The new rules indicate that those who are given free goods and services should disclose to viewers and readers how they got the product. The FTC said a reviewer would not have to disclose that they got an item for free if it was widely available to the public, like a free sample.
"Say you’re planning a vacation. You do some research and find a glowing YouTube video review saying that a particular resort is the most luxurious place the reviewer has ever stayed. If you knew the hotel had paid the reviewer hundreds of dollars to say great things about it or that the reviewer had stayed there for several days for free, it could affect how much weight you’d give the endorsement. The reviewer should, therefore, let viewers know about that relationship," the FTC added.
The new rules stipulate ordinary social media users who review products they truly like and pay for out of their own pocket do not need to disclose anything.
Although many people might think that influencers have millions of followers, the U.S. Chamber of Commerce notes that many brands employ "microinfluencers." These are people with social media accounts with fewer than 100,000 followers.
The Chamber of Commerce says microinfluencers can be effective as they may have smaller but highly engaged audiences.
So just because someone doesn't have many followers doesn't mean they weren't paid for their review.
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