If you’re asking what is influencer marketing, here’s the short version: brands connect with their audiences through influencers who promote products. And once money, gifts or discounts are involved, disclosure rules apply.
This guide sits within the wider topic of digital marketing, and it covers how creator partnerships work and what US advertising rules say about them.
| Item | Value |
|---|---|
| FTC updated Endorsement Guides released | June 29, 2023 |
| Previous version of the Guides | 2009 |
| Follower range covered by the disclosure requirement | 500 followers to more than 1 million followers |
| Size of the FTC’s updated FAQ | 40 questions and answers |
| Disclosure standard | Clear and conspicuous |
These figures come from Marketing Dive and KTS Law, and they describe the position as of the FTC’s June 2023 update. Rules and figures can change, so check the source before you rely on them.
How influencer marketing works
At its simplest, influencer marketing means a brand arranges for a person with an engaged following to feature its product or service. The audience already follows that person, so the recommendation reaches them in a feed they chose to open.
One lawyer writing for Marketing Dive argues that influencers can connect brands with their target audiences in a way that is more impactful, intentional and authentic than any other advertising medium. Treat that as an informed opinion rather than a measured result.
Several parties can be involved in one campaign:
- The brand, which is the advertiser paying for or supplying the product.
- The influencer, who creates and publishes the post, story or video.
- Intermediaries such as ad agencies and public relations firms that help pass sponsored content along.
The payment does not have to be cash. KTS Law lists incentives such as payment, discounts, free products and early access as things that can create a connection worth disclosing.
Organic content versus sponsored content
Many influencers build trust through organic, non-sponsored content such as ask me anything question boxes, giveaways, get ready with me videos and to be read lists. That trust is what makes a later sponsored post valuable to a brand.
It also blurs the line. A get ready with me video that mixes products the creator bought with products a brand gifted looks the same to a viewer, which is where disclosure rules come in.
What the FTC’s June 2023 update changed
The Federal Trade Commission released its updated Endorsement Guides on June 29, 2023, alongside updated FAQs, to address social media influencer marketing among other things. According to KTS Law, it was the first update since the 2009 version, and the changes deepened guidance rather than rewriting it.
KTS Law highlights these shifts:
- The definition of an endorsement was broadened to cover tags and reviews, and it includes fake reviews, virtual influencers, testimonials, social media tags and the name or seal of an organization.
- A disclosure must be clear and conspicuous, meaning difficult to miss and easily understandable by ordinary consumers.
- Advertisers should not distort the overall picture of consumer reviews by suppressing the negative ones.
- A short section flags advertising directed toward children as a special concern, without giving examples.
The FTC also refreshed its business FAQ, which KTS Law says includes 40 questions and answers with extra examples on material connections, disclosures, platform tools, incentives and monitoring influencers.
When and where you must disclose a paid relationship
A material connection must be disclosed when it exists between an influencer and a brand and viewers of the sponsored post would not reasonably expect it. KTS Law defines “material” as sufficiently significant to affect the weight or credibility of the endorsement.
The requirement is not limited to big accounts. Marketing Dive’s guest author notes it applies to all influencers, from nano influencers with 500 followers to mega influencers with more than 1 million followers.
The FTC did not prescribe magic wording. Disclosures presented clearly and conspicuously are generally acceptable in forms such as these:
- Ad
- Paid ad
- #ad
- Advertisement
- Sponsored by XYZ
- Promotion by XYZ
A discount code is not enough on its own. It may suggest a connection exists, but it does not necessarily show a financial relationship.
Placement matters as much as wording. A visual endorsement such as an image should carry at least a visual disclosure, for example over the picture or in the caption. A spoken endorsement, such as talking about a product on stories, should carry at least a spoken disclosure, although using both is preferable.
Platform labels need care too. Built-in disclosure tools may not be sufficient, and the FTC looks at placement, readability and clarity. If the label falls short, the influencer or brand may be on the hook, not the platform.
For a series of sponsored posts, include the disclosure with each post. You cannot assume viewers will read more than one and link them together.
Who is responsible when an influencer post misleads?
Responsibility is shared. KTS Law says liability can extend to every link in the chain, including the advertiser, the agency, the influencer and any intermediary.
Marketing Dive’s guest author adds that a brand may be liable for a deceptive endorsement even if the influencer is not. In practice, three principles from KTS Law’s summary stand out:
- An endorser cannot say what the advertiser cannot say directly.
- If a claim is false, everyone in the chain of publication can be held liable, whatever their position.
- A truthful claim may still be false advertising if it reflects an atypical experience or atypical results, unless the expected results are clearly disclosed.
Brands are expected to run reasonable programs to train and monitor their influencers. The FTC says that while this is not a safe harbor, good faith and effective guidance, monitoring and remedial action should reduce the incidence of deceptive claims.
Short-lived posts such as stories are hard to watch in real time. The Marketing Dive piece suggests a pre-approval process for those formats.
Planning a campaign with the rules in mind
Before you contact any creator, decide what the partnership is meant to achieve. Writing smart goals for marketing gives you a yardstick for picking creators, agreeing content and judging results afterwards.
Next, build the rules into the brief. Ask for the disclosure on every post, agree the claims the creator may make, and decide how you will review content before it goes live.
Once posts are published, you will want to see what they achieve. A primer such as google analytics 4 for beginners can help you start measuring the website traffic your campaign sends.
This page is general information, not legal advice. If a campaign carries real risk, ask a qualified adviser to review it against the latest FTC guidance.
Frequently asked questions
Do small influencers need to disclose sponsored posts?
Show answer
Yes. As of the FTC’s June 2023 update, as summarised by Marketing Dive, the disclosure requirement applies to all influencers, from accounts with 500 followers to those with more than 1 million followers.
Is a discount code enough to show a paid relationship?
Show answer
No. Marketing Dive’s guest author says a unique discount code is not a sufficient material connection disclosure, because it does not necessarily show that a financial relationship exists.
Can a brand be liable if the influencer broke the rules?
Show answer
It can. According to Marketing Dive, a brand may be liable for a deceptive endorsement even if the influencer is not, which is why the FTC expects brands to train and monitor their influencers.
Does the platform’s built-in sponsored label cover me?
Show answer
Not always. Both sources say built-in disclosure tools may not be sufficient, because the FTC weighs placement, readability and clarity.
