Influencer marketing has changed how brands advertise. Instead of traditional commercials, businesses are now relying on creators to promote products through posts, videos, livestreams, and podcasts that feel authentic and personal. But when money, free products, and other perks are involved, those endorsements are not just casual recommendations. They are advertising, which must be regulated. The Federal Trade Commission (FTC) enforces rules that require transparency in these partnerships. Even if content feels organic, the same rules of advertising apply.

Clear and Conspicuous Disclosure

The FTC requires disclosures to be “clear and conspicuous.” This means that they must be easy to notice and understand. The consumers shouldn’t have to search for them. The most appropriate disclosures use straightforward language like “Sponsored,” “Paid Partnership,” or “Advertisement.” These must appear early in a caption or video, not buried under hashtags or hidden behind a “read more” link.

Whether the content is in video or audio format, disclosures should be both visible and spoken. In case you are advertising via a livestream, they should be repeated periodically. It is also worth noting that while platform tools, such as built-in “Paid Partnership” labels, can help, they do not replace a clear disclosure within the content itself.

Substantiated and Honest Claims

In addition to disclosure, influencers and brands must ensure that endorsements are truthful and supported by evidence. The FTC’s Endorsement Guides require that endorsements reflect honest opinions and actual experiences. For example, an influencer cannot claim to use products they haven’t even tried or promise results they didn’t personally achieve. In the same vein, health-related claims must be supported by competent, reliable scientific evidence.

As a brand using influencer marketing, you should monitor the content your influencers post online and address any misleading statements when they arise. Although your business may not be responsible for every spontaneous comment, you must take reasonable steps to oversee the marketing.

Testimonials, Affiliate Links, and Expert Endorsements

Affiliate marketing also requires disclosure. This means that if a creator earns a commission from a link, even if indirectly, that relationship must be disclosed. This may be done with a simple statement explaining that a commission may be earned, as long as it is clear and understandable.

If you are an expert endorsing a product, you have an added layer of responsibility. One, if the content suggests that an endorser has professional expertise, that representation must be accurate. Secondly, a licensed professional may only endorse products within their area of competence. This is because consumers give greater weight to expert opinions, increasing the risk of harm when disclosures are incomplete or misleading.

Who Must Follow These FTC Rules?

You do not need millions of followers to fall under these rules. As long as there is a material connection, such as payment, free products, commissions, discounts, family relationships, or business partnerships, you must adhere to the rules.

Common Mistakes to Avoid

Many violations result from avoidable mistakes. These include:

Placing a disclosure at the end of posts

Relying on platform labels

Assuming followers already “know” about the partnership with a brand

Using stock photos instead of actual images

Contact the Internet Law and Compliance Attorneys at Revision Legal

For more information, contact the experienced Internet Law and Compliance Lawyers at Revision Legal. You can contact us through the form on this page or call (855) 473-8474.

The 2023 FTC Endorsement Guide Revisions

In June 2023, the FTC issued the most significant updates to its Endorsement Guides in over a decade, published at 88 Fed. Reg. 48092. The revised guides explicitly address the social media influencer economy. Key changes include: (1) a new definition of “clear and conspicuous” that applies a consumer-centric test; (2) explicit guidance that virtual influencers and AI-generated personas must disclose material connections just as human influencers do; (3) a prohibition on using incentivized reviews that are not clearly disclosed, even on third-party review platforms; and (4) expanded liability principles making clear that both the brand and the influencer can face FTC enforcement. In 2024, the FTC issued its final rule on fake reviews, 16 C.F.R. Part 465, adding per-violation civil penalties of up to $51,744 for violations occurring after the rule’s effective date.

Platform-Specific Requirements and Their Interaction with FTC Rules

Major social media platforms have their own branded content policies. Instagram and Facebook require use of the “Paid Partnership” label for sponsored content; YouTube requires checking the “paid promotion” disclosure box and including a verbal and on-screen disclosure; TikTok requires the “Paid Partnership” label. However, the FTC has been explicit: using a platform’s built-in disclosure tool does not by itself satisfy the FTC’s “clear and conspicuous” standard if the disclosure is positioned in a way that many consumers will not see. Disclosures must appear in a location and at a time when consumers are likely to see them, before they take the advertised action.

Liability Exposure for Brands and Agencies

The FTC’s position is that brands bear primary responsibility for the conduct of their influencer partners. In cases and enforcement letters sent to hundreds of brands and influencers from 2017 through 2024, the FTC made clear that a brand cannot insulate itself from liability by claiming it was unaware of non-disclosures by influencers it hired. Best practices include: requiring influencers to use specific disclosure language in the written agreement; building compliance monitoring into the program; providing influencers with a disclosure guide; including a right to require the influencer to edit or remove non-compliant content; and maintaining records of all agreements and posted content.

Health, Financial, and Environmental Claims: Heightened Scrutiny

Certain categories of claims carry heightened legal risk in influencer marketing. Health claims—including claims about weight loss, supplement efficacy, mental health benefits, or disease treatment—must be substantiated by competent and reliable scientific evidence under Section 5 of the FTC Act and may implicate FDA jurisdiction. Financial product endorsements, including cryptocurrency promotions, are subject to SEC jurisdiction and have resulted in enforcement actions against celebrities who promoted digital assets without disclosing compensation. Environmental claims are subject to the FTC’s Green Guides, 16 C.F.R. Part 260, which prohibit unqualified “eco-friendly” or “sustainable” claims that cannot be substantiated.

Drafting a Compliant Influencer Agreement

The influencer agreement is the legal foundation of a compliant influencer program. A legally sound influencer agreement should address: (1) specific FTC disclosure requirements, including exact language and placement; (2) representations by the influencer that all claims are truthful and based on genuine experience; (3) intellectual property ownership, including work-for-hire language for content you intend to repurpose; (4) likeness rights and the scope of your license to use the influencer’s name and image; (5) morality and conduct clauses allowing you to terminate the relationship and require content removal; and (6) indemnification provisions allocating FTC and third-party liability between the parties.

Influencer marketing can be a powerful channel—but only if it is built on a legally sound foundation. Revision Legal advises brands, agencies, and individual influencers on FTC compliance, influencer agreement drafting, and regulatory risk management. Contact us before your next campaign, or visit our Internet Law practice page to learn more.