80% of Marketers See Benefits in FTC’s Updated Endorsement Guidelines but Find Them Restrictive

73% of marketers believe that the updated guidelines will influence the credibility of influencer endorsements, according to Capterra’s research

For the first time in 14 years, the Federal Trade Commission (FTC) has updated its endorsement guidelines for sponsored content, influencer marketing, and commercial online reviews. While 80% of marketers believe the updated guidelines will ultimately positively impact their ability to achieve social media marketing objectives, 76% find them to be restrictive, according to a new Capterra survey.

“Businesses are under tighter scrutiny to maintain consumer trust, especially as they have become increasingly conscious of brand ethics. The FTC’s updated guidelines highlight the importance of maintaining transparency, which ultimately drives brand authenticity.”

The FTC’s updated guide is especially timely as 93% of marketers have witnessed misleading endorsement practices among competitors. Furthermore, nearly three in five marketers have encountered the selling of fake social media followers or views to inflate social media engagement, and 57% have witnessed competitors selling or obtaining fake customer reviews. Ideally, these updated guidelines will minimize misconduct by providing clearer direction and tighter scrutiny on deceptive advertising practices.

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Marketers say these notable updates by the FTC will have the most significant impact on their influencer marketing initiatives:

• An influencer tagging a brand is insufficient in disclosing the partnership, and disclosure must be explicitly overlaid in videos. (This directly impacts 35% of marketers.)
• Stricter disclosures for digital marketing targeted at children. (This directly impacts 33% of marketers.)
• A brand must disclose incentivized reviews or stop including them in total ratings. (This directly impacts 32% of marketers.)

The FTC’s update has introduced new levels of complexity, and marketers are struggling with comprehension. More than a third (35%) of marketers are not at all or only moderately confident in their understanding of the update. Despite their comprehension challenges, marketers are more concerned about compliance among influencers (51%) than among industry professionals (42%).

Seventy-three percent of marketers ultimately believe that the updated guidelines will help consumers see influencer partnerships as more trustworthy and reliable. Brands are taking active steps to support compliance efforts, such as updating their influencer partnership policies and practices, increasing time monitoring or reviewing influencer content, and consulting legal experts or compliance specialists.

In forecasting resources, 92% of marketers say their company will factor in the updated guide when planning influencer budgets for the following year. Over half (51%) predict their company will increase budget to accommodate disclosure efforts.

“Influencer marketing has significantly changed in the last decade given the evolving nature of social media and endorsements,” says Meghan Bazaman, senior marketing analyst at Capterra. “Businesses are under tighter scrutiny to maintain consumer trust, especially as they have become increasingly conscious of brand ethics. The FTC’s updated guidelines highlight the importance of maintaining transparency, which ultimately drives brand authenticity.”

Adjusting to new restrictions can be overwhelming, but prioritizing compliance will foster stronger influencer partnerships.

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