The Business of Being Cool: Avoid Unfair & Deceptive Offers within Influencer Marketing

Posted by Lauren S. Frisch on

This post on influencer marketing continues a two-part series regarding the confluence of social media marketing and consumer protection concerns. 

Today’s post focuses on influencer marketing, the nature of the relationship between companies that hire others to create sponsored social media posts and the individual influencers that are engaged for this purpose.

In recent years, a new trend has emerged whereby online retailers contact “aspiring” individual influencers under the guise of offering a partnership or modeling opportunity with their brand. The company, however, is actually engaging in a highly targeted form of direct advertising aimed at the individual influencer.

When Does an Offer Devolve into Unfair and Deceptive Advertising?
There is no clear guidance on when a retailer’s actions cross the line and are deemed deceptive. The Federal Trade Commission has issued “Disclosures 101 for Social Media Influencers”  and endorsement guidelines. These guidelines are aimed toward the content that must be contained in the post or ad, making it so the influencer’s followers understand the nature of the relationship between the influencer and the company.  However, there are no similar rules that explicitly set forth guidelines for what companies can say or offer to potential social media partners, or technically also consumers.

A Legitimate Influencer Marketing Campaign?
How do I know about all of this? Because my adorable dog, Ziggy, who has his own Instagram account, was targeted.   Yes, Ziggy has received no less than a dozen partnership/modeling offers from various retailers since his Instagram account has gone live. Unfortunately, many offers did not appear legitimate. Hopefully, Ziggy’s experience can begin to clarify how retailers can avoid running afoul of the law. 

First, let’s look at how a legitimate partnership might work.  The following is an example of a partnership offer based on one my dog received:

Hi puppy! 🐶 We love your account and would like to offer you the chance to pawtner together! 😍

In exchange for modeling our products on your page and in your Instagram Stories, you will get a 60% lifetime discount, a 15% discount for your followers, 10% commissions on sales made through your personalized discount link and be featured on our company’s Instagram page! 🐾

Although it is up for debate, this offer appears on the up-and-up based on a number of factors:
(1) it involves true quid pro quo;
(2) the message came from the company’s only Instagram account (which has nearly 50,000 followers); and
(3) the company has a legitimate and extensive website.

The problem starts when retailers utilize so-called partnership opportunities to merely secure sales of products or services. They do this by sending direct messages to make the Instagram user feel “selected” when they are truly being targeted.

The most flagrant example I have seen to date involved a company that wanted Ziggy to model a free harness. In truth, harnesses reserved through the “free” link would incur a $18.00 shipping fee — coincidentally, the same price a regular shopper would pay for the same harness. In contrast to the prior example, this company appeared to have multiple Instagram accounts (each of which had 100 or less followers) and its website only contained about 12 products available for purchase.

This “free” offer would likely be deemed unfair and deceptive (and thereby illegal) by the Georgia Department of Law’s Consumer Protection Division, the Federal Trade Commission and other state consumer protection divisions. It likely would be deemed unfair and deceptive because, among other reasons, it contains a misleading statement concerning the existence of a price reduction.

Helpful Tips
If you are considering a social media partnership or a modeling opportunity, please be certain to vet the offer’s content, social media presence and webpage.

Does the company have multiple accounts on the same platform or very few followers? If so, it probably is not legitimate. Also, ask yourself if the offer confers a bigger benefit to you or to the retailer? If it sounds too good to be true, that is a red flag. If you decide to accept an offer, keep in mind that you will need to comply with the Federal Trade Commission’s endorsement and disclosure guidelines.

If you are a company that engages individual influencers as part of your advertising and marketing strategy, then it is important that you are clear and up front about what terms are being offered.  Keep in mind that the primary purpose of any legitimate social media partnership is to obtain sales from the influencer’s followers; it should not be to directly profit from the influencer’s purchases. 

If you would like additional guidance on how to develop fair and transparent social media partnership opportunities, including FTC regulations for influencer marketing, please contact me at lfrisch@bfvlaw.com.