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Tips for Alcohol Suppliers Utilizing Social Media

In light of the Federal Trade Commission’s (FTC) 2023 revisions to its Endorsement Guides, it is essential to ensure that your business is compliant. While the alcohol industry is known for product innovation, the industry is also embracing innovation on the marketing and advertising front, most notably with the use of social media. Given the FTC’s recent announcements and enforcement actions, any business marketing their products via social media, influencers or endorsements, including alcohol advertisers, should be aware of basic requirements. Below are recommendations based on that guidance to help ensure your company keeps its social media activity compliant.

  • Third-Party Media Content: Endorsement Requirements
    • The endorser is subject to the same rules and obligations as the industry member. In other words, the alcohol rules that apply to suppliers advertising alcohol also apply to the endorser.
    • Endorsements cannot convey expressed or implied claims that would be deceptive if the advertiser made them directly.
      • For example, a post can be false or misleading if an influencer presents health claims associated with consuming the product.
    • All claims made through endorsements (express or implicit) must have adequate substantiation.
    • Endorsements must reflect the honest opinions, findings, beliefs or experience of the endorser.
    • If the ad represents that the endorser consumed the product, they must have been a genuine user.
    • The endorser’s audience should be at least 73.8% 21 years of age or older.
  • Third-Party Media Content: Disclosure Requirements
    • Material connections must be adequately disclosed on all social media endorsements.
      • Material connections include any financial, employment, personal or family relationship with a brand (e.g., receiving free product, free admission to an event, swag or anything of value).
      • Note posts from employees and the requirements that may be triggered in the event they post about your product.
    • Adequate disclosure includes the following:
      • It requires the connection to be clear and conspicuous (i.e., it “can’t be missed”).
      • It can be satisfied with “#ad” or other hashtags that sufficiently convey the material connection (such as #advertisement, #sponsored, #paid ad, #promotion).
      • You must display it before “clicking more” on the post, which is typically within the first two or three lines. However, a best practice is to place the disclosure at the beginning of the post.
      • It requires the disclosure to be “standing alone” in the endorsement (i.e., not buried within the post and not buried in a string of hashtags).
  • Tips When Drafting Endorser/Influencer Agreements
    • Incorporate appropriate provisions in agreements with influencers and celebrities.
        • Include a description of the content the influencer will be creating, including timing, mentions and aesthetics. Ensure you understand not just what the endorser or influencer plans to say but also what they plan to do (actions).
        • Include the type, form and frequency of the posting [...]

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Federal Trade Commission Reminder about Advertising Disclosures

In mid-April, the Federal Trade Commission (FTC) sent out 90 letters to advertisers, celebrity endorsers and influencers who use their fame and the power of digital advertising to help promote products.  The facts in each letter vary, but the FTC’s message was a strong reminder that clear and conspicuous disclosure is required if a “material connection” exists between and endorser and the marketer of a product.

Typically, the marketer is a manufacturer, importer or an advertising agency that establishes a relationship with an endorser.  In 2009, the FTC created endorsement guides to ensure that consumers are on notice that an endorser or influencer is being compensated by a marketer.  In 2015, the FTC published an Enforcement Policy Statement on Deceptively Formatted Advertisements.  Those sources provide straightforward guidance to inform consumers that an endorser is acting on behalf of a marketer and to differentiate advertising from truly independent news or reviews of products.

Throughout history, producers of consumer goods marketed their wares with endorsements from famous people and “satisfied consumers.”  Social media provides an enormous boost to the most ancient form of marketing, “word of mouth.”  An image of your product with a celebrity or the perfect “ordinary consumer” in a creative setting can quickly go viral to millions of consumers or receive hundreds of thousands of likes on Facebook.

All ads should be truthful, targeted appropriately, and compliant with industry codes.  If appropriate, ads should also be clearly identified as paid endorsements or advertising material to reduce the risk of consumer deception.  These principles are especially important in the digital domain where viewers tend to move rapidly from one destination to another.

A successful ad that includes use of celebrities or influencers should meet the FTC’s standards to avoid future enforcement initiatives.  The reputation of the advertiser and endorser as well as the integrity of the brands should not be placed at risk by the failure to include clear and conspicuous notices or disclaimers.  Congress granted the FTC broad jurisdiction to police deceptive ads.  The FTC’s guidance has now been around long enough to be on the checklist of every advertiser—particularly those under pressure to publish the next iconic image on Facebook or Instagram!




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