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).
- Material connections must be adequately disclosed on all social media endorsements.
- Tips When Drafting Endorser/Influencer Agreements
- Incorporate appropriate provisions in agreements with influencers and celebrities.
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- 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 and compensation.
- Include legal requirements (i.e., compliance with policies, applicable alcohol industry advertising codes (the Distilled Spirits Council of the United States Code of Responsible Practices; the Beer Institute’s Advertising and Marketing Code; and the Wine Institute’s Code of Advertising Standards), FTC requirements and indemnification).
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- Be mindful of posts that include elements such as sweepstakes or giveaways, and ensure the endorser follows the applicable alcohol rules and regulations associated with running those programs.
- Incorporate appropriate provisions in agreements with influencers and celebrities.
For questions about how to keep your social media activity compliant, please contact Lesli Esposito or Nichole Shustack.
