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All cannabis businesses and ancillary businesses that invest in influencer and affiliate advertising programs to promote their brands, products, and services are required to ensure their influencers and affiliates follow the Federal Trade Commission’s (FTC) related advertising and endorsement disclosure guidelines. Fines can be hefty, so it’s important to know the rules and monitor your influencer and affiliate partners.
In June 2023, the FTC updated its advertising and endorsement disclosure rules, which can be found in the Code of Federal Regulations (CFR). You can download the updated, applicable section of the CFR here: 16 CFR Part 255: Guides Concerning the Use of Endorsements and Testimonials in Advertising.
The full guidelines in the CFR are 80 pages, so the FTC put together an FTC Endorsement Guides Q&A that provides some of the most important information businesses, influencers, and affiliates should know. At a minimum, read the Q&A and require that your influencers and affiliates read it as well.
While I’m not an attorney and can’t offer legal advice, I can share some highlights from the new FTC guidelines to help you understand the recent changes.
For example, the new guidelines require that all verbal and written disclosures are in the same language as the content. If one of your influencers or affiliates publishes a blog post in English, then the required disclosure must also be in English. On the other hand, if one of your influencers or affiliates publishes a video in Spanish, then the required verbal and written disclosures must be in Spanish.
Following are some additional key changes that cannabis and cannabis-related businesses should know about the new FTC guidelines for endorsements and testimonials.
Product or Service Review Content
The FTC has long required that influencers and affiliates who you compensate through money, free products and services, or any other way must disclose the material connection in their content.
The new updates in the CFR now state that influencers and affiliates cannot make any claims that they’ve used your product or service if they have not done so. All reviews must be based on actual use, experience, and facts.
Social Media Content
Previously, social media content needed to include text and/or a hashtag that disclosed the material connection between the publisher and the business, but the disclosure could appear anywhere in the social media content.
With the recent CFR update, the disclosure needs to be much more obvious (i.e., unavoidable). Specifically, “ad” or “advertisement” must now appear directly before an affiliate link in any social media posts that your influencers or affiliates publish.
Blog Posts, Articles, and Other Written Content
The new FTC guidelines related to advertising and endorsement disclosures affect both new content and existing written content. This means if influencers and affiliates previously published blog posts, articles, guides, and so on that include your affiliate links or recommendations of your products and services, the content must be updated to follow the new requirements.
To comply with the new FTC rules, written content must include wording that is impossible to miss and stating the publisher earns commissions if readers click the affiliate link(s) or purchase/use the product(s) and/or service(s) recommended in the content. Furthermore, the disclosure must appear before any affiliate links within the written content.
Video Content
The new rules for disclosures in video content affect both the videos and the written descriptions that influencers and affiliates create. First, videos must now begin with a verbal disclosure saying the publisher earns commissions if viewers click on links in the video.
In addition, a written disclosure is required before the first affiliate link in the video description that says, “I earn commissions if you shop through the links below.” Alternately, “ad” can be placed before the first affiliate link in the video description.
Like written content, videos that have already been published will need to be updated to adhere to the new FTC guidelines. The written description must be updated to meet the current guidelines for any viewable videos published by influencers or affiliates before June 28, 2023. The actual video content does not need to be updated.
Key Takeaways about the New FTC Endorsement Guidelines
Keep in mind, the FTC requires any person or entity that a business compensates through money, products, services, or in any other way to follow its guidelines for endorsements and testimonials in advertising. Don’t let semantics get your business in trouble. Just because you may not think someone who writes a social media post or blog post about your products or services is an influencer of affiliate doesn’t mean the FTC agrees.
Bottom-line, review the new FTC guidelines and make sure your business, influencers, and affiliates are following the rules. If the content people are publishing about your business and brand is useful and meaningful, it won’t matter to the audience if #ad appears before it.
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