Has one of your clients received a “friendly” letter from the FTC lately inquiring about its disclosure and transparency practices in influencer marketing?

“Operation Full Disclosure, Part 2,” a correspondence campaign that began circulating in March, appears in full swing, and it’s a not-so-subtle education effort by the FTC to ensure brands (and their agencies) know and understand the disclosure rules when using influencers in their marketing campaigns – especially those conducted in social channels.

On the surface, agencies know the dos and don’ts of content publishing and social media sharing:

• Don’t plagiarize

• Don’t steal images

• Do source properly, and so on.

Or do they? What about legal compliance issues in content marketing? Or following the rules surrounding native advertising? Or providing correct guidance to an influencer you recruit for a campaign?

According to research conducted by Polar last summer, more than 30 percent of native ads placed do not comply with FTC disclosure requirements (per Polar’s “The State of Native Disclosure,” July 2016).

And as reported in research shared last summer on AdvertisingAge, from influence marketing firm SheSpeaks, 25 percent of influencers have actually been asked by a brand NOT to disclose their relationships. Both are bad numbers for brands and their agencies, and signal a need for more education and insight.

As agencies continue to mature in these areas and earn a bigger revenue share running social, content and native ad campaigns, the bar is raised on the required diligence in compliance, policy creation and the campaign review/approval/distribution processes.

Here are some common risk areas for agencies:

Intellectual Property Misuse or Infringement

Are you and your employees familiar with standard fair ad rules for brand use, and do you know that those apply when using brand trademarks on social or in content marketing?

Does your agency consistently obtain written permission to use content and assets or others?

The risks:

• Trademark misuse: using another brand’s trademarks, such as TM use in hashtags or comparative product claims
• Copyright Infringement: using any content of a third party without permission, for commercial purpose. This includes a frequently missed step by agencies – failing to secure rights in content from freelancers or independent contractors in writing.

Endorsements or Testimonials

Does your agency know and follow FTC rules on required disclosures in social media and content marketing? Agencies are especially vulnerable on this point given the popularity of influencer marketing strategies.

The risks:

• Failure to disclose compensation (of ANY KIND) from brand to “endorser”
• Failure to disclose any important relationship between brand and “endorser” (this applies not just to influencers, but also to brand employees and, yes, your agency)
• Attempting to appear neutral in any way in your content, when you aren’t

Native Advertising

Do your agency and clients distinguish clearly between paid content placed in a native ad context and the surrounding editorial content?

The risks:

• Failure to physically distinguish in a meaningful, noticeable way between editorial and ad content
• Failure to disclose the content as advertising or promotional material
• Failure to disclose the identity of the brand placing or sponsoring the content

Understanding the legal compliance requirements of these tactics is crucial for agencies, who can face liability along with their brand clients for failure to follow the rules.

More to the point, brand clients are increasingly looking for guidance from their agencies on these points – which is an excellent opportunity for smart agencies to stand apart from the pack in a highly competitive environment.

Fortunately you’re not alone, and there are tools, processes and tips that can help your agency navigate the legal environment when you execute these strategies. Want more information? Read more on content marketing and social media law, and contact me direct.