Getting Real About the FTC's New UGC Guidelines: What You Need to Know

The FTC just dropped new guidelines in October 2024, and they're pretty serious about how brands, influencers, and agencies handle UGC and disclosures in digital advertising. With platforms like Instagram, TikTok, and Facebook being such a huge part of brand visibility nowadays, getting this right is super important.
The New Rules: Here's What You Need to Know
The FTC's updated guidelines emphasize one core principle: "If there is a material connection between an endorser and an advertiser, that connection should be clearly and conspicuously disclosed".

Whether it’s payment, free products, or other benefits, transparency is required.

These rules apply across platforms, especially in social media where influencer marketing and customer endorsements significantly impact sales.

Key requirements include:

1. Clear, Visible Disclosures
Disclosures must be prominent and unmistakable. Avoid ambiguous language or hidden placements. For example, “#ad” or “Sponsored by [Brand]” should appear early and visibly in posts.

What to Avoid: Vague phrases like “Thanks to [Brand]” or simply tagging a brand without stating the connection.

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2. Influencer Responsibility
Influencers must disclose any brand relationship. Whether the arrangement includes free products or payment, the connection should be clear in text, speech, and visuals where applicable.

Example: An influencer promoting a product should state, “Gifted by [Brand]” or “Paid Partnership with [Brand]” early in the content.

What to Avoid: Sole reliance on platform tools like “Paid Partnership” without further context in the post itself.

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3. Managing UGC: Prioritizing Authenticity
Leveraging authentic user-generated content (UGC) is powerful for DTC brands, but the FTC’s guidelines stress that incentivized content must be disclosed. Any offers, like discounts in exchange for reviews, require transparent statements from customers about the incentive received.

Example: Customers could state, “I received a discount for my review of [Brand].”

What to Avoid: Encouraging only positive reviews or hiding incentives received by reviewers. Practices like filtering out negative reviews or faking positive ones are prohibited.

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4. Expanded Definitions of Endorsements
FTC rules now cover virtual influencers and indirect endorsements, like tagging brands without transparency about sponsorships. Whether an influencer is virtual or real, disclosure is mandatory.

Example: Virtual influencers should clearly disclose sponsorship in captions or videos.

What to Avoid: Tagging a brand without explaining a sponsorship or assuming virtual influencers don’t need the same transparency as real people.

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5. Accountability for Agencies and Partners
Agencies that facilitate endorsements share responsibility for FTC compliance, requiring them to ensure influencers follow disclosure rules. This includes training and post-review before publication.

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6. Transparent Handling of Negative Reviews
Suppressing negative feedback, filtering reviews, or only allowing positive ones is prohibited. Instead, encourage honest reviews and use negative feedback as an opportunity to improve.

What to Avoid: Offering extra incentives to remove negative reviews or manipulating feedback to appear more favorable.

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Practical Steps for DTC Brands and Agencies
To ensure compliance with the FTC’s updated guidelines, DTC brands and agencies should follow these best practices:

Monitor and Audit Content
Regularly review UGC and influencer content to ensure compliance. Implement an audit process to confirm that disclosures are clear and prominent.

Educate Influencers and Partners
Provide training on proper disclosures for influencers, UGC creators, and partners. Share clear examples of required disclosures across platforms like Instagram, Facebook, and TikTok.

Maintain Transparency in Paid Campaigns
Clearly disclose all partnerships and compensation in paid campaigns, including discounts for reviews or influencer payments.

Stay Informed
The FTC’s guidelines evolve with digital trends, so routinely check for updates to stay aligned with current standards.

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Reference / Sources:
https://www.ftc.gov/system/files/documents/plain-language/1007a_soliciting-and-paying-for-online-reviews-508_0.pdf
https://www.govinfo.gov/content/pkg/FR-2023-07-31/pdf/2023-15581.pdf
https://www.ftc.gov/business-guidance/resources/ftcs-endorsement-guides-what-people-are-asking

Disclosure:
This is not legal advice. For questions or elaboration, please seek the counsel of a lawyer.