Seattle, WA – January 16, 2017
BrandVerity, a leading provider of brand protection software, today released results from a new report: Putting Disclosures to the Test: Marketing Compliance, Bloggers, Advertisers, and FTC Requirements. The study finds that despite the Federal Trade Commision (FTC)’s increased communication and education on the guidelines concerning the disclosure of endorsements, the overwhelming majority (96 percent) of fashion bloggers failed to meet the basic standards as outlined by the FTC.
The FTC released its first set of guidelines governing the general use of endorsements in online advertising in 2009. But until recently there has been little focus on or enforcement of these rules in the native advertising space. 2016 cases against Warner Brothers and Lord & Taylor brought native advertising into the spotlight, with the FTC ruling that the companies had misled consumers by failing to disclose sponsored content.
The BrandVerity study focuses on a specific segment of native advertising—fashion affiliate bloggers—and therefore the data is not representative of all industries. However, the rampant non-compliance within the blogs surveyed does raise questions about whether or not the fashion industry is unique in its misunderstanding or rejection of FTC guidelines.
To evaluate compliance, BrandVerity created a compliance ruleset based on the FTC’s published guidelines and enforcement orders. BrandVerity then loaded that ruleset into its Marketing Compliance tool to automatically evaluate the 100 most popular fashion blogs.
Key findings include:
- Failure is the Norm: Overall, only four blog posts contained disclosures that passed the FTC’s guidelines. Of the 93 blog posts that included clear evidence of a commercial relationship between a blogger and advertiser, 80 percent of posts did not include any disclosure. Of the 19 posts that did include a disclosure, 15 failed to pass the full compliance test.
- Bloggers and Advertisers are Better Together: When there was direct collaboration between blogger and brand, the vast majority included some form of disclosure. Of the 24 blog posts with evidence of direct advertiser involvement, 19 included a disclosure. It was significantly more difficult to find a disclosure for blog posts that contained affiliate links but showed no explicit collaboration between the blogger and an advertiser. In fact, of the 69 blog posts that fell into this category, not a single one of them contained a disclosure.
- All Disclosures Are Not Created Equal: Of the 19 disclosures that were found, only four passed the full compliance threshold.
- Disproportionate Impact on Advertisers: On average, each blog post with a disclosure violation exposed three times as many advertisers to risk. The average post used 10 affiliate links to promote three separate advertisers. In total, the 89 posts with disclosure violations included 902 affiliate links across 16 networks.
“The survey results uncover a large disconnect between the FTC guidelines on paper and what is happening in practice,” said said David Naffziger, CEO of BrandVerity. “To meet the FTC’s minimum requirements, advertisers should put in place a reasonable monitoring program of their affiliate marketers’ content.”
About the Study
100 fashion bloggers were evaluated for FTC compliance during a three-month period from September 2016 to November 2016. The compliance ruleset developed by Brandverity consisted of six “yes” or “no” questions, which came from a review of the FTC’s published guidance and orders. The evaluation of the 100 blog sites was automated through the use of BrandVerity’s Marketing Compliance tool.
About BrandVerity
Since 2008, BrandVerity has been providing services that protect brands and ensure that their marketing partners are on-brand and compliant. From our Seattle and London offices, we develop and support services that are simple, straightforward and extremely efficient. For more information, visit www.brandverity.com.