Social media allows for an impressive variety of dynamic and interactive marketing that—before the dawn of the social Web—was unimaginable for most brands. Social media interaction generates content of is own, and using this content for marketing has strong appeal—after all, according to Nielsen, nearly four in five active Internet users visit social networks and blogs, and 70% of social media users hear others’ experiences at least once a month. Companies that leverage user-generated content gain authenticity and the credibility of personal relationships, but using social media comes with some risk to marketers.
The Federal Trade Commission (FTC) enforces laws against delivering false and misleading information to consumers through marketing. In 2013, the FTC updated its social media guidelines for the use of testimonials and gifts in advertising. Regarding testimonials, if the advertiser doesn’t have proof that the endorser’s experience represents what consumers will achieve by using the product, the ad must clearly and conspicuously disclose the generally expected results in the depicted circumstances. As for gifts, if there is a connection between the endorser and the marketer that would affect how people evaluate the endorsement, it should be disclosed.