FTC Compliant Influencer Marketing: A Complete Guide to Disclosure Requirements (2025)

Influencer marketing has transformed from a niche strategy into a multi-billion dollar industry, with many becoming influencers seemingly overnight. However, with this growth has come increased regulatory scrutiny from organizations like the Federal Trade Commission (FTC), the National Advertising Division (NAD), and international bodies across Canada, the UK, and Australia. Brands and influencers who fail to properly disclose material connections face not only financial penalties but also significant reputational damage.

This comprehensive guide examines landmark regulatory cases from 2016 to 2025, providing actionable insights to help brands and influencers create compliant content while maintaining authenticity and engagement.

Understanding Material Connections: What Must Be Disclosed

A material connection is any relationship between an endorser and a brand that consumers would want to know about when evaluating the endorsement’s credibility. This includes:

• Monetary compensation (payment for posts, commissions, affiliate links)
• Free products or services (gifted items, complimentary experiences)
• Ownership stakes (being a founder, investor, or employee)
• Personal relationships (family ties, friendships with brand representatives)
• Any incentives (discount codes, exclusive access, contest entries)

The key principle: If a connection exists that might affect the credibility of an endorsement, it must be disclosed clearly and conspicuously.

Landmark FTC Cases: Lessons from Enforcement Actions

Lord & Taylor (March 2016): The Instagram Influencer Campaign That Changed Everything

The Case: Lord & Taylor settled with the FTC after paying 50 fashion influencers between $1,000 and $4,000 each to post photos of themselves wearing a paisley dress from the retailer’s Design Lab collection. The company also provided each influencer with the free dress and required them to include “@lordandtaylor” and “#DesignLab” in their captions—but critically, they did not require disclosure of the paid partnership.

The Impact: The campaign generated 11.4 million impressions and 328,000 brand engagements over a single weekend, causing the dress to sell out. However, consumers had no way of knowing these posts were paid advertisements rather than genuine recommendations.

Key Takeaway: Tags and hashtags alone are not sufficient disclosure. Influencers must explicitly state when they’ve been compensated for their posts, whether through payment, free products, or other incentives.

Warner Bros. (July 2016): The “Below the Fold” Disclosure Problem

The Case: Warner Bros. settled FTC charges related to their marketing campaign for the video game “Middle Earth: Shadow of Mordor.” The company paid prominent YouTubers, including PewDiePie (whose video alone received 3.7 million views), hundreds to tens of thousands of dollars to create positive gameplay videos. While disclosure language existed, it was buried in the video description box, often below the “Show More” button—making it virtually invisible to most viewers.

The Impact: Over 5.5 million views were generated from sponsored content that appeared to be independent reviews. When influencers shared these videos on Facebook or Twitter, the disclosure language didn’t transfer at all.

Key Takeaways:

• Disclosures in video descriptions are insufficient—they must appear in the video itself
• For video content, verbal disclosures are required at the beginning
• Disclosures must be “above the fold” and immediately visible
• Cross-platform sharing must maintain disclosure visibility

CSGO Lotto (September 2017): When Influencers Are Also Owners

The Case: In the FTC’s first enforcement action against individual influencers, gaming personalities Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell promoted their own gambling website, CSGO Lotto, without disclosing they were the company’s president and vice president. They also paid other influencers between $2,500 and $55,000 to promote the site without requiring proper disclosures.

The Impact: Cassell’s promotional videos alone garnered over 5.7 million views. Consumers believed they were watching independent users sharing gambling wins, not watching company owners promoting their own business.

Key Takeaways:

• Ownership stakes and executive positions must always be disclosed
• Companies are responsible for ensuring their paid influencers make proper disclosures
• Material connections cannot be hidden even if they seem obvious to insiders
• This case established that individual influencers can be held personally liable

Teami (March 2020): Substantiation and Hidden Hashtag Disclosures

The Case: Teami, a detox tea company, faced FTC action for making unsubstantiated health claims (including weight loss and illness treatment) and using high-profile influencers like Cardi B who failed to adequately disclose their paid relationships. Disclosures were often hidden under the “more” button or buried within strings of hashtags.

Key Takeaways:

• Health and performance claims require scientific substantiation
• Disclosures must be prominent and impossible to miss
• Hiding disclosures in hashtag groups is deceptive
• Celebrity influencers are held to the same standards as micro-influencers

Recent NAD Cases (2025): The New Era of Self-Regulation

The National Advertising Division (NAD) has become increasingly active in policing influencer marketing practices:

Revolve (February 2025): The “Gifted” Relationship

Revolve’s paid influencers posted content tagging @Revolve without clearly disclosing that clothing had been gifted or that other compensation existed. NAD ruled that any form of compensation—monetary or in-kind—requires clear disclosure.

Dr. Squatch (July 2025): Affiliate Link Compliance

This case resulted from Dr. Squatch proactively removing non-compliant affiliate posts, demonstrating that brands can take corrective action when they identify disclosure issues.

Kevin Hart (February 2025): Celebrity Disclosure Standards

Even A-list celebrities must disclose material connections with brands. Fame does not exempt anyone from disclosure requirements.

International Enforcement: A Global Perspective

Canada: Competition Bureau Actions

In December 2019, the Competition Bureau reviewed influencer marketing across industries and sent letters to nearly 100 brands and agencies, warning that posts were not clearly identified as advertisements. In December 2023, they took action against Amp Me Inc. for making misleading “free” claims and purchasing fake reviews.

United Kingdom: ASA Rulings

The UK’s Advertising Standards Authority (ASA) has targeted both traditional influencers and brand founders:

• Mrs. Hinch (March 2023): Influencer Sophie Hinchliffe posted about her own Tesco collaboration line without disclosure
• We Are TALA (May 2024): Brand founder Grace Beverley promoted TALA products as if she were an independent reviewer rather than the company owner

Australia: ACCC Enforcement

In January 2023, Australia’s Competition & Consumer Commission launched an investigation of over 100 influencers after receiving approximately 150 public complaints about undisclosed advertisements, particularly in beauty, fashion, and travel sectors.

Case Summary Chart: Major Influencer Compliance Rulings (2016–2025)

Best Practices for FTC-Compliant Influencer Marketing

For Brands

1. Contractual Requirements

• Include explicit disclosure language in all influencer contracts
• Specify where and how disclosures must appear
• Require pre-approval of posts to verify compliance
• Include termination clauses for non-compliance

2. Monitoring and Training

• Implement ongoing monitoring programs for influencer content
• Provide clear guidance documents and training sessions
• Create disclosure templates and examples
• Conduct regular compliance audits

3. Documentation

• Maintain records of all influencer agreements
• Document training and compliance communications
• Keep screenshots of disclosed content
• Retain evidence of corrective actions taken

For Influencers

1. Disclosure Language

Acceptable disclosures:

• “#ad” or “#sponsored” (at the beginning of captions, not buried in hashtags)
• “Paid partnership with [Brand]”
• “This is a paid advertisement for [Brand]”
• “[Brand] is paying me to share this”
• “Thanks to [Brand] for sponsoring this post”

Insufficient disclosures:

• “#partner” or “#ambassador” (too vague)
• “#sp” or “#spon” (unclear abbreviations)
• Brand tags without explanation
• Disclosures only in video descriptions
• “Thanks [Brand]” without clarifying compensation

2. Platform-Specific Guidelines

Instagram:

• Use the “Paid Partnership” label feature
• Include disclosure language in the first two lines of captions
• Ensure disclosures are visible without tapping “more”
• For Stories, include disclosure in the actual image/video, not just a sticker

YouTube:

• Verbally disclose at the video’s beginning (within first 30 seconds)
• Include disclosure in video title when possible
• Place disclosure at top of description box
• Use YouTube’s “Includes paid promotion” checkbox

TikTok:

• Use the “Paid Partnership” label feature
• Include verbal disclosure in the video
• Add text overlay disclosure visible throughout the video
• State disclosure in caption’s first line

Blog Posts:

• Include disclosure before affiliate links
• Place disclosure at the beginning of reviews
• Use clear, unambiguous language
• Make disclosure impossible to miss

For Affiliate Marketers

Special Considerations:

• Disclose affiliate relationships before the link appears
• Use clear language: “I earn a commission if you purchase through this link”
• Don’t rely solely on hashtags like “#affiliate”
• Update older posts that lack proper disclosures

The Cost of Non-Compliance

Violations of FTC regulations can result in:

• Civil penalties of up to $50,120 per violation (as of 2025)
• Mandatory corrective advertising campaigns
• 20-year consent orders requiring ongoing compliance monitoring
• Reputational damage that can end influencer careers or damage brand trust
• Legal liability for both brands and individual influencers

Emerging Trends and Future Considerations

AI and Virtual Influencers

As AI-generated influencers become more common, disclosure requirements will likely extend to clarifying when content is created by non-human entities.

Platform Responsibility

Social media platforms are increasingly adding native disclosure tools, and future regulations may require platforms to enforce disclosure compliance.

International Harmonization

As influencer marketing becomes truly global, expect more coordination between regulatory bodies across different countries.

Compliance Checklist

Use this checklist for every sponsored post:

• [  ] Material connection clearly identified
• [  ] Disclosure appears before “more” button or fold
• [  ] Disclosure language is simple and unambiguous
• [  ] Platform-native disclosure tools used (when available)
• [  ] Video content includes verbal disclosure
• [  ] Disclosure maintains visibility across all platforms where content is shared
• [  ] All health, performance, or efficacy claims are substantiated
• [  ] Brand has reviewed and approved disclosure method
• [  ] Documentation of partnership agreement exists
• [  ] Screenshot of compliant post retained for records

Want to know more about how we prioritize compliance at InfluenceLogic? Email us at compliance@influencelogic.com and we’ll be happy to assist you.

Conclusion: Transparency Builds Trust

While disclosure requirements may seem burdensome, they serve a crucial purpose: maintaining consumer trust. Studies consistently show that audiences don’t object to sponsored content when it’s clearly labeled—they object to feeling deceived.

The regulatory landscape will continue evolving as influencer marketing matures. Brands and creators who prioritize transparency and compliance today will build stronger, more authentic relationships with their audiences while avoiding costly enforcement actions.

Remember: When in doubt, disclose. It’s always better to over-disclose than to face regulatory action or lose audience trust.

Sounds like too much to juggle? Worried about the FTC wreaking havoc on your brand for one wrong step? Reach out to us, and we’ll take care of your influencer marketing campaign while keeping compliance at the forefront.

This guide is for informational purposes only and does not constitute legal advice. For specific compliance questions, consult with a legal professional experienced in advertising law and FTC regulations.

Resources

• FTC Endorsement Guides
• FTC Business Guidance
• NAD Case Reports
• ASA UK Rulings
• Competition Bureau Canada
• ACCC Australia