Influencer marketing has long been part of the web hosting industry’s marketing arsenal, although it’s only recently come to be called that. Bloggers, vloggers, and prominent social media users are a powerful channel that web hosting providers can use to reach niche markets — after all, who better to promote web hosting than a blogger who has built a successful business on a web hosting company’s platform?
But web hosting providers have not always been as careful as they should to make clear the nature of the relationship between their business and the influencers who promote it. The FTC, whose job it is to regulate advertising in the US, is focusing more attention on influencer marketing and a spate of recent prosecutions shows the danger of not disclosing the financial relationship between influencers and advertisers.
Although the recent FTC press release was focused on celebrities and athletes who make paid endorsements, web hosting companies should also be on their guard. Typically, the FTC does not target the influencers themselves for prosecution, but the companies that pay them. Bloggers and vloggers may be willing to take the risk, but web hosting companies and other users of influencer marketing are being given an incentive to push for full disclosure.
So what does the FTC require? Just that if an influencer receives financial or other rewards from a company, the “motivation” underlying their endorsement is disclosed. If a web hosting company pays a blogger to promote their services, then the blogger should clearly disclose that they’ve been paid.
The FTC is interested in cases in which there is a “material connection” between the advertiser and the influencer. A material connection is anything that might “affect the weight and credibility” of an endorsement. It doesn’t have to be an exchange of money. Paying for a blogger to attend a conference is a material connection. Giving them free web hosting is a material connection, as are gifts, family relationships, and anything else that a reasonable person might think of as influencing the blogger’s opinion.
If there is a material connection, the influencer is obliged to disclose that connection so that the reader or viewer is in no doubt about factors that might have weight on the influencer’s opinions. The disclosure has to be “clear and conspicuous” — not buried in the fine print or as one of a dozen hashtags.
Endorsements include reviews, native advertising, traditional advertising, social media posts, and any other advertising-like material that endorses a web hosting company.
It’s worth noting that the rules also cover employees. If an employee uses social media to endorse the web hosting company they work for, they’re expected to disclose that connection.
All web hosting providers should familiarize themselves with the FTC’s rules. One of the best sources of information for non-lawyers is FTC’s Endorsement Guides: What People are Asking, which addresses questions about what constitutes material connections, endorsements, and proper disclosure. The official guidance can be found in Guides Concerning the Use of Endorsements and Testimonials in Advertising.
About the Author
Graeme Caldwell works as an inbound marketer for Nexcess, a leading provider of Magento and WordPress hosting. Follow Nexcess on Twitter at @nexcess, Like them on Facebook and check out their tech/hosting blog, https://blog.nexcess.net/.