Working with brands is one of the main income sources for many content creators online. This generally falls under the umbrella of “influencer marketing”, and there are regulations in many regions surrounding how these need to be legally disclosed. Both the content creator and the brand may be legally liable if required disclosures are not made.
While different regions have different specific requirements for how sponsored content should be disclosed, there are some general guiding principles that underlie most regulations. Check your local advertising regulations for specific requirements in your region.
What needs to be disclosed?
Rules around disclosures are intended to ensure truthful advertising, to protect consumers and make it fair for brands operating in the space.
In general, a potential conflict of interest that could affect the credibility of an endorsement needs to be made clear to an ordinary person who comes across the message – for example, a product review, a giveaway, or even simply a recommendation of a brand or tagging them in a photo.
Some common situations that may require disclosure include:
Sponsorship usually refers to creating content (e.g. an honest product review) created in exchange for something of value, such as money, “free” or discounted products or services or travel. These are also referred to as paid partnerships, barter arrangements or contra collaborations.
Note: There does not have to be a formal signed contract for a legally binding contract to exist! Generally all that is required is a mutual agreement that there will be some sort of service performed in exchange for something of value. There can also be tax implications even if no money is involved as “free products” can be considered barter income.
Product samples are often sent to media and influencers. These can be part of a barter or contra exchange, or there may not be any obligation to feature the products in any content (although of course, the brand is hoping for coverage!).
Affiliate links and codes give the content creator a commission when someone makes a purchase using the link or the code.
Personal, family or employment relationships usually count as material connections that need to be disclosed.
How to disclose
Many regions have guidelines for appropriate disclosure on different platforms with helpful examples. Additionally, some platforms and companies have their own requirements for disclosure.
- Disclosures should be easily seen with the endorsement message. For example:
- A disclosure on a video should be at the start of the video itself, and not just in the description.
- If you are an employee of a company, it may not be enough to list your employer on your profile.
- A disclosure should be viewable without expanding the caption (“above-the-fold”) – for example, in the top 2-3 lines in an Instagram caption.
- Some platforms have in-built disclosure features, such as “Paid promotion” on YouTube, “Paid partnership” notifications on Instagram and TikTok. However, these alone may not be enough to make the relationship clear.
- Hashtags such as #ad or #sponsored can be standard practice on some platforms.
- In some situations the relationship might not be enough to influence the endorsement. For example, if a company is handing out free sachets of shampoo to pedestrians and you review it, a disclosure probably isn’t necessary.
When in doubt, it’s safest to simply explain the relationship between you and the company in a way that your audience can easily understand, and can’t miss. Special wording is usually not required as long as a reasonable person can understand the disclosure.
Keep in mind that your audience may include people in foreign countries, and foreign laws may also apply.
Some regions have regulations around whether some forms of disclosure are too ambiguous or unclear.
- Regulators in many regions including the US, UK and Australia have indicated that “sp”, “spon”, “collab”, “thanks” or “ambassador” are too ambiguous to be easily understood.
- Placing “#ad” in the middle of a list of hashtags would likely not be conspicuous enough to fulfil legal disclosure obligations.
- Above-the-fold disclosure is required in many regions, such as by starting a caption with #ad.
Again, when in doubt, it’s safest to put yourself in the shoes of someone coming across your post. Would they see the disclosure and understand what you mean?
Won’t people stop trusting me?
Working with brands can make some audience members distrust your recommendations. However, not disclosing brand relationships is usually illegal, and will erode your audience’s trust more. Many consumers can easily spot when a post is sponsored and an appropriate disclosure is not made.
Resources for specific regions
The Federal Trade Commission (FTC) has detailed endorsement guides including many examples as well as specific resources to help influencers understand disclosure requirements. These will likely be applicable if you do not live in the US but you have a substantial audience there.
The Advertising Standards Authority (ASA) has many resources for navigating influencer marketing regulations, including links to relevant rulings.
The Australian Association of National Advertisers (AANA) Code of Ethics contains guidelines for influencer marketing. Their Ad Standards website also has guides. Results of advertising complaints can be found here.
The TGA has special advertising rules for endorsements and testimonials (reviews) involving therapeutic goods such as sunscreens.