The Federal Trade Commission (FTC) has recently updated its guidelines regarding User-Generated Content (UGC) and digital advertising. These changes will significantly impact how brands and agencies handle content creation for paid media.

UGC has been a top-performing creative type for most DTC brands, and these new FTC updates have many people asking if performance will decline once implemented. Will hook rates plummet when someone sees the "this is an ad" disclaimer?

In this article, we break down the new FTC rules, outline what changes your brand or agency needs to implement and provide examples to help you navigate these updates effectively.

Clear and Conspicuous Disclosures

UGC Images:

The FTC emphasizes that any material connection between a brand and an endorser must be clearly disclosed. This includes paid partnerships, free products, or any form of compensation. Disclosures must be “clear and conspicuous,” meaning they should be easily noticeable and understandable by the average consumer.

Superimposing larger text disclosures directly over images, such as #ad, is essential for compliance. Relying solely on text descriptions in captions is insufficient due to the small print and competing elements within the images.

The FTC states, "If the picture on an Instagram post conveys an endorsement without the viewer having to read the accompanying description and a significant minority of viewers don’t read the description, a disclosure in the description could be inadequate. You might need a disclosure superimposed over the picture."

UGC Videos:

Combined Disclosures:

For video content, Creators should combine visual and verbal disclosure at the start of the video.

The FTC states, "As the Endorsement Guides say, if the endorsement is made through visual means, the disclosure should be made at least visually. If the representation is made audibly, the disclosure should be made at least audibly. And if the representation is made through both visual and audible means, the disclosure should be made both visually and audibly. A disclosure presented simultaneously in both the visual and audible portions of an ad is more likely to be clear and conspicuous."

Can you put the disclosure in the ad copy or post description?

According to the guidelines, this may not be conspicuous enough for their requirements. I say may, because many things in this guide are vague.

The FTC states, "The text description on TikTok is in small print, it doesn’t stand out, and it often doesn’t contrast against the background of the video. Also, TikTok videos often have many competing elements. A disclosure in the text description is thus very unlikely to be clear and conspicuous. When content creators want viewers to read something, they superimpose much larger text over their videos."

Does the disclosure have to be at the beginning of the video?

Once again, this is where the guidelines are.... vague. The FTC states, "We’re not necessarily saying that, if you use a disclosure like “#ad,” you have to put it at the beginning of a post. The FTC doesn’t dictate where you have to place the disclosure. The issue for us is whether the disclosure is easily noticeable, easily understandable, and hard to miss by ordinary consumer. A disclosure in the middle or at the end of a post is easier to miss and thus less likely to be effective. That’s particularly true if it’s at the end of a long post or mixed in with links or other hashtags."

Proposed Next Steps for Compliance

Should you modify any existing UGC ads or leave them running? Ultimately, that is a decision you should make after consulting with a legal professional.

Looking ahead, I recommend incorporating this disclosure in future UGC briefs, and clearly communicating its importance with Creators.

Keep your eyes on Meta Ad Library or tools like Foreplay.co to monitor the ad library of major DTC brands to see what movements they make with their UGC creatives, and follow legal thought leaders like Rob Freund for day-to-day updates on legal cases that may unfold based on the new guidelines.

Conclusion

The FTC’s latest updates to UGC and digital advertising guidelines are a call to action for brands, influencers, and agencies to prioritize transparency and authenticity in their marketing efforts. By implementing clear and conspicuous disclosures, fostering honest partnerships, and maintaining rigorous compliance practices, you can protect your brand’s reputation and build trust with your audience.

I encourage all brands and agencies to review their current UGC strategies and make the necessary adjustments to align with the new FTC guidelines. Our agency is here to support you in navigating these UGC ad changes effectively, ensuring that your marketing campaigns remain compliant, impactful, and trustworthy.

Additional Resources:

• Link to Full FTC Announcement: FTC UGC Guidelines Update

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