A stunningly large swath of the travel industry may be legally on thin ice, putting themselves and their companies at risk because of postings by influencers on social media, websites, and blogs, according to the Federal Trade Commission (FTC). There could be ramifications for travel agents who use post-trip reviews on their website or social media, as well.
The issue was highlighted in April 2017, when the FTC announced it had sent 90 letters to high-profile influencers that they “should clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media.” It followed up in September with 21 more letters, so over the past 18 months, staying on the right side of the law has been getting a good deal of attention in the advertising and marketing trades. Travel is thought to be the third largest industry where influencers play a major role, behind only health/beauty and fashion. It’s also an industry where the stakes are high, with consumers paying thousands of dollars and spending something they can’t get back – their vacation time.
Travel Market Report spoke with a variety of marketing specialists, lawyers, suppliers, agents, and the FTC about what this means for agents. However, much of what we are covering is applicable to supplier engagements with influencers, something that has become a staple of their marketing.
The FTC guidelines come into play locally, as well. Right now, in California, there is a lawsuit seeking at least $2 million against a private jet provider — but the same situation could occur with a hotel, cruise line, tourist board or even an agent. In this case, the plaintiff’s complaint includes social media posts by Kim Kardashian, Petra Nemcova, Fergie, and JetSmarter (which is the target of the lawsuit).
None of the posts “clearly, conspicuously, or in any other manner disclosed the financial relationship between them in their Instagram posts. JetSmarter’s advertisements are unfair, unlawful, deceptive, and misleading, and have violated and continue to violate state and federal laws and regulations, including California’s False Advertising Law, Cal. Bus. & Prof. Code § 17500, Section 5 of the FTC Act, 15 U.S.C. § 45, and the FTC Guides Concerning Endorsements, 16 C.F.R. § 255.5,” the complaint reads. By the way, since the lawsuit was filed, Kardashian apparently went back to mark posts that were cited as #Ad.
While it’s a lot to take in, the good news is that protecting yourself and your company is easy, costs nothing, won’t impact the effectiveness of your blog or social media, and some believe will actually enhance it.
Do you have a material relationship?
If you say, I’m a travel agent, not an influencer, let me stop you. The FTC and others we talked to see you as the ultimate influencer since you are a professional expert. So, let’s get into the details. When you look to the FTC, one of the two important tests in deciding whether or not social media posts or blogs require disclosure is if there is a “material” connection between you and the supplier, which by the way, is not limited to payments or free product, including stays, as is common with professional influencers.
When it relates to you, the travel agent, it could be because you stay in an $800 room for $100, or when you visit and pay $800 you are upgraded to the Presidential Suite. It could also be that you are invited to an advisory board meeting where your stay is covered by the host hotel or cruise line. You may believe because you are providing your professional advice to that hotel, hotel group, cruise line or destination, you are exempt. And if you don’t plan to write about it on your website or post on social media, you are OK, since you are not promoting it.
If you are posting and blogging from the cruise or resort with images or articles about the great pool, fantastic kid’s club or whatever, you should disclose you stayed for free or that suite came via an upgrade.
But wait, there’s more.
Maybe you paid for the hotel, but they gifted you a dinner at their 5-star restaurant or a spa treatment. If you post about how great the spa is without disclosing your mud bath was free, that very well could be a violation when it comes to the FTC. A reader might have viewed your posts or report on the spa treatment differently if they knew you received it for free. That might not matter unless they visited the hotel because they wanted that treatment and felt that whatever you said in some way misled them. Attorneys say that while the litigation naming you will take place at a local level, like in the JetSmarter case, the plaintiff’s attorney will argue the FTC guidelines reinforce local statutes to give their claim against you more weight.
Most people know I get freebies, discounts and upgrades
You may say, “I am a travel agent. Virtually anyone who sees my posts or reads my blog knows I get free stays, deeply discounted trips and upgrades to the best suites.” This leads us to the second, and equally important, point to consider.
According to the FTC, “The issue is – and always has been – whether the audience understands the reviewer’s relationship to the company whose products are being recommended. If the audience understands the relationship, a disclosure isn’t needed.”
Michael Ostheimer, a senior FTC attorney, says if a significant portion of your audience doesn’t know about your material relationship, you need to disclose it. What’s a significant percentage? That’s gray area, but it may be less than you think, and you won’t really know until you get named in some type of legal action.
Ostheimer notes somebody who is not your client could see your post or read your blog, and based on your positive review, book directly with the supplier. A lawyer we talked to says If the person had a problem they couldn’t resolve with the supplier, they might then file a lawsuit alleging that they did not know or understand you had a material relationship, citing your musings or snapshots as one of the reasons they were induced to purchase. If the FTC or a court decides, by knowing you got a discount, upgrade or freebie, it would have given different weight to your review, you will have a problem.
As you think about what you need to disclose, if you are paying a rate that is available to all or most agents, and you didn’t receive any additional perks, you may be OK, but it’s a gray area. Because you are an agent with a specific company, consortia or supplier preferred program, if you are receiving extra consideration during your stay, because of those relationships, you should disclose.
Put things in writing
You probably should consider working with your attorney to develop a written policy using FTC guidelines. Attorneys Allison Fitzpatrick and Michael Lasky, of Davis & Gilbert, LLC, both specialize in the legal aspects of social media and influencer marketing – and remember, you are an influencer. They say there are ways to make it clear to readers there is a material relationship without using #Ad at the top of the post.
Ostheimer says, whatever you do, make sure it’s not ambiguous. For example, “Thank you, Hotel X, for inviting me to preview this fantastic resort” is probably not enough. The FTC says you also need to take reasonable steps to instruct both employees and any influencers you might hire.
Mathew Evins, chairman and co-founder of Evins Communications, which contracts influencers on behalf its clients, says providing FTC guidelines should be a basic step. In working with influencers, the agency requires the ability to review and approve any posts and also monitors influencers after the fact. The FTC attorney says, in terms of your employees, reasonable efforts most likely suffice. Providing them with the guidelines and having a written acknowledgement that they read and understand would be a natural place to start.
Disclosure has its benefits
Lawyers and social media experts say disclosure can positively impact the effectiveness of your blog or postings by giving you additional credibility, particularly against many others who are less than upfront about any deals related to what they are promoting. The fact that you only post or blog about companies you recommend and believe in doesn’t matter.
Do you need to hire an attorney to comply?
The FTC says no, if you are going to be clear about disclosing and take the view that there could be a sufficient number of readers or viewers who may not know you only paid $500 for that $5,000 suite, stayed gratis or received the mud bath at the spa for free. “What matters is effective communication,” say the bureau’s guidelines, continuing, “A disclosure like ‘Company X gave me [name of product], and I think it’s great’ gives your readers the information they need. Or, at the start of a short video, you might say, ‘The products I’m going to use in this video were given to me by their manufacturers.’ That gives the necessary heads-up to your viewers.” Also make sure it appears when scrolling on mobile devices where you sometimes only see a few words of a post.
You’re not alone
A watch retailer, who is hosted on a trip to visit the manufacturer’s workshop in Switzerland to get trained about new product and see how it’s being made, would have to disclose that they got a free trip (even if they didn’t get a free watch), if they decided to share on social media or blog about it. A camera store owner or employee who receives free lenses to test again would have to disclose that fact, if they chose to publicize it on social media or through articles on their website. The same holds true for a makeup artist who gets free product, again, if they use social media or their website to post reviews. By the way, if you get a free stay or you pay and then get upgrade to an amazing and more costly suite, it’s not an issue unless as long as you are not publicizing it via social media or your website. Of course, then you wouldn’t get the benefit of showing off to readers and followers.
Perhaps you have grounds to ignore this, if you decide that an insignificant percentage of your audience doesn’t understand you have material relationships with entities you are writing or posting about, and that if they knew you received consideration for a specific story or post, that would not have changed how they weighted your recommendation. If you don’t want to dance in the gray areas, you can err on the side of caution. Either way, we recommend you read the FTC’s guidance here.
You may come to different conclusions, or you may view your risks as being so small that you want to play the odds. Before you do, read Part Two tomorrow. Travel Market Report contributor and travel industry legal expert Paul Ruden reviews seven specific scenarios that involve suppliers, influencers and agents, and gives you his take on who should worry about what they are doing and how to mitigate exposure.