Over the summer, I wrote about an NAD case initiated by P&G against Dr. Squatch, challenging a number of posts on TikTok. The posts in question featured individuals who participated in the TikTok Shop affiliate program where creators and influencers earn a commission on sales of Dr. Squatch products made through their affiliate links. These posts included a disclosure stating “creator earns commission.”  P&G challenged the ads, arguing that the influencers should have also disclosed their participation in Dr Squatch’s reward program, where they could earn rewards and prizes in addition to affiliate commissions.  Dr. Squatch voluntarily discontinued the ads, so NAD didn’t rule on the merits or weigh in on whether double material connection disclosures would be necessary in these circumstances.  (That did not stop me from blogging about the case, though, and putting in my two cents on the issue.  Read it if you want to know where I came out.)

Now, we have a little more insight and guidance as to NAD’s POV on this issue.  Once again, P&G challenged a competitor for its influencer posts on TikTok Shop.  Again, the influencers’ posts included the “creator earns commission” disclosure required by TikTok. But the influencers did not separately disclose other types of material connections to the advertiser, Blueland. Three scenarios were at issue and they were addressed separately.

First, Blueland advised NAD that there were four creators who may have received additional compensation based on other partnerships with Blueland separate from their participation in the TikTok Shop affiliate program. As to those creators, Blueland said that it would request that these four creators either permanently take the posts down or amend them to include additional disclosure regarding the creators’ partnership with Blueland. 

By contrast, with respect to other creators in the affiliate program, Blueland indicated that those creators were only sent free products for the purpose of promoting the products on the TikTok Shop. Blueland argued that sending these “starter” products to influencers did not create a separate disclosable connection because consumers understand from the “creator earns commission” that there is a financial connection between the influencer and company.  Further, Blueland argued, the value of the free starter set of detergent or soap (priced between $10-$25) is “insignificant.”

Whether or not NAD agreed that the value of the starter set was insignificant, it did agree that, in these circumstances, the “creator earns commission” disclosure alone sufficiently informs consumers that a commercial relationship exists between the creators and Blueland. NAD stated that “[b]y disclosing that the endorser stands to earn money based on sales of the product, consumers are likely to understand the impact this material connection may have on the creator’s endorsement of the product.” In addition, NAD continued, an additional disclosure to communicate specifically that the creator received a free starter set for the purposes of promoting the product “likely would not enhance consumers’ understanding of the nature of the relationship between the creator and the brand such that the weight or credibility of the endorsement would be affected.” Thus, no double disclosure was needed in this instance.  However, NAD added in a footnote that “where more valuable products or other benefits are given to the creator, such as in the cases of the four creators noted above or in any such similar cases, additional disclosures may be appropriate.”

Finally, as to posts by three “prominent influencers,” Blueland represented that it did not have any past or present relationship with these influencers. Thus, as to their challenged posts, NAD determined that it did not have jurisdiction to review them on the merits because they were not “controlled by the advertiser,” and therefore not “national advertising” subject to NAD review. 

So how do you know when a double disclosure is needed?  The real question is whether the single disclosure – whatever it is – conveys the influencer’s bias sufficiently so that followers can evaluate the endorsement.  Telling followers that the influencer earns commissions from sales of the product is already telling them that there is some bias: obviously the influencer earning affiliate commissions wants to generate sales so is going to praise the product.  But the bigger the additional inducement the influencer receives from the advertiser, the more regulators – and NAD – will want to see an extra disclosure.  It lets the followers know that they really need to evaluate the credibility of the  endorsement.  Of course, the FTC’s Endorsement Guides prohibit (among other things) any endorsement that doesn’t represent the endorser’s actual experience and truthful opinion.  But influencers receiving significant benefits beyond affiliate commissions should let their followers know that so consumers can view the content with, well, a critical eye.