In the last installment of this column, I provided you with a list of questions to ask yourself about any potential interaction with any influencers. The point is to size up the person and ensure your points of view and interests align. Out of all the factors I’ve discussed, what I’m about to share might end up being even more important than sizing up the influencer, because it can cost you money.

This time, we will take a look at some of the ethical and legal issues you must consider when interacting with influencers. You’ll find them on any social media platform, be it Instagram, Facebook, TikTok or Twitter. Your business will also run across bloggers as well as regular posters on various forums or FaceBook and Reddit groups. Generally, they want to showcase your product or service.

If you decide to work with an influencer and offer them a product to evaluate, they should disclose this in their content (post, video, etc). If you pay them to discuss your product, they must disclose this. They don’t have to get into detail, but they need to mention that they were paid to create the content. This is for the sake of the viewer, the creator, and you, the business owner. 

There are both ethical and legal reasons to do this. From a legal standpoint, the Federal Trade Commissions “Guides Concerning the Use of Endorsements and Testimonials in Advertising” pertain to “endorsements,” and those who fail to disclose any compensation for endorsements may be investigated for deceptive practices and face fines. 

Fortunately, those who have been at this for a while are well aware of any ethical and legal issues that pertain to their activities. Most of the professionals are handled by agencies and know this. It’s the part-timers and those new to the business that may not understand how things work ethically and legally. 

Failing to disclose any business ties is considered covert advertising and it is illegal, not only in the U.S., but in many other countries as well. 

To further explain, social media influencers are the modern-day equivalent of a celebrity endorsement. Some of you will recall these from your youth, but you’ll still see Pat Boone and other stars of yesteryear in commercials for this product or that on late night TV. What you may not notice is that somewhere in that commercial are words to the effect that it is a “paid celebrity endorsement.” This lets the viewer know that as sincere as the star may seem, they are being paid to say what they’re saying. The same rules go with social media. Please note that this isn’t always happening. Inevitably, there will be a crackdown. There always is. Even if someone isn’t fined for such behavior, deception is still a serious ethical problem. Customers will figure it out and won’t be happy.

Make sure the influencer understands this ethical and legal standard. It’s best to be upfront about the relationship. One way to deal with this is to have the influencer overtly display your logo on their content and acknowledge that the content is sponsored. Have them include a link to you and make sure they disclose if it is an affiliate relationship, meaning a portion of any sales go to the influencer. Alternatively, if you provide a free product for the content, but no monetary support, they should acknowledge that as well. These are remarkably simple steps which will keep both you and the influencer out of trouble. The point is to inform the consumer so they can form an opinion free from hidden influence.

The groundwork for establishing a rewarding relationship with any influencer is when you are sizing them up using the techniques discussed in part one. I can’t stress this enough: Make sure any influencers you interact with share your values. That will mitigate most of any risk you might face. Consider, if they create a negative incident, it can reflect on your company just as easily as it does on the influencer. The internet rushes to guilt by association, and incidents have recently become more common.

In the event that a negative situation occurs, by all means, get to the bottom of it. Do not allow an incident to fester or gain momentum as it goes viral. Quickly, but not rashly, determine how you will proceed. Inform your staff, the influencer and the public. Be truthful and sincere in any statements you issue. Address comments directed toward your company on social media channels that are untrue, and provide correct information. Stick to your guns. Finally, don’t be afraid to remove comments and ban commenters that are toxic. Your employees and loyal customers don’t deserve it, and neither do you.

I said it last time and I’ll say it again. There’s a lot of good that can come from working with an influencer. Just make sure that your business and the influencer are the right fit for one another.