The Influencer Factor: Legal Risks and Disclosure Issues in Social Media Giveaways

Part 2 of a four-part series. In Part 1, we discussed the slippery slope that can result when automated marketing turns into promotion administration.

Influencer marketing has become one of the most common ways brands promote giveaways. The challenge is that many influencer posts are created quickly, often without legal review, and promotions are frequently described informally.

Common examples include:

• “Follow, like, and tag three friends to enter”
• “Subscribers only”
• “Join my paid community for bonus entries”

These types of instructions may appear harmless, but they can raise multiple compliance issues at the state and federal level…not to mention what happens if an entrant realizes a promotion law has been violated.

First, promotions must be clearly identified as sweepstakes or contests and must disclose key terms. Second, eligibility restrictions, geographic limitations, and end dates must be communicated accurately. Third, certain entry requirements may create legal consideration if participation requires any payment, purchase, or a substantial investment of time or effort by the entrant as a condition of entry.

There is also a disclosure issue. Influencers must clearly disclose their relationship with the sponsoring brand. If the influencer appears to be running a personal giveaway but is actually acting on behalf of a company, regulators may view the promotion as misleading advertising. The Federal Trade Commission (FTC) has very detailed guidelines for influencers that must be followed. In the following example, you will see that the influencer states the partnership with the brand up front and that a sweepstakes specific hashtag is part of the entry requirement. Both of these elements abide by the FTC guidelines. The addition of the short rules (aka disclaimer) also follow industry best practices. 

🎉 GIVEAWAY TIME! 🎉

I’ve teamed up with @BrandName to give 3 lucky followers the ultimate prize bundle! 🎁How to enter:

1️⃣ Follow me (@InfluencerHandle) and @BrandName.

2️⃣ Like this post.

3️⃣ Tag a friend in the comments who would love this along with this hashtag: #BrandNameSweepstakes! (Each comment = 1 entry, so tag away!).✨ Bonus entry: Share this post on your story! Winner announced on [Date]! Good luck! 🍀 #ad

No purchase necessary. Void where prohibited. 18+, US residents. Ends 1/1/26. Prize restrictions apply. Rules at link in bio. 

The important point is that the brand remains responsible, even if the influencer posts the promotion.

In Part 3, we’ll discuss the pros and cons of AI-generated content and virtual promotional hosts. Stick around!