A step toward compliance: the creator economy addresses disclosure and liability risks

It is launching a creator certification program, through its non-profit foundation the Center for Industry Self-Regulation (CISR), which serves as the organization’s hub for new industry standards. The program, backed by ad associations like ANA, 4A’s, AAF, IBA, ICAS and creator and influencer agencies Billion Dollar Boy, #paid, Linqia, aims to fill the much-needed compliance gap.

What does this mean for creators, the brands that work with them and the consumers influenced by them? A lot, actually. 

Less risk, more reward

The creator economy ad spend is set to rise to nearly $45 billion this year, and with more companies choosing to spread their budgets across the three main tiers of influencers, that means that not every creator will be well-versed in FTC regulations and how to remain compliant with them. 

ALO Yoga and a group of influencers found this out the hard way last summer, when consumer Alina Sulici filed a $150 million lawsuit claiming she was duped by undisclosed paid-for posts. It’s a reminder that creators can’t afford to ignore compliance and standards as the market matures. 

The CISR hopes to change that with its creator certification program through its new Institute for Responsible Influence (launching this spring, fees TBD), which will provide education on regulatory agency requirements, endorsement transparency and best practices. Creators who complete the program will be entered into an official, searchable database – so yes, this could mean that widespread adoption of the IRI’s program could lead to brands pulling away from non certified creators.

“Brands and influencers alike face a lot of exposure legally and financially, if they are not knowledgeable about the laws in this space,” Leah Marshall, vp of Digital and Influencer Marketing at the Association of National Advertisers, told Digiday. “And so we are trying to grow the space in a way that’s legal and meaningful for all the players in the creator marketing ecosystem.”

That ecosystem has grown exponentially within the last few years, and as more platforms adopt monetization models to court influencers. “The creator economy is so vast, much more vast than what we are dealing with in terms of traditional publishers or media,” said Jennifer Santos, program development manager for the IRI. “Now you’re talking about someone who can tomorrow, you know, start posting and consider themselves a creator. That vastness really makes these problems that we’re facing on another scale that we haven’t really seen before.”

Other countries outside of the U.S. have already implemented education and compliance frameworks, like Australia, India, and the European Union. The IRI’s program is “part of a broader trend towards professionalizing the creator economy,” said Santos, and the goal is to help creators understand the risks “before they encounter them.”

Ensuring branded content is clearly labeled will help reinstate consumers’ trust in creators, something the IRI has seen drop dramatically over the last few years. 

BBB National Programs recently conducted research showing that only 5% of consumers who have bought a product based on creator recommendations trust the content, with 30% outright distrusting it. The issue? Disclosure of brand partnerships: 71% of consumers said disclosure increases trust, while 70% have felt misled when sponsorships are hidden. 

It’s not just about content creators adhering to the same kinds of regulations that major media organizations do, but that those creators retain something that has helped them stand out from those same major media orgs: trust.

“Responsible influence has to be at the heart of where the creator economy goes next,” said a spokesperson from influencer marketing agency Billion Dollar Boy. “A clear, trusted certification gives creators a better understanding of what’s expected of them, and it gives brands more confidence in the partners they choose.”

The creator question

This unified certification problem will help creators establish more trust with their audience, while also potentially increasing their chances of getting big brand deals thanks to their inclusion in the IRI’s Certified Creator database. 

Without a clear understanding of the cost of this program, however, there is concern that it could create barriers for smaller creators, making it harder for them to get deals without the certification. When asked about potential barriers, Santos said that the program requires careful design. “That is why we are beginning with a pilot program, working directly with creators to surface any challenges early,” Santos said. “The pilot allows us to work cooperatively with creators to refine the program before it scales.” 

Talent agencies may require creators to get certified before moving forward with them, and could potentially consider paying for that certification themselves to ensure every person they represent is compliant (and easily findable in the database).

But there’s also an aspect of the certification program that Keith Bendes, vp of strategy at influencer marketing platform Linqia, believes is even more enticing for creators: less stringent, unnecessary rules from brands that so often limit the reach of sponsored content. 

“Brands are being overly conservative and doing things that aren’t actually the rules and running the content and marking it so that sponsored content does not perform well,” Bendes explained. “Sponsored content mostly performs worse than organic, ask yourself why? Some of it is because brands are ruining content with over-disclosures, or with things that ruin the experience of the person consuming the content…You don’t have to have a massive ‘hashtag ad’ in the first one second at the top of the screen, but you can still communicate that this is a partnership.”

For creators, the IRI’s certification program, while ensuring that they remain compliant with extensive FTC regulations, may also afford them a little more creative freedom when it comes to future brand deals. 

“I’d argue that the FTC brings gray area into their documentation, and so the program makes it so that there’s no question…it’s a necessary thing beyond a very heavily legal, long document for creators to have a bit more understanding of what the rules are. And the same with the brands,” Bendes said. “It’s easy for brands if creators say, ‘I’m certified….I followed the certification to a T.’ It’s nice that someone else, another body, has gone out of their way to distill this down to what’s simple.”