Mastering Social Media Sponsorships and Contests: An FTC Rules Primer

Mastering Social Media Sponsorships and Contests: An FTC Rules Primer

Mastering Social Media Sponsorships and Contests: An FTC Rules Primer

With over 3.5 billion active social media users globally, social media is undoubtedly a powerful tool for marketing and advertising. It's no wonder businesses, brands, and individuals flock to platforms like Instagram, Facebook, and Twitter to get their message out to the masses. One of the most popular ways to promote a brand or product on social media is through sponsorships and contests. However, it's important to understand the rules and regulations set by the Federal Trade Commission (FTC) to stay compliant and avoid penalties. In this article, we'll dive into the basics of FTC rules for social media sponsorships and contests.

What are social media sponsorships?

Social media sponsorships are collaborations between an influencer or brand and a company or individual looking to promote a product or service. In exchange for compensation, the influencer or brand will create content that features or promotes the sponsor's product or service on their social media channels. This type of sponsorship has become increasingly popular, with estimates of the industry reaching up to $10 billion by 2022.

What are social media contests?

Social media contests are promotions, typically held on platforms like Instagram, Facebook or Twitter, in which participants are asked to perform a specific action in exchange for a chance to win a prize. For example, participants may be asked to post a photo or video on their timeline or follow a specific account. Contests are often used to increase engagement or followers and to create buzz around a product or service.

FTC Guidelines for Social Media Sponsorships and Contests

The FTC has several guidelines that businesses, influencers, and brands must follow when conducting a social media sponsorship or contest. Failing to comply with these guidelines could result in penalties and tarnish the trust and credibility of the brand.

Disclosure Rules

Disclosure rules require that influencers and brands involved in social media sponsorships must disclose any financial compensation, gifts, or free products they receive in exchange for endorsing a product or service. This disclosure must be in a clear and conspicuous way for consumers to understand. For example, using hashtags such as #ad or #sponsored, or clearly stating that the post or video is part of a paid promotion, could ensure that the disclosure is visible and easy to understand.

Contest Rules

Contest rules are also a crucial part of social media marketing. According to the FTC, contests must provide clear contest rules and requirements. These rules should spell out what participants need to do to win, how the winner will be chosen, and how prizes will be awarded. The rules should also be easy to understand and clearly communicated to all participants.

Prize Disclosure

When it comes to contests, FTC rules also require that the value of the prize and the odds of winning must be disclosed. This information should be prominently displayed and easy to find for all participants.

Advertising Disclosures

Finally, advertising disclosures require brands to ensure that their advertising is truthful and not misleading. Brands must not make false or unsubstantiated claims about their products or services. If a brand makes a claim, it must have evidence to back it up. For example, if a product claims to reduce wrinkles, the brand must have clinical trials or other evidence to support the claim.


Social media sponsorships and contests can be an excellent way for brands to promote their products or services to a broader audience. However, if you're not aware of the FTC rules governing this type of marketing, you could find yourself in hot water. Disclosures are critical for transparency and to comply with FTC rules. If you're conducting a social media sponsorship or contest, it's essential to understand the regulations and ensure that your disclosures are specific, clear, and honest. At Socialdraft, we offer a range of prompts to help you plan and execute your social media campaign successfully. Check out our selection, and let us help you take your marketing to the next level!

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