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In creator marketing, loose disclosures are finally catching up
In creator marketing, disclosure has long been treated as optional by some influencers. Now, that loose approach may be catching up with them.
A wave of lawsuits and watchdog scrutiny is digging into undisclosed or poorly labelled posts — and agencies are taking note.
FTC guidelines for sponsored posts have been in place for years, aiming to ensure transparency and protect consumers from misleading advertising. The guidelines were updated in 2023 partly to reflect the rise of creators as key players in digital advertising. They explicitly call out platforms like TikTok and Instagram, where creators have a more informal and direct connection with followers. Failure to disclose paid relationships on these platforms can result in fines of over $50,000 for each individual violation, with the liability largely falling on the advertisers.
After updating its guidelines, the FTC sent warning letters in late 2023 and early 2024 to trade groups and influencers over misleading sponsored content. Now, in 2025, watchdogs and litigious consumers are picking up where the agency left off.
Over the past few months, at least six companies, including retailer Revolve, have faced class-action lawsuits seeking millions in damages over undisclosed paid influencer posts. (An FTC representative did not respond to a request for comment.)
“If you’re going to advertise for a product, and you’re going to do it in a way that feels organic, you just have to make sure that you are making clear to the consumer that you are being paid to do this,” said Jesse Saivar, an IP lawyer at the firm Greenberg Glusker. “The guidelines have a lot of information, but ultimately, they’re just guidelines to give people a better understanding of how to best make that connection clear.”
Due to the widespread nature of creators’ FTC disclosure violations, there are no hard numbers regarding the rise or overall amount of undisclosed brand deals. But both creators and marketers said that they had observed a recent and significant uptick in this activity across both genres and platforms.
“The hard part about FTC disclosures is that they can give the impression of brand-deal oversaturation. It’s not always the cleanest look when every few videos carry an ad tag, which can affect how creators are perceived,” said James Brownstein, the founder of the influencer marketing strategy firm Poster Child. “But while the aesthetic might feel damaging, disclosures are actually a sign of a sustainable creator economy. We need more fan communities to rally around content with proper disclosures because brand deals are what keep creators creating.”
Why creators are flouting disclosure rules
Creators vary wildly in how transparently they disclose paid partnerships to their audiences. Many creators, such as Culture Crave owner and operator Zach Williamson, want to disclose their partnerships, both to avoid FTC fines and to signal to their audience and other prospective partners that they are open for business. But some creators believe disclosing paid partnerships could hurt their audience image, so they flout the guidelines entirely, according to one influencer marketer familiar with the practice, who spoke to Digiday on background to preserve professional relationships.
“The reasoning is that the algorithm punishes the content when it’s disclosed — which is why we just include amplification on everything,” said Danielle Wiley, the CEO of the influencer marketing agency Sway Group, who said that she had required all of her creators to disclose their paid partnerships even before the FTC updated its guidelines. “You just can’t rely on organic, and that’s the name of the game. I don’t think the solution to that is to get around it.”
Some creators are skipping FTC-mandated disclosures because they believe labeling posts as paid ads leads to algorithmic suppression by platforms. Talent managers Gaylen Malone and Courtney Bagy Lupilin both said that their creators had started to charge higher rates for sponsored posts on platforms where they’re trying to grow their presence, due to the cooling effect that paid content can have on overall engagement, both sponsored and organic.
“If a creator is like, ‘I would do it, but that TikTok is not going to perform well, and I’ve been working on my TikTok,’ then with that context, I can take it back to the brand and say we’ll have to do a little bit higher of a rate to make it worth it,” Malone said. “Statistically, viewership goes on a decline for even their non-sponsored posts for a period of time afterwards.”
Due to the open-ended nature of the FTC’s disclosure guidelines, many creators, such as Culture Crave’s Williamson, have experimented with different language to balance between disclosing and avoiding making paid relationships obvious in a way that turns off viewers. Williamson’s current approach is to denote paid posts by tagging the sponsor alongside a handshake emoji in the copy.
“I pitch it to companies who want it undisclosed: ‘What if we do an emoji?’ Williamson said. “And they’re like, ‘that sounds good.’ So, I don’t think it’s a big thing that they’re worried about.”
Jeremy Whitt, executive media director at the full-service agency Hanson Dodge, said that he had observed a recent uptick in undisclosed paid posts from creators concerned over disclosures hurting their posts’ performance, but that working with creators who disclosed their deals transparently was a “non-negotiable” for his buyers.
“It’s just not worth cutting corners when brand trust and platform integrity are on the line,” he said. We’re not interested in any potential repercussions due to the shared liability the brand has with the creator.”
Groundswell of challenges against undisclosed influencer ads
Creator marketing is booming in 2025, with advertisers like Unilever significantly growing their investment. But for those who don’t adhere to transparent disclosure guidelines, scrutiny is tightening.
On July 17, for example, soap company Dr. Squatch discontinued some of its paid creator posts on TikTok after a challenge by BBB National Programs’ National Advertising Division showed that the company was offering creators incentives and additional rewards beyond standard affiliate links, which sponsored creators were not disclosing in their paid posts. National Advertising Division vp Phyllis Marcus told Digiday that her organization’s actions were only part of a broader groundswell of challenges against undisclosed influencer ads that also include a wave of class action lawsuits aimed at misleading creator marketing in 2025.
“You’ve got a lot of regulatory, and in our case, self-regulatory, oversight in this area,” Marcus said. “A lot of eyes on it, and a lot of cops on the beat.”
Creator Lindsey Gamble agreed that regulatory scrutiny of influencer marketing is increasing, but said that he did not anticipate a major crackdown against the majority of creators. If and when the FTC decides to turn more attention to the disclosure issue, he said, the agency is likely to focus its early efforts on the largest and most attention-grabbing brands and creators.
“A few years ago, the FTC probably had better things to do. I still don’t think they’ll really crack down on the average creator — unless it’s related to something in the financial space or the health space, where it can be more sensitive,” Gamble said. “For the most part, I imagine most creators are going to get away with it, but it’s a risky business.”
https://digiday.com/?p=583983
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