What is FTC Disclosure?
Definition + Examples
Definition
FTC disclosure refers to the U.S. Federal Trade Commission's rules requiring that any material connection between a brand and an endorser be clearly and conspicuously disclosed to the audience. A 'material connection' includes payment, free product, discounts, sweepstakes entries, employment, family relationships, or any other arrangement that could affect the credibility of the endorsement. The required disclosure is typically expressed as #ad or #sponsored at the top of a post, before the 'see more' cutoff on platforms that truncate captions.
Why it matters for small businesses
FTC enforcement against brands and creators is real and accelerating. Penalties can include consent orders, fines, and required corrective disclosures. Beyond the legal risk, non-disclosure is a trust risk — audiences that discover undisclosed sponsorship lose trust in both the brand and the creator. For small businesses running any kind of influencer or perk-for-post program, FTC disclosure is non-negotiable. Most modern UGC and influencer platforms auto-inject the required disclosure as a feature.
Examples
Influencer #ad on a TikTok
A creator posts a TikTok promoting a skincare brand they received free product from. The required disclosure is #ad in the first line of the caption — not buried at the bottom, not hidden behind 'see more.'
Perk-for-post program disclosure
A restaurant offers a free dessert in exchange for an Instagram story tagging them. Even though the value is small, FTC rules apply: the story should include #ad or 'thanks to [restaurant] for the free dessert.'
Employee-created content
An employee posts a glowing review of their employer's product. The required disclosure is something like 'I work at [company]' — the employment relationship is itself a material connection.
How to use ftc disclosure in your marketing
- 01Use #ad or #sponsored at the start of every promoted post. 'Thank you' alone is not sufficient.
- 02Make the disclosure visible without expanding the caption. If it gets truncated, it's not adequate.
- 03Match the disclosure to the platform — Instagram, TikTok, YouTube, and X each have specific guidance.
- 04Apply the rule even for small perks. There's no minimum threshold.
- 05Use a platform that auto-injects the disclosure. It removes the compliance burden from the creator and the brand.
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Start freeRelated terms
Influencer marketing is the practice of paying or compensating individuals with engaged social media followings to promote a product, service, or brand to their audience.
User-generated content is any media — photos, videos, reviews, social posts, blog comments, unboxing clips — created by real people rather than by a brand.
A brand ambassador is a long-term advocate for a brand — usually a customer, employee, or hand-selected creator — who consistently represents the brand to their audience across multiple posts, events, or interactions.
Earned media is any publicity a brand receives that it didn't pay for and doesn't directly control.