When creators/influencers post any sponsored content, the Federal Trade Commission (FTC) requires that they clearly disclose any material connection they have with the brands they promote. This means if a creator is getting paid, receiving free products, or earning commissions, the creator’s followers need to know about it before they watch the content or make purchasing decisions. Many social media platforms offer a “branded content tool” (or something similar) which is supposed to disclose to the consumer that the content they are watching is branded content. It has been a lingering question whether that branded content tool offers a disclosure that is “clear and conspicuous”, i.e. sufficient to disclose the creator’s material connection to the brand. According to a recent decision from the National Advertising Division (NAD), the answer is a resounding no. The U.S. advertising industry founded the National Advertising Division (NAD) and the National Advertising Review Board in 1971 as a system of independent industry self-regulation to build consumer trust in advertising and support fair competition in the marketplace.
In October 2025, the NAD issued a decision in a case brought by Niagen Bioscience against competitor Reus Research LLC (Reus) regarding certain supplement products. While the case dealt with various advertising claims, one key issue was the adequacy of TikTok’s disclosure tools. Reus had been working with influencers to promote their products on TikTok. Some of these influencers included links to the TikTok Shop where viewers could purchase the products, and TikTok’s built-in disclosure tool displayed “Creator earns commission” at the bottom left of the videos. Reus argued that this was sufficient disclosure because consumers would understand from the TikTok Shop link that the influencer had a material connection to the seller and was receiving a benefit.
In NAD’s decision, they found that TikTok’s built-in disclosure tool was inadequate for several reasons. First, the “Creator earns commission” label appears in a relatively small font at the bottom left portion of videos, and it can be easily missed by viewers scrolling through their feeds. Second, simply including a TikTok store link doesn’t itself disclose a material connection between the influencer and the brand. The NAD made it clear that the influencers in this case needed to include disclosures conspicuously and directly in the audio and visual portions of their videos in order to meet FTC guidelines.
While brands have a responsibility to ensure their influencers are making proper disclosures, the FTC can take action against both the brand and the influencer. When in doubt, it is prudent for creators to over-disclose rather than under-disclose as it is better to be overly transparent than to face potential FTC enforcement action. If a creator is earning money or receiving products in exchange for posting content, it should be made clear to the creator’s audience. Platform-specific disclosure tools might be helpful, but they are not sufficient on their own to meet FTC requirements.
