New FTC guidelines regarding endorsements and testimonials are now in effect, and if you do any marketing on the Internet, you need to be up to date. The full guidelines can be found here along the right sidebar, but we’ve summarized some of the more Internet-pertinent points below.
1: Advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect.
No more “results not typical” disclaimer. Say a weight loss company had commercials featuring a customer who lost 40 pounds in six weeks. If the average customer loses ten pounds in 20 weeks, that average – the results a consumer could generally expect – should be the new disclaimer.
2. The guidelines add examples to illustrate the long-standing principle that “material connections” between advertisers and endorsers that consumers would not expect – frequently payments or free products — must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers.
If you use bloggers to promote your product, watch out. Specifically, if you use a blogger to review your product and pay in cash or kind, that now counts as an endorsement and must be disclosed as such. Furthermore, should your company use research studies or research organizations that are sponsored by the company, that relationship now needs to be disclosed in advertising.
3: The guidelines “reflect Commission case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement – or for failure to disclose material connections between the advertiser and endorsers. “
That was the FTC talking. In everyday terms, endorsers are just as responsible for false claims as the companies they are endorsing. This new guideline seems aimed at reducing chicanery among Internet marketing mountebanks and rogues. A company is now responsible for false claims made by a paid blogger, a stance that should increase company oversight when it comes to marketing.
4: Celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.
Much like the new regulations for bloggers, it requires the disclosure of any paid relationship between endorser and advertiser. Perhaps most important to note here is that the FTC seems intent on clarifying these relationships regardless of relative fame of the endorser or media format.
At the end of the day, these new regulations should have a positive effect on domestic spam and should make paid relationships between marketer and endorser more transparent… but may – as government action tends to do – make Internet marketing more difficult. We’re not exactly sure what we think yet. It may take a few months to fully adjust – but we’d love to hear what you think.
