FTC Guidelines Address Bloggers

October 22, 2009

The Federal Trade Commission has published a guide concerning the use of endorsements and testimonials in advertising.  The FTC guidelines become effective December 1, 2009. As expected, the FTC has addressed nontraditional advertising outlets such as blogs and new social media.

The FTC states that bloggers and their blogs come under FTC guidelines and that they must conform to FTC regulations. Bloggers may be considered endorsers if they review products and publish their opinions on those products. A blogger may be under a duty to disclose whether she has received a product by a supplier or advertiser if there are “material connections“  between the blogger and the advertiser.

What is a material connection? The FTC does not state exactly, and the FTC will decide this on a case by case basis.  The FTC however, has stated that if a supplier has given a blogger one item one time to review, then that is probably not enough to make a material connection. Of course, if the supplier has given the blogger something of substantial value, that may be enough to make a material connection.  (Think car or X-Box.)

On the other hand, if the supplier supplies the blogger with a steady stream of goods on a regular basis, even if those goods are not worth much money, there is probably a material connection.

What does this mean for bloggers if a material connection has been made? It means that the blogger must disclose the fact that she has received goods from the supplier for free.

These necessary disclosures do not apply to professional brick-and-mortar organizations that publish reviews as part of its business. For example, a newspaper with a weekly review section where one of its employees reviews goods does not fall under this section. The reason for this is that the newspaper is deemed not to benefit even if the advertiser supplies the paper with the goods to be reviewed.

So what is an endorsment?  According to the Guidelines:

An endorsement means any advertising messaging, (including verbal statements, demonstration, depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or a seal of an organization) that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser.

This would seem to include endorsers who advertise clothing, shoes, sporting equipment, and other items in a commercial without stating a word about the goods that are being used.  This would seem to not include events in which the advertiser is not trying to sell a product.

 For example, a televised golfing event where Tiger Woods is wearing a Nike hat and a Nike shirt but is making no claims about the hat or the shirt and Nike is not advertising in the televised event would not require disclosure.

But a Nike commercial that never says the word “Nike” but shows Tiger silently doing his thing in Nike apparel is a different story.

Other provisions of the Guidelines reinforce the older Guidelines. An endorser famous or not, must be honest in his opinion. But sometimes honesty is not enough. As in the previous post about the weight loss product, strict honesty is sometimes misleading.  A non-celebrity endorser may have a higher standard in disclosure than a celebrity endorser. A mother-blogger who, for a living, reviews baby products regularly from a certain advertiser must disclose that she gets paid by the advertiser. In a social marketing network scheme, the participants will also have to disclose that they are being supplied with goods by the advertiser.

Such a simple thing, disclosure, and it only makes sense, though bloggers probably won’t agree with me. I am of the opinion that disclosure can only mean greater credibility for the blogger and the product.  

The examples, comment, and discussion of the Guidelines go deeper than this modest blogpost can do within 700 words.  A modest summary, however, is possible:

If you say it, you’re responsible for it.  If you cause it to be said, you’re responsible for it.  If you mislead, you are responsible for your deception.  If you get paid, you need to say so.

2 Comments | Advertising, business building | Tagged: , | Permalink
Posted by debmcnichol

New FTC Guidelines

October 21, 2009

The blogging world is in a tizzy over the new FTC Guidelines that define what must be disclosed when there is a relationship between the advertiser and an “endorser.”  A “safe harbor” disclaimer is no longer sufficient to satisfy FTC regulations.  More about the technicalities of the new Guidelines in a later post. 

In the interim, the narrative below is from the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising.  The narrative concerns a diet supplement.  The FTC’s rules make perfect sense to me.  Even the most legitimate companies stretch the truth to their sell weight-loss products.  (Does anyone ever pay attention to that “Results not typical” disclaimer at the bottom of a commercial?)

……………..

An advertisement for a weight-loss product features a formerly obese woman. She says in the ad, “Every day, I drank 2 WeightAway shakes, ate only raw vegetables, and exercised vigorously for six hours at the gym. By the end of six months, I had gone from 250 pounds to 140 pounds.”

 The advertisement accurately describes the woman’s experience, and such a result is within the range that would be generally experienced by an extremely overweight individual who consumed WeightAway shakes, only ate raw vegetables, and exercised as the endorser did. Because the endorser clearly describes the limited and truly exceptional circumstances under which she achieved her results, the ad is not likely to convey that consumers who weigh substantially less or use WeightAway under less extreme circumstances will lose 110 pounds in six months.

(If the advertisement simply says that the endorser lost 110 pounds in six months using WeightAway together with diet and exercise, however, this description would not adequately alert consumers to the truly remarkable circumstances leading to her weight loss.)

The advertiser must have substantiation, however, for any performance claims conveyed by the endorsement (e.g., that WeightAway is an effective weight loss product). 

If, in the alternative, the advertisement simply features “before” and “after” pictures of a woman who says “I lost 50 pounds in 6 months with WeightAway,” the ad is likely to convey that her experience is representative of what consumers will generally achieve. Therefore, if consumers cannot generally expect to achieve such results, the ad should clearly and conspicuously disclose what they can expect to lose in the depicted circumstances (e.g., “most women who use WeightAway for six months lose at least 15 pounds”).

If the ad features the same pictures but the testimonialist simply says, “I lost 50 pounds with WeightAway,” and WeightAway users generally do not lose 50 pounds, the ad should disclose what results they do generally achieve (e.g., “most women who use WeightAway lose 15 pounds”).

1 Comment | Advertising | Tagged: , , , , | Permalink
Posted by debmcnichol

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