Federal Trade Commission’s Revised Endorsement Guides
You’re reviewing your company’s P&L statement and see a write-off for some of your products and walk down the hallway to talk to the marketing director to find out what it was for. You soon learn that some promotional items were provided to bloggers as an in-kind exchange for them to write favorably about your company and services you provide. If this sounds familiar, you may be in violation of the Federal Trade Commission’s revised Endorsement Guides to reflect changes in marketing and media since the Guides were last issued in 1980.
We’ve all seen those commercials with Jessica Simpson endorsing a certain skin care solution…haven’t you wondered if she was being paid to say those things or if she actually believes in the product? The general rule of thumb still applies to the FTC’s Guides: Endorsements must be an honest reflection of the endorser’s opinion or experience. If there is compensation involved between the product and the endorser, they need to be disclosed.
With the wave of social media and opinions of popular bloggers replacing traditional forms of advertising, some of the new FTC revisions are addressing this. So what are some things to ensure you’re in compliance? Here are some examples:
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Bloggers who receive some type of compensation, whether it’s monetary or through free products in order to promote the advertiser’s goods, must disclose their relationship. In other words, anything that may affect the credibility of the review in the eyes of the consumers should be clearly stated.
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Previously, the Guides stated that if results were not typical, it needed to be indicated within the ad. Flashback to diet pill commercials where a before and after shot was shown and it made the consumer think that they could lose a hundred pounds just by taking some medication. Ever noticed the little disclaimer on the bottom of the picture stating, “Results Not Typical”? That’s no longer needed.
The Guides are merely administrative interpretations of the law intended to help advertisers comply with the FTC Act. The FTC wants to ensure there are no deceptive forms of advertising. They’re so adamant, in fact, that the FTC stopped some internet advertisers that were falsely promoting products that were deceptively claiming that consumers would lose weight and the company must now pay $1.5 Million to settle charges, in addition to surrendering corporate and personal assets. If you thought the FTC was just being kind by publishing the guidelines, think again. There may be some extreme penalties imposed by misleading consumers.
This has been written with no compensation received from the FTC.
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This article is for information purposes only. It is not intended to be and should not be relied on as legal advice for any particular matter.