New FTC Guidelines On Endorsements and Testimonials

The Federal Trade Commission has just released guidelines (pdf) concerning the use of endorsements and testimonials in advertising, including Internet ads.

Here are a few excerpts:

“Endorsements must reflect the honest opinions, findings, beliefs, or experience of the endorser.”

“Advertisers are subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose material connections between themselves and their endorsers”

“If the advertiser does not have substantiation that the endorser’s experience is representative of what consumers will generally achieve, the advertisement should clearly and conspicuously disclose the generally expected performance in the depicted circumstances, and the advertiser must possess and rely on adequate substantiation for that representation.”

In the last quote the FTC is trying to quash the “Results not typical” or “Results may vary” caveat that some advertisers use. The FTC says you should include what typical results really are. It goes on in an example about a weight-loss product:

…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

The guidelines contain a ton of examples and hypothetical situations and covers customer, expert and organizational endorsements.

There’s also a section on “disclosure of material connections”. In it they say that bloggers and tweeters who are paid to endorse a product should state that in any post that recommends the product.

In addition, if you are endorsing a product that you received from the company for free you should state that, also. Not only that, the FTC says if you are the one giving a product to a blogger for free for an evaluation, you “should have procedures in place to try to monitor his postings for
compliance”.

The Interactive Advertising Bureau (IAB) has a little heartburn over that last part, stating that the FTC guidelines “would explicitly muzzle online media, while exempting offline media from equivalent scrutiny or penalty”.

They maintain that a newspaper or TV staffer can review a product they received for free and not reveal that fact but a blogger must under the new guidelines and called on the FTC to rescind them.

Good luck with that.

Another thing… it’s kind of vague, but I get the impression that you would be responsible for all of your affiliates. If they make outlandish claims, you would be held responsible.

I realize that the FTC is trying to put the truth back into “truth in advertising”, I just wish they would be a little more clear than what’s provided in the latest guide.

Further reading:
FTC’s New Endorsement Guidelines: 6 Key Areas to Examine> Marketing Sherpa.com