FTC Guidelines on Endorsements: Analysis of the Examples

by Susan Getgood on November 4, 2009 · 4 comments

in Blog with Integrity,Ethics

As promised here is a brief analysis of the examples that pertain to social media and blogging in the revised FTC Guidelines on Endorsements and Testimonials in Advertising, published on October 5th. These revised guidelines take effect on December 1, 2009. My previous posts have covered the broad  issues under public debate about the guidelines, and I’m not going to revisit that material here.  This is a dive into the examples.

If you have questions about the guidelines, Blog with Integrity is holding a free webinar next Tuesday November 10th at noon featuring special guest Mary Engle, the FTC’s Associate Director for Consumer Protection. She’ll be answering questions submitted by the community; submit yours by Friday November 6th to blogwithintegrity@gmail.com and then join us on the 1oth. She will also take questions live, but the best way to ensure that yours makes the cut is to get it to us in advance.


Example 8 (Section 255.0): A consumer who regularly purchases a particular brand of dog food decides one day to purchase a new, more expensive brand made by the same manufacturer. She writes in her personal blog that the change in diet has made her dog’s fur noticeably softer and shinier, and that in her opinion, the new food definitely is worth the extra money. This posting would not be deemed an endorsement under the Guides.

Assume that rather than purchase the dog food with her own money, the consumer gets it for free because the store routinely tracks her purchases and its computer has generated a coupon for a free trial bag of this new brand. Again, her posting would not be deemed an endorsement under the Guides.

Assume now that the consumer joins a network marketing program under which she periodically receives various products about which she can write reviews if she wants to do so. If she receives a free bag of the new dog food through this program, her positive review would be considered an endorsement under the Guides.

I was thrilled to see this example. It covers three common scenarios under which bloggers might acquire goods, and clearly differentiates among purchase, a mass distribution of samples without any relationship (the supermarket coupon) and a relationship under which a disclosure is required (the marketing program.)  This third scenario is clearly the situation referred to when the FTC’s Mary Engle commented on P&G’s program:

Moreover, Engle said the revised guidelines are aimed at advertisers and marketers, not individual bloggers. She cited a Procter & Gamble campaign called “Vocalpoint,” which provided “400,000 moms” with free products in exchange for endorsements made via blog posts and tweets.

“If these moms are posting about how great Tide is or Febreeze, that wasn’t just because they tried it and they loved it; it’s because they are part of P&G’s marketing campaign and that relationship needs to be disclosed,” said Engle, who also admitted, “We probably could have done a better job of describing the distinctions between people who write blogs about books and the moms who are part of P&G’s team.” (Publishers Weekly)

I think it also applies to pay-per-post and sponsored post programs under which bloggers regularly receive offers as a result of participation in the program.  I also think that mass distributed SWAG bags, regardless of the value of the merchandise, may not be included as there is no specific relationship with the blogger. Am I right? We’ll ask Mary on the 10th.

Example 5 (section 255.1): A skin care products advertiser participates in a blog advertising service. The service matches up advertisers with bloggers who will promote the advertiser’s products on their personal blogs. The advertiser requests that a blogger try a new body lotion and write a review of the product on her blog. Although the advertiser does not make any specific claims about the lotion’s ability to cure skin conditions and the blogger does not ask the advertiser whether there is substantiation for the claim, in her review the blogger writes that the lotion cures eczema and recommends the product to her blog readers who suffer from this condition. The advertiser is subject to liability for misleading or unsubstantiated representations made through the blogger’s endorsement. The blogger also is subject to
liability for misleading or unsubstantiated representations made in the course of her endorsement. The blogger is also liable if she fails to disclose clearly and conspicuously that she is being paid for her services. [See § 255.5.]

In order to limit its potential liability, the advertiser should ensure that the advertising service provides guidance and training to its bloggers concerning the need to ensure that statements they make are truthful and substantiated. The  advertiser should also monitor bloggers who are being paid to promote its products and take steps necessary to halt the  continued publication of deceptive representations when they are discovered.

This example is unchanged from the proposed guidelines. Key points:

For bloggers: Take care in making product claims; stick to your own experience and stay away from highly evocative words like “cure;” educate yourself on the features/benefits of the product; disclose the relationship.

For companies: Make sure you have properly informed bloggers about your product and stay on top of their posts. You need to fix errors asap.

Example 3 (section 255.5 disclosure of material connections) : During an appearance by a well-known professional tennis player on a television talk show, the host comments that the past few months have been the best of her career and during this time she has risen to her highest level ever in the rankings. She responds by attributing the improvement in her game to the fact that she is seeing the ball better than she used to, ever since having laser vision correction surgery at a clinic that she identifies by name. She continues talking about the ease of the procedure, the kindness of the clinic’s doctors, her speedy recovery, and how she can now engage in a variety of activities without glasses, including driving at night. The athlete does not disclose that, even though she does not appear in commercials for the clinic, she has a contractual relationship with it, and her contract pays her for speaking publicly about her surgery when she can do so. Consumers might not realize that a celebrity discussing a medical procedure in a television interview has been paid for doing so, and knowledge of such payments would likely affect the weight or credibility consumers give to the celebrity’s endorsement.

Without a clear and conspicuous disclosure that the athlete has been engaged as a spokesperson for the clinic, this endorsement is likely to be deceptive. Furthermore, if consumers are likely to take away from her story that her experience was typical of those who undergo the same procedure at the clinic, the advertiser must have substantiation for that claim.

Assume that instead of speaking about the clinic in a television interview, the tennis player touts the results of her surgery – mentioning the clinic by name – on a social networking site that allows her fans to read in real time what is happening in her life. Given the nature of the medium in which her endorsement is disseminated, consumers might not realize that she is a paid endorser. Because that information might affect the weight consumers give to her endorsement, her relationship with the clinic should be disclosed.

The bolded section, about the celebrity endorsement on a social networking site, is a new addition to the guidelines. It is important because it extends the disclosure responsibility to celebrities. IMO, this applies to anyone who can be deemed to a celebrity in the mind of the average consumer of the web content. Even web celebrities who are relatively unknown outside the net. If the reader would NOT understand that the review was a paid endorsement, there is an obligation to disclose.

Example 7 (section 255.5 disclosure of material connections): A college student who has earned a reputation as a video game expert maintains a personal weblog or “blog” where he posts entries about his gaming experiences. Readers of his blog frequently seek his opinions about video game hardware and software. As it has done in the past, the manufacturer of a newly released video game system sends the student a free copy of the system and asks him to write about it on his blog. He tests the new gaming system and writes a favorable review. Because his review is disseminated via a form of consumer-generated media in which his relationship to the advertiser is not inherently obvious, readers are unlikely to know that he has received the video game system free of charge in exchange for his review of the product, and given the value of the video game system, this fact likely would materially affect the credibility they attach to his endorsement. Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge. The manufacturer should advise him at the time it provides the gaming system that this connection should be
disclosed, and it should have procedures in place to try to monitor his postings for compliance.

Example 8 (section 255.5 disclosure of material connections): An online message board designated for discussions of new music download technology is frequented by MP3 player enthusiasts. They exchange information about new products, utilities, and the functionality of numerous playback devices. Unbeknownst to the message board community, an employee of a leading playback device manufacturer has been posting messages on the discussion board promoting the manufacturer’s product. Knowledge of this poster’s employment likely would affect the weight or credibility of her
endorsement. Therefore, the poster should clearly and conspicuously disclose her relationship to the manufacturer to members and readers of the message board.

These two examples are unchanged from the preliminary document. The first relates to the reasonable expectation of the reader, the second is about astro-turfing, the practice of not revealing a paid employee relationship with the company. In both cases, disclosure is required so the reasonable person understands that there is a compensated relationship between the reviewer and the company.

As I wrote in last week’s post, I would like to see some additional examples from the FTC covering the difference between bloggers and journalists, and the distinction between personal blogs and those that operate like magazines. Overall, however, I don’t think the FTC did a bad job understanding the social media space.

Certainly a much better job than Congress did about 13 years ago when it mucked about with the Communications Decency Act.

Disclaimer:  Still not a lawyer.

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1 WalesSMjobs (Wales Social Media) November 4, 2009 at 11:59 pm

Twitter Comment

FTC Guidelines on Endorsements: Analysis of the Examples [link to post] #socialmedia #news

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2 intertuber (Irwin Hodenop) November 7, 2009 at 11:08 am

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FTC Guidelines on Endorsements: Analysis of the Examples: [link to post]

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3 Lisa @ Crazy Adventures in Parenting November 9, 2009 at 5:44 pm

I love the examples furnished here, and will pass this along to all those curious about this topic.
.-= Lisa @ Crazy Adventures in Parenting´s last blog ..Old Navy, Gap & Banana Republic 30% off Printable Coupon =-.

4 My Webmaster Tips November 16, 2009 at 5:03 pm

I just don’t understand why there isn’t a set in stone way to disclose different examples for bloggers and web site owners that write about a product or service they are compensated for.

For example,

If I get money from Amazon and I write about one of their products using my affiliate link.

How should I disclose this information on my post or site?
.-= My Webmaster Tips´s last blog ..List of 14 WordPress plugins your blog should have installed =-.

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