Clicks 'n Conversions Blog

While the rest of us were making holiday plans last December, the Federal Trade Commission adopted their “Guides Concerning Use of Endorsements and Testimonials in Advertising.”

For my first blog entry of 2010, I was hoping I could provide an overview of the changes that impact marketers and copywriters, but alas, with an 81-page document, that goal, I fear, is unattainable.

If you’re not interested in the debate that led up to the rulings, skip to page 56 where the final FTC revisions start.

In a nutshell, you’re affected by the revised FTC Guides if you dabble in word-of-mouth marketing or use endorsements in advertising. The revisements do not purport to regulate advertisements, only endorsements, which it defines as:

“any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or 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. The party whose opinions, beliefs, findings, or experience the message appears to reflect will be called the endorser and may be an individual, group, or institution.”

In terms of enforcement, both endorsements and testimonials will be treated identically.

If you use testimonials, the new ruling states that endorsers “must be bona fide users at the time the endorsement was given,” and that advertisers “may continue to run the advertisement only so long as it has good reason to believe that the endorser remains a bona fide user of the product.”

Word-of-mouth marketers should pay close attention to section 255.5: Disclosure of material connections, starting on page 75. Anyone that participates in a network marketing program is affected, as are bloggers, book reviewers, etc. that receive cash, free/discounted product, or other inkind compensation for reviews and endorsements.

Included are several examples applying the provisions to what the FTC deems “consumer-generated media.” Blogger discussions dominate, but I can see the Guides impacting messages distributed via other social networks like Twitter or Facebook, too.

I can’t claim to fully understand what it will take to comply with the FTC revisions. There’s an awful lot of gray areas, and even the FTC admits they can’t address every possible scenario in the Guides.

Nevertheless, I highly recommend you familiarize yourself with this very important document, and if you are doing something that isn’t cut-and-dried, error on the side of caution and disclose your relationship in an FTC Guides Disclosure Policy. Both advertisers and endorsers are liable, and failure to comply can result in a hefty $11,000 fine.

– Sue Anderson-Lenz

Marketing Lure, Inc.