On October 5, the FTC released their updated guidelines to advertisers on how to keep their endorsement and testimonial ads in line with the Federal Trade Commission Act.
The guidelines were last updated in 1980. Clearly technology and publishing has changed significantly in the past 30 years.
The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.
By the way, I don’t receive any income, advertising dollars or free product in connection with ComplianceBuilding.com. If do, I’ll let you know when I write about it. (Feel free to send that new BMW for me to review.)
The other interesting aspect of the Guidelines is how they treat celebrity endorsers. The revised Guidelines make it clear that celebrities must disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media. I am waiting to hear the first disclaimer on Regis and Kelly.
Text of the Federal Register Notice