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Blogs, Endorsements Must Include Full Disclosure
By Jeff Miller Posted: 10/06/09 08:41
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RAPAPORT... The Federal Trade Commission (FTC) revised its guidance it gives advertisers on how to keep their endorsement and testimonial ads in check with new standards. The FTC Act incorporated several changes to the FTC''s guides and use of endorsements and testimonials whether through a blog post or any social media outlet that originates from consumers, experts, organizations or celebrities. Authors must disclose their connections and payment, if any, as of December 1, 2009. It was the first time since 1980 that the FTC has updated the guides.
The 1980 version of the guides did not explicitly state that endorsers as well as advertisers could be liable under the FTC Act for statements they make in an endorsement. The revised guides reflect FTC case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement or for failure to disclose material connections between the advertiser and endorsers.
The blogger, who receives cash, free product, or in-kind payment is considered an endorsement when posting a product story. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. If a company refers 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. Any paid endorsement is deceptive if it makes false or misleading claims, the FTC ruled.
Under the revised guides, advertisements that feature a consumer and convey his or her experience with a product or service will be required to "clearly disclose the results that consumers can generally expect," according to the FTC. The revision also adds new examples to illustrate the long standing principle that free products or payment for a mention between advertisers and endorsers must be disclosed. "These examples address what constitutes an endorsement when the message is conveyed by bloggers or other ''word-of-mouth'' marketers," the FTC stated.
Celebrity endorsers have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media, according to the FTC guides.
In any law enforcement action challenging a deceptive use of testimonials or endorsements, the FTC would have the burden of proving that the challenged conduct violates the FTC Act. The FTC voted 4 to 0 in favor of the changes.
Download and read the updated 81 page FTC Guides as a PDF.
http://www.ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf
Blogs, Endorsements Must Include Full Disclosure
By Jeff Miller Posted: 10/06/09 08:41
Submit Comment
RAPAPORT... The Federal Trade Commission (FTC) revised its guidance it gives advertisers on how to keep their endorsement and testimonial ads in check with new standards. The FTC Act incorporated several changes to the FTC''s guides and use of endorsements and testimonials whether through a blog post or any social media outlet that originates from consumers, experts, organizations or celebrities. Authors must disclose their connections and payment, if any, as of December 1, 2009. It was the first time since 1980 that the FTC has updated the guides.
The 1980 version of the guides did not explicitly state that endorsers as well as advertisers could be liable under the FTC Act for statements they make in an endorsement. The revised guides reflect FTC case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement or for failure to disclose material connections between the advertiser and endorsers.
The blogger, who receives cash, free product, or in-kind payment is considered an endorsement when posting a product story. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. If a company refers 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. Any paid endorsement is deceptive if it makes false or misleading claims, the FTC ruled.
Under the revised guides, advertisements that feature a consumer and convey his or her experience with a product or service will be required to "clearly disclose the results that consumers can generally expect," according to the FTC. The revision also adds new examples to illustrate the long standing principle that free products or payment for a mention between advertisers and endorsers must be disclosed. "These examples address what constitutes an endorsement when the message is conveyed by bloggers or other ''word-of-mouth'' marketers," the FTC stated.
Celebrity endorsers have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media, according to the FTC guides.
In any law enforcement action challenging a deceptive use of testimonials or endorsements, the FTC would have the burden of proving that the challenged conduct violates the FTC Act. The FTC voted 4 to 0 in favor of the changes.
Download and read the updated 81 page FTC Guides as a PDF.
http://www.ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf
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