Wednesday, 4 November 2009

New FTC endorsement & testimonial guidelines, do they affect you?

The new Federal Trade Commission (FTC) guidelines concerning the use of endorsements and testimonials in advertising come into effect on December 1st 2009. Any of us that work within the US, or with US organisations anywhere in the world will be impacted so please take note.

We have no definitive legal opinion yet however let's review the main points:

From a blogging perspective things are simple; clear disclosure of any material connection with a company/product/service mentioned is required.

The press release indicates these rules apply to Testimonial Advertisements, Bloggers and Celebrity Endorsements; at the very least the new rules should be integrated into blogging guidelines (claims and full disclosure) and also claims-based advertising/marketing campaigns.

The large change is that it seems when making any claim one also needs to know what the generally anticipated outcome is; often easier said than done.

Taken from the press release:
‘Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.’

Imagine a diet DVD advert/press release/brochure claiming someone following the regime has lost 60 pounds. No issue in substantiating this however it could be that the generally anticipated outcome for diet regime DVDs is for them to be used once before becoming drinks coasters (probably for hot chocolate with marshmallows).

What we need to talk about is the generally anticipated outcome when the product is correctly implemented and I'm not sure how this is covered/differentiated in the new guidelines.

In summary
The blogging side is straightforward, other marketing activities less so. These new rules will impact any claims-based activity and therefore the need for rigorous case studies will increase.

Three questions still remain for me and I hope to be able to answer them soon:

1. How are advertising, websites, campaigns, events and press releases impacted?
2. Are case studies directly impacted? (specifically the collection/sign off of metrics)
3. Is there any increased liability for customers providing metrics in case studies?

The full guidelines are

This video from the FTC focuses on the blogging aspects of the endorsement guidelines.

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