Cutting Through the New FTC Endorsement and Testimonial Advertising Guides

Part 1: Advertisers

Transparency and monitoring are arguably the two biggest elements of the new guides that took effect December 1, 2009. The explosive growth of social media — and blogs in particular — has been one of the driving forces behind this update. That and the fact the guides have not been updated since 1980…

What’s the Fuss About?

• The new guidelines address more than just endorsements by celebrities. Guidance is now in place for endorsements by consumers, experts and organizations.

• Disclosure of any material connections between the endorser and advertiser must be made – including non-monetary items such as product. This is the change receiving the most media attention as well as criticism and confusion among bloggers.

-Just as it has been a common PR practice to send product samples to a traditional media reporter in order to review the product, many advertisers have extended this tactic to the blogosphere.

-As of December 1, 2009, bloggers or consumers who write about a free product sent to them (good or bad) must disclose this. Persons who purchase the product with their own money and write a glowing review are not subject to this guideline.

-The question remains is $50 worth of a food or beverage product really enough to sway a positive review? What about providing a year-long lease and insurance to a blogger to drive and talk about the newest mini-van? Or paying a person a set amount of money every time he/she tweets about your product?

-Unfortunately the new guides do not specifically state a minimum value of the product so most advertisers should err on the side of safety and ask the free product or service be disclosed by the recipient.

-Another important factor pointed out in the guides is not just the amount of the free product or service, but also the frequency of which you send it to this person.

• This disclosure must be made across all mediums. This includes the ever-popular Twitter platform which has a 140-word character limit; grassroots outreach; and even street team marketing.

-Many professional bloggers are developing their own ways to meet this requirement while still having enough characters left to tweet something of value. Melanie Notkin, CEO and Founder of SavvyAuntie.com has taken to adding a “SP” for “sponsored post” on the end of any sponsored tweet.

• The burden lies on the advertiser to make sure that these material connections are disclosed. Essentially this means the advertiser must make sure that any endorser is told what can — and equally important — what cannot be said.

-Yes…you must spell out what cannot be said because under the new guides, the advertiser could be liable if the endorser makes a false or misleading claim about a product or service.

• Education alone is not enough under the new guides. Advertisers also must have a system in place to monitor what these endorsers are saying about the company and its product(s) to catch and attempt to correct any errors or inaccuracies.

• And then there is the case of employee endorsements – whether full-time or part-time employees or even college interns. The FTC has set guidelines in place to make sure any employees posting comments to a blog or forum, tweeting about a product, saying something on Facebook, calling a radio station or engaging in street team activities disclose the fact that he/she works for the company that makes the product or service.

As with any new guidelines or rules, a lot of companies are still determining exactly how this impacts their advertising or public relations plans. At the same time, leaders in the blogosphere are taking matters into their own hands having started the Blog with Integrity effort.

Over the next few weeks, we are likely to see media stories about whether the new guides are impacting the use of celebrity or consumer endorsers and if companies are still sending product to and/or paying bloggers.

Ultimately each advertiser will determine what, if any, changes will be made to company practices. But as for me…I’m still going to continue to tell my PR Clients that the benefits of reaching out to bloggers and other key influencers is still worth it — even with the new disclosure statements.