The FTC recently issued "FTC Facts for Business," answering frequently asked questions about the FTC's revised endorsement guides, which we have previously blogged about here and here. The FTC Staff took considerable heat for its revised Guides, including critiques that it was targeting bloggers and misunderstood social media, and the FAQs try to eliminate some common misunderstandings — including the fear that the FTC will be knocking on the doors of teen and mom bloggers and issuing fines. The Q&As begin by summarizing three truth-in-advertising principles: (1) endorsements must be truthful and not misleading; (2) If the advertiser does not have proof that the endorser's testimonial represents the typical experience, the ad must clearly and conspicuously disclose generally expected results; and (3) If there is a connection between the endorser and the marketer of the product that would affect how people view the endorsement, then that connection should be disclosed. The FAQ then addressed the following subjects: About the Endorsement Guides: They are not new, but they are revised. They were revised because they were written in 1980, and needed to be updated to apply in today's marketing world, which includes blogs and social networking sites. Disclosures are important because an act or practice is deceptive if it misleads "a significant minority." Contrary to some press releases, there is no fine for not complying with the FTC guide. The FTC has no plans to monitor bloggers, but will continue to focus on advertisers. The guides do not hold online reviewers to a higher standard than reviewers for paper-and-ink publications. Finally, if you are acting on behalf of an advertiser, that is commercial speech which can be regulated under the FTC Act if it is deceptive. When do the Guides apply to endorsements? They cover endorsements that are made on behalf of a sponsoring advertiser, e.g., where an advertiser pays a blogger or gives him or her something of value to discuss a product. Continuously getting free stuff from an advertiser creates an expectation of future benefits from positive reviews. The guide applies to videos just the same way it applies to websites or blogs. If readers understand that a person is being paid to endorse a product, then a disclosure is not necessary. How should I make the disclosure? There is no special language, the point is simply to give readers the information. The following types of disclosures are typically not sufficient: a single disclosure on a home page, or a button that says "disclosure, legal." On the other hand, a disclosure can be sufficient in as many as 8 characters in a tweet: "#paid ad"! How do the Guides apply to affiliate or network marketing? Small network marketing businesses should tell participants that if they get products through the program, they should be clear they got them for free. With respect to affiliate marketers with links to online retailers who pay commissions, such relationships should be disclosed. Social media marketing networks should set up reasonable monitoring programs and should check up on questionable practices. What do I need to know about the Guides? You can't talk about your experience if you haven't tried it. If you were paid to try something, and you thought it was terrible, you can't say it was great. You can't make statements about a product that would require proof you don't actually have. With respect to testimonials, statements like "results not typical," will not suffice. You must either have the proof to show the results are typical, or clearly and conspicuously disclose the generally expected performance. – Amy Mudge and Marianne El Sonbaty
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