expertSEM

This may be somewhat old news, but I believe it is still quite important and warrants mention on expertSEM. In October 2009, the Federal Trade Commission (FTC) updated their guidelines for testimonial announcements, bloggers and celebrity endorsements. These guidelines have not been updated since 1980, well before social media was even an inkling. Mary Engle of the FTC in a video statement on the FTC site: “We’re applying [the 1980] principles to today’s world—in the world of social media—where you can’t always recognize an advertisement just by looking at it.” To be clear, these guidelines are not laws themselves. The guides simply serve as a way to help advertisers comply with the FTC Act.

Following are brief explanations of the updates:

• Any advertisement featuring a testimonial discussing an atypical experience with a product or service (e.g., “I lost 200 lbs. with the FlexBelt alone!”) must clearly disclose typical results.

• “Material connections” between the advertiser and endorser much be clearly disclosed. Materials can mean direct payments, free products or gifts of any kind. This update was made to address bloggers and social media specifically. Bloggers must state their connection to any product/service they endorse if connected materially.*

• Endorsers, not just advertisers, can now be held liable for false or unsubstantiated claims or for not disclosing connection.

• Celebrities have a duty to disclose relationships with advertisers when using mediums outside of traditional advertisings, such as social media or talk shows.

Blogvertising has grown significantly over the past few years. For advertisers, it provides a fresh medium for a fraction of the cost of other ads. For bloggers, it provides an extra source of income, free products/services or cool gifts such as tickets to sports events, concerts, etc. Everyone wins, right? Maybe not consumers. While they may not be harmed by this material connection, the FTC unanimously agreed (it was a 4-0 approval vote for changes) that consumers have a right to know what is going on behind the screens. Personally, I think it’s unfortunate that this needs to be stated. If you write a glowing, ranting-and-raving review, especially of a rather mundane product, it should go without saying, no matter how obvious, that you must disclose your relationship to the advertisers. Just like in grade school though, a few bad bloggers ruin it for everyone else.
As a marketer, how can you be sure that you’re following the new guidelines? Follow these brief tips:

• Err on the side of caution. If you’re not sure whether you must disclose or not, just go ahead and make a statement. Cover your rear so it doesn’t get slapped with lawsuit.

• Watch your bloggers. No one wants to hold their hands, but you must ensure your bloggers are disclosing their relationships.

• Don’t be intimidated by guidelines. Social media’s importance will only continue to grow in the future. Don’t drop out because you’re afraid of violating guidelines. Use good judgment and be honest, and you’ll have nothing to fear.

• Update your own guidelines for social media. Be sure to include these changes in your internal policy and add them to your training.

Read the statement from FTC here or, if your Thanksgiving is looking to be especially boring, the full 86-page guidelines.

Just because I think it’s funny.