For the first time in almost 30 years, the Federal Trade Commission has issued guidelines governing testimonials and endorsements — and for the first time, included guidance that cover bloggers and other online social media platforms.
The Guides Concerning the Use of Endorsements and Testimonials in Advertising, which were unanimously approved by the Commission, will take effect Dec. 1. Link: http://www.ftc.gov/os /2009/10/091005revisedendorsementguides.pdf
The new guidelines reflect “the FTC’s effort to come to terms with social marketing and the realization that there is a new paradigm in advertising,” explained Anthony DiResta, a partner in the advertising, marketing and media practice group at Manatt Phelps & Phillips in Washington, D.C. “We still have traditional media … that disseminates information to the passive consumer, but we also now have media platforms where consumers have control of the message.”
The new guidelines are a “huge” change, said William M. Heberer, a partner at Morritt Hock Hamroff & Horowitz in Garden City, N.Y.
The two biggest changes, according to Heberer, “are the death knell of ‘results not typical’ ads, which have been a staple of advertising for decades [and] the application of the guides to blogs and other forms of social and new media.”
He noted that over the past few years, “a whole cottage industry has blossomed … with ‘brand ambassadors’ or pay-per-post bloggers. The FTC believes it is important for consumers to understand the full nature of the relationship between a seller and a blogger.”
There is no exception in the guidelines for professional services — which means they cover lawyers and firms who blog, participate in other online social media or otherwise advertise.
To avoid the risk of a lawsuit or FTC enforcement action, said Heberer, “law firms need to have social media policies in place even for attorneys who are engaging in social media outside of the work environment,” because certain references to the firm or a client of the firm could be viewed as an advertisement.
No ‘magic words’
The FTC guidelines have not been updated since 1980. But over the past 30 years, the Internet has transformed advertising.
“Some advertisers feel that a blogger’s review or reference to a product can be much more effective than traditional advertising,” Heberer explained.
To capitalize on that, companies have begun sending free products for review or paying bloggers to endorse products.
From the FTC’s perspective, this is problematic because consumers may be unaware of the relationship between the advertiser and the blogger. So the new guidelines require online reviewers to disclose any connection with an advertiser, from a free product to an actual payment.
Heberer said that the FTC didn’t provide any “magic words” to protect bloggers, but that in many cases the inclusion of an informational box on the home page disclosing such a relationship would probably be sufficient.
The guides also make clear that if the blogger makes claims about a product that are incorrect or can’t be substantiated, both the blogger and the company could be liable.
Results not typical
The guidelines also address ads that make claims of typicality or use testimonials and endorsements.
The classic example would involve a weight loss product. In the past, an individual might endorse the product after losing 100 pounds in a week, and the advertiser would simply note that the person’s results were not typical.
Advertisers must now be more explicit in all forms of advertising — not just online — and make clear what results would be generally expected with the product’s use and be able to substantiate those claims, Philadelphia-based Eckert Seamans partner Roberta Jacobs-Meadway.
For example, the manufacturer of the weight loss product “would need to have data, and show for example that it tracked 2,000 people over the last year and the average weight loss was really 10 pounds,” she said.
In the legal context, the guidelines could apply to a Web site or other advertisement that promotes an exceptionally large verdict, such as a $150 million win in a slip-and-fall case.
“The key question would be if the net impression of the ad is that the consumer can expect similar results from that lawyer or law firm,” said DiResta, who is general counsel to the Word of Mouth Marketing Association.
Attorney advertising is regulated by state bar associations and the issue of what is a typical result could be impossible to determine.
But lawyers should keep the guidelines in mind when using client testimonials or advertising victories, DiResta noted.