Today the Federal Trade Commission’s (FTC) new rules take effect governing terms of endorsing testimonials in advertising. The FTC is an independent agency of the U.S. government created and tasked by Congress with administering a wide variety of consumer protection laws. The Commission is empowered to adopt rules to protect consumers against “unfair and deceptive acts or practices,” most notably in the arena of advertising.
These new guidelines change the tempos of the tango between businesses and bloggers. Adopting revised “Guides Concerning the Use of Endorsements and Testimonials in Advertising” 16 CFR 255, the Commission rules include “new forms of consumer-generated media, such as the use of blogs in word of mouth marketing campaigns.” Some highlights of the new guidelines include: definitions of endorsements will depend on a “case by case” analysis; what businesses and bloggers may find troubling about these revisions is the absence of bright-line parameters of conduct; factors weighed in determining whether a blog post would be considered “sponsored” include whether the product or service being discussed in the post was provided for free by the advertiser or its agent to the blogger; even a single item of merchandise from a marketer may trigger the obligations imposed on “sponsored” endorsements.
Some business takeaways for bloggers and businesses: The obligation to disclose a connection between a blogger and an advertiser falls “primarily” on the blogger but is also shared by the advertiser; The determination of whether a blog post is deemed and “endorsement” and, therefore, regulated commercial speech, creating unique liabilities on a blogger and advertiser, depends on a variety of factors, resting on a case-by-case analysis; Both the advertiser and the blogger are “subject to liability for misleading or unsubstantiated representations made in the course of the blogger endorsement;” A blogger” is also liable if they fail to disclose clearly and conspicuously that they are being paid for their services.”
Businesses also may be responsible for the excessive claims of a blogger when the business or marketer initiated contact with the blogger and created a sponsored relationship and review. For a copy of these guidelines, go to the FTC website at www.ftc.gov for free information. Also, a more detailed commentary can be found at www.howell-marketing.com or www.glengilmoreblog.blogspot.com.