Socialmedialand

Posts Tagged ‘FTC endorsement amendments’

The FTC has released a set of proposed new guidelines for endorsements. These are particularly relevant in their application to social media. Several admendments were made that directly refer to new media and the application of these rules in this sphere.

The report is fairly long so I read through it to summarize the main points that are relevant to its application in social media campaigns. If you blog, or are involved in blogger outreach, you should begin following these new guidelines, that way if they are enacted you won’t have to worry.

1. If you present an opinion and recommendation to use a product that is an endorsement. Even if you use your own words and present your own views (not use exact messaging from the company) it is still an endorsement.
2. Liability for advertisers
   1. You are liable for false statements made by an endorser (such as a blogger you asked to review a product) so you should be clear on the product details and make sure to convey all the information you have to them. In addition you should check their post for any false or unsubstantiated comments.
   2. You have to provide full disclosure. The blogger must clearly indicate if there is any material connection (payment or allowing them to keep the product.)
3. Liability for endorsers
   1. As the endorser you’re also liable for your statements. If you write something false or make claims about the product that can’t be proven you’ll be responsible for them as well as the advertiser.
4. You must disclose any material connection between the advertiser and the endorser. This responsibility falls on both parties.

This quote from the document sums up the changes related to new media.

New Examples 7, 8, and 9 apply the general principle that material connections between the endorser and the advertiser should be disclosed to several new forms of marketing – blogs, discussion boards, and “street teams.” The Commission specifically seeks comment on these examples, with particular focus on the expectations held by consumers as to the relationships that exist between advertisers and endorsers in these new marketing contexts. The Commission notes in this regard that WOMMA, a trade association whose members are engaged in word-of-mouth and other new types of marketing, stated in its comment that the relationship between endorsers and advertisers should not be concealed, and that the principles of transparency that form the basis of its code of ethics require, among other things, that endorsers not misrepresent their opinions or their identities (for example, by creating artificial entities to endorse products).103 The Commission has long believed that industry self-regulatory codes play an important role in consumer protection, and that the development of ethical standards emphasizing transparency for marketers who engage in new forms of marketing is an important step to this end.

I believe transparency in social media marketing is a key principle to success, and the key point in this quote is just that. From this point on, disclosing all material connections between advertisers and endorsers will be critical. Make it easy on yourself and start now. My thoughts on authentic blogger outreach campaigns are that they should be based on this kind of transparency. You shouldn’t misrepresent paid employees as a consumer and have them recommending (via blogs, comments, forums, Facebook or wherever) people to try your product based on their fake review and experiences. This amendment from the FTC has come about to protect consumers from companies who’ve been practicing these deceptive tactics.

The FTC report includes this example which may help you understand the changes better:

Example 5: A skin care products advertiser participates in a blog advertising service. The service matches up advertisers with bloggers who will promote the advertiser’s products on their personal blogs. The advertiser requests that a blogger try a new body lotion and write a review of the product on her blog. Although the advertiser does not
make any specific claims about the lotion’s ability to cure skin conditions and the blogger does not ask the advertiser whether there is substantiation for the claim, in her review the blogger writes that the lotion cures eczema and recommends the product to her blog readers who suffer from this condition. The advertiser is subject to liability for false or unsubstantiated statements made through the blogger’s endorsement. The blogger also is subject to liability for representations made in the course of her endorsement. The blogger is also liable if she fails to disclose clearly and conspicuously that she is being paid for her services.

For a while new media has been relatively self-policed. However, its adaption by a larger segment of the population added to the borderline deceptive advertising practices that have been utilized in the past have led the FTC to feel the need to step in and regulate our communication here. I firmly support the FTC’s proposed amendments, but I’m concerned on how effectively they’ll be able to enforce them. What do you think? Necessary? Or over regulation? Let’s discuss in the comments.

Photo credit: dbking [Flickr]