FTC Guidelines: Implications for Marketers
October 7th, 2009Author: Laura Halsch
We’ve seen lots of coverage in the past few days around the new FTC guidelines around endorsements, specifically about the impact this will have on blogger and “influencer” relations when it comes to social media and WOM marketing. The guidelines address a range of potential endorsers, besides bloggers, including:
- “Network Marketers”: the guidelines state that “participants in network marketing programs are also likely to be deemed to have material connection that warrant disclosure.” So if you are a BuzzAgent or a brand working with a similar program, disclosure and liability guidelines apply as they do to bloggers.
- Celebrities are considered liable for comments they make in advertisements – but importantly for PR people – also for what they say in editorial content. So celebrities being paid to talk about a product on a talk show, will be required to disclose their relationship with the brand.
- Employees: disclosure is required when employees of a company comment publicly about a product or service (the Guidelines use the example of a message board post). What was previously best practices, seems now to be a requirement, making employee policies and guidelines even more important.
At the end of the day, the guidelines require that endorsers 1) disclose their relationship with marketers and advertisers, and 2) are accountable for the truth and accuracy of their comments. This presents some basic considerations for us as marketers. Although disclosure about compensation is certainly not a new issue in the marketing world, there is now an added (financial) incentive to ensure that this is done consistently and ethically. The basics:
- Proactive Disclosure: Individuals who receive compensation (money/free product) in exchange for talking about personal experiences need to clearly and consistently disclose their relationship with the marketer (on the web, this should be done each time a new reference is made). It also means that as a marketer, we are responsible for setting up disclosure expectations for the programs we run – including include the proper way to disclose within the context of a blog as well as in 140 characters, or as part of a YouTube video.
- Guidelines and Recommendations: Especially with network marketing programs, when “endorsers” don’t necessarily consider themselves marketers, setting up recommended disclosure language and the parameters for reviews and endorsements will be important (i.e. stick to your personal experiences rather than making broad-generalizations about a product, be honest, etc.). In the same way, guidelines for employees who are talking about their companies’ products or services will be important too.
- Monitoring: Part of the guidelines states that “if the advertiser initiated the process that led to these endorsements being made … it potentially is liable for misleading statements made by those consumers.” With that in mind, it is not enough to simply disseminate free product and close your ears (not that this is advisable anyway). Brands will be responsible for tracking mentions and reviews by these influencers and potentially reaching out to correct or clarify mis-information.
All in all, these are best practices brands should be following anyway – and these guidelines are a step in the right direction. We’re following along as brands and marketers adopt these new guidelines, and will be tracking new developments as they come.
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Tags: Advertising, disclosure, Endorsements, FTC, PR
