If there’s a material connection between a marketer and an endorser, disclose it. That’s been the FTC standard for decades and it didn't change when marketing moved to social media. The FTC’s proposed settlement with online entertainment network Machinima illustrates missteps that could land advertisers, ad agencies, and PR firms in testimonial turmoil. But what about endorsers, affiliates, influencers, brand ambassadors, etc.? It’s time to debunk some common myths about how the FTC Act applies to them.
First things first. Who is an endorser? The FTC’s Endorsement Guides include a detailed definition, but it boils down to this. If an advertiser – or someone working for an advertiser – pays you or gives you something of value to mention a product, chances are you’re an endorser covered by the law. If you receive free products or other perks with the expectation you’ll discuss them or talk them up in your blog, you’re covered. If you’re part of a network marketing program where you sign up to get free product samples in exchange for writing about them, you’re covered. So in some ways, the biggest misconception about endorsements may be the erroneous conclusion “I’m not an endorser.”
Here are some other common myths.
“If I sincerely like the product and tell the truth in my endorsement, there’s no need to disclose my connection to the brand.” That’s not correct. It should go without saying – but we’ll say it anyway – that your endorsement or review has to represent your honest opinion. That’s FTC Truth in Advertising 101. But your obligation doesn’t end there. Under the FTC’s Endorsement Guides, if there’s a connection between you and the brand that a reader or viewer wouldn’t expect and if knowledge of that would affect how they evaluate the endorsement, you should disclose that connection. Think of it from your perspective as a consumer. If an ad features glowing testimonials from people who use the product – but you weren’t told they’re employees of the company – would you feel deceived? We think you would. The ad would be misleading unless that connection is clearly disclosed. The same principle applies if an endorser has been paid or given something of value to tout the product. Knowing about that connection is important information for anyone evaluating the endorsement.
“The obligation to disclose a material connection is on the marketer, not the endorser.” No. The responsibility goes both ways. Marketers should have reasonable programs in place to train endorsers and monitor what they’re doing on the brand’s behalf. (Read The FTC Endorsement Guides: What People are Asking for a description of some elements every program should include.) But the endorser has an independent disclosure obligation, too.
“Everybody knows that bloggers are paid to tout product.” We don’t think it’s that simple. Some bloggers who mention products or include links don’t have any connection to the marketer. They bought the product themselves and aren’t getting anything for talking about it. They just like to write about the stuff they buy. So how can consumers differentiate those reviews from ones by people who are compensated for their endorsement? We think the answer is clear disclosure.
“The FTC requires mandatory language if a blogger gets something from a company.” Yes, you need to disclose that fact, but no, there are no magic words or required language. The point is to convey the information in a straightforward way. It depends on the context, of course, but a simple disclosure like “Company X gave me this product to try . . .” or “This video is sponsored by [product name] . . .” may give consumers the heads-up they need.
“Explaining my relationship to the brand in a hyperlink should do the trick.” No. The law requires clear disclosure. And let’s face it: People aren’t likely to follow a link that says DISCLOSURE, LEGAL, or something like that. Putting something in the ABOUT section is likely to be ineffective for the same reason. It’s too easy for consumers to overlook. Given that effective disclosures can be short and sweet, there is no good reason not to make them upfront where people are most likely to get the message. In other words, don’t hide a disclosure behind a hyperlink. Don’t bury it in a dense block of text or a hard-to-read license or user agreement. And don’t put it in an obscure footnote or somewhere else people aren’t likely to look. Think of it from this perspective: How do you disclose information when you really want to – as opposed to when you have to? Approaching disclosures with that frame of mind reduces the risk of consumer confusion. .com Disclosures: How to Make Effective Disclosures in Digital Advertising offers practical insights from FTC staff.
“This material connection stuff is impossible to figure out without lawyering up.” Not so. The Endorsement Guides include 28 right-here-right-now examples, one of which may cover your question. Then there’s The FTC Endorsement Guides: What People are Asking, FAQs published in 2010 and updated this year. Our endorsements page offers easy access to law enforcement resources and don’t forget the 30+ Business Blog posts about endorsements. What if you have only four minutes? That’s time enough to watch this video.
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