On Monday, October 5, 2009, the Federal Trade Commission released its revised “Guides Concerning the Use of Endorsements and Testimonials in Advertising” — the first time these guidelines have been changed since 1980. A lot has changed in the public relations landscape since then, and many of these changes have stemmed from how consumers are using information they find on the Internet.

1. Guidelines for Endorsements
and Testimonials in Advertising

2. introduction
On Monday, October 5, 2009, the Federal Trade Commission
released its revised “Guides Concerning the Use of Endorsements
and Testimonials in Advertising” — the first time these guidelines
have been changed since 1980. A lot has changed in the public
relations landscape since then, and many of these changes have
stemmed from how consumers are using information they find on
the Internet.
Beginning December 1, 2009, the FTC will regulate the social and traditional media space
for paid endorsements, evaluating content as to whether or not it qualifies as “sponsored.” If
content is deemed to be sponsored, and this fact is not disclosed in the content itself, brands,
agencies and bloggers are subject to up to an $11,000 fine per incident.
Weber Shandwick will continue to explore the implications of the new guidelines and will
share them with our clients and agency partners. We believe the updated FTC guidelines are
in the true spirit of social media, and will improve the quality and credibility of our clients, our
partners and Weber Shandwick in general.
background
Under the 1980 guidelines, brand- and product-motivated word of mouth reviews and
marketing, or paid endorsements, were allowed as long as a simple “results not typical”
disclaimer was included with the endorsement content itself.
According to the new rules, this will no longer suffice, as the revised guidelines’ main
purpose is to address the proliferation of “sponsored,” or paid endorsements, in digital
and traditional media.
The new rules require full disclosure from every agency partner, from a celebrity sitting on
Conan O’Brien’s couch to a blogger with any size audience, that they received money or free
product (a sponsorship) in exchange for their endorsement.
Federal Trade Commission Guidelines | October 2009
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3. What is an endorsement?
According to the Guides, an endorsement is:
“… any advertising message (including verbal statements, demonstrations, or depictions of the
name, signature, likeness or other identifying personal characteristics of an individual or the name
or seal of an organization) that consumers are likely to believe reflects the opinions, beliefs, findings,
or experiences of a party other than the sponsoring advertiser, even if the views expressed by that
party are identical to those of the sponsoring advertiser.”
From a social media perspective, the following scenario is, in fact, an endorsement:
“If [a] blogger frequently receives products from manufacturers because he or she is known to have
wide readership within a particular demographic group that is the manufacturers’ target market, the
blogger’s statements are likely to be deemed to be ‘endorsements,’ as are postings by participants
in network marketing programs.”
Many brands approach influencers as part of their ongoing marketing and public relations efforts,
whether it’s asking them to write product reviews, go on television to talk about a product or simply
telling others about a brand’s marketing program. If the endorser meets the following criteria, the
content will be considered sponsored:
•
T
he endorser is compensated (with money or free products or services) by the brand or a
third party
•
The endorser has received products or money from the same or similar marketer
•
T
he endorser receives such products or services regularly (from the same or similar
marketer), and expects to do so in the future
Many brands approach influencers as part of their ongoing
marketing and public relations efforts, whether it’s asking them to
write product reviews, go on television to talk about a product or
simply telling others about a brand’s marketing program.
Federal Trade Commission Guidelines | October 2009
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4. Once a digital campaign that encourages endorsements
commences, we must monitor for and correct any failures
to disclose a sponsored relationship. This is something
Weber Shandwick does regularly.
Disclosures
When Weber Shandwick provides a product sample, reward or gift — large or small — in
conjunction with public relations or marketing campaigns, we must now require that our
spokespeople and advocates (product influencers) provide meaningful disclosure that’s
understandable to the average consumer. This means, when Weber Shandwick begins to work
with any partner, celebrity or blogger, we should not only reinforce this fact, but we must
provide additional tips and guidance when necessary.
The FTC also says that once a digital campaign that encourages endorsements commences,
we must monitor for and correct any failures to disclose a sponsored relationship. This is something
Weber Shandwick does regularly.
Federal Trade Commission Guidelines | October 2009
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5. FTC guidelines state bloggers must disclose their
relationships in a manner that an average reader can
understand. Weber Shandwick interprets this to mean
the disclosure must be part of the content itself.
scenarios
We will continue to monitor these developments and follow-up as appropriate, but until further
notice you will need to follow the FTC guidelines in the following situations:
B
logger Compensation
In all cases, bloggers must disclose their relationships with marketers. This means that if a blogger
receives anything in exchange for a post or review, they must disclose their relationship.
Examples include:
• Free product for testing purposes
• Cash
• Entry in a sweepstakes
• Travel to a product launch
One point not mentioned in the FTC guidelines is just how bloggers must disclose their
relationships, only that they be disclosed in a manner that an average reader can understand.
Weber Shandwick interprets this to mean the disclosure must be part of the content itself.
Celebrity Endorsements
The revised FTC guidelines also require celebrity endorsers to disclose their relationship with a
marketer when that relationship is not obvious.
•
P
aid advertisement: In most television ads, no additional disclosure is necessary; since the
public generally understands that the celebrity is being paid.
•
T
alk show appearance: A celebrity appears on a talk show to promote her new movie
and also mentions that she’s had great results from recent Lasik eye surgery. If she was
compensated by the surgery provider, she must disclose this fact.
•
E
vent appearance: A celebrity appearance at a marketer-sponsored event (e.g. an internal
sales meeting) would not require additional disclosure. On the other hand, a celebrity
appearance on behalf of a corporation at a third-party event (e.g. the New York Mets fan
fest) would require disclosure if the average consumer would reasonably not be expected
to know the celebrity is being compensated.
Federal Trade Commission Guidelines | October 2009
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6. Expert Endorsements
An expert’s expertise must be consistent with the matter on which she is speaking. Therefore, her
statements must be based on her expertise and must be truthful.
•
E
xpertise: An individual with a PhD in psychology cannot be presented as a “Doctor”
for purposes of endorsing a heart medication without full disclosure of the person’s true
expertise.
Organizational Endorsements
The FTC guidelines treat organizational endorsements similarly to other types of endorsements:
•
Paid endorsements: If a marketer can obtain the endorsement of an organization by
paying a fee, that fact must be disclosed.
•
O
rganizational expertise: An organization’s opinion must be related to its field of expertise
and based on its independent, objective evaluation.
Other Consumer Action
Consistent with the aforementioned blogger guidelines, the FTC guidelines give new examples of
consumer compensation requiring disclosure:
1. ostings on a message board: If an employee or representative of a company is going to
P
post on a message board, the individual’s relationship with the company must be disclosed
in a clear way.
2.
Word of mouth/street teams: If an individual is paid in cash or, for instance, points
exchangeable for merchandise every time she talks to her friends about a specific product,
that fact must be disclosed by the individual.
Accuracy and Truthfulness
Statements made by bloggers and other endorsers in the aforementioned scenarios must reflect the
honest opinions, findings, beliefs or experience of the endorser. Whether the speaker is a blogger,
an expert or a celebrity, the speaker’s statements must be accurate and truthful or both the speaker
and the marketer can be liable.
The endorser must be:
•
Product user: If a speaker claims to use a product, he/she must actually use it.
•
A
ccurate: If a speaker touts the qualities of a particular product, the speaker’s statements
must be accurate. A speaker can’t claim a medicine cured her acne unless it actually did.
•
“
Atypical”: If an individual appears as a “typical” user and his results are atypical, it is no
longer adequate to state “results not typical” within the endorsement itself.
Consumers must be told what they can expect. For instance, a review for a product that claims to
help bald men grow hair must state what results a typical man can expect. (e.g., “Most men will only
see minimal hair growth using our product.”)
Federal Trade Commission Guidelines | October 2009
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7. Moving forward
When choosing a potential endorser, either celebrity or digital, we will take a look at the
following criteria:
•
Whether the endorser clearly understands the new FTC guidelines
•
Whether the endorser has shown full disclosure with previous client programs
•
Whether the disclosure has interfered with the content of the said endorsements
As the guidelines come to life and marketers begin incorporating them into programs, we will keep
our staff, clients and partners updated on the practical implications and how to abide by them.
Chris Perry
310 854 8250
cperry@webershandwick.com
www.webershandwick.com
Federal Trade Commission Guidelines | October 2009
Adam Keats
312 988 2319
akeats@webershandwick.com
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