Cyberspace has been humming in recent weeks about the Federal Trade Commission’s new “Guides Concerning the Use of Endorsements and Testimonials in Advertising” (16 CFR Part 255), and with good cause. These guidelines affect every individual and company that communicates using electronic media (websites, blogs, newsletters and social media outlets like Twitter® and Facebook®). Even “Mommy bloggers” now must be careful about touting products.
It is not surprising that the FTC stepped in with these new guidelines. With so many new ways to push products and services, social media marketing has exploded. The Word of Mouth Marketing Association states that advertisers spent $1.35 billion on social media marketing in 2007, and WOMMA forecasts it will reach $3.7 billion by 2011.
It is important to understand that the FTC is not out to inhibit free speech on blogs, or impose rules on Internet advertising that do not exist in the brick-and-mortar world. It simply is trying to protect consumers from false or misleading advertising.
Briefly, these new rules tell us:
NO DECEPTIVE ADVERTISING: Customers depend on what you say to be the truth when they make a decision to buy. Do not mislead them with your statements, or omit information that customers need to know before deciding to purchase. Example: If the price of a product does not include shipping charges, you must state that.
SUBSTANTIATE YOUR CLAIMS: One example of this is weight loss products. If your ad shows someone who lost 50 lbs. in 3 months, you can no longer simply add a small disclaimer that says, “Results may vary.” You must disclose the generally expected performance of the product. If the ad states, “tests show X”, you need to have solid evidence that real tests show at least “X.”
If you use testimonials to promote your product or service, they must be from real customers or clients, not your mother or best friend.
DISCLOSE, DISCLOSE, DISCLOSE: If you promote a product that you purchased with your own money, used, and liked or disliked, you have every right to tell others about your experience. However, if a company gives you a product to try, or pays you to review a product, whether what you write is positive or negative, you must disclose your affiliation with the company.
If you write something about a product in your blog that turns out to be false or misleading, you can be held liable. Advertising agencies and product manufacturers also may be liable, since they have the responsibility to make sure their social media endorsers are following the FTC guidelines. Celebrity endorsers can be held liable for deceptive advertising, even if they are reading from a script.
The long arm of the FTC can also reach to website builders, who must now make sure the ad copy they insert for their client does not violate the guidelines.