in advertising in all media, including blogs ... inquiries the FTC has received from advertisers, ad agencies, bloggers
JULY 2010
ADVERTISING, MARKETING & PROMOTIONS >> ALERT FTC ANSWERS FREQUENTLY ASKED QUESTIONS ABOUT ENDORSEMENT GUIDES The Federal Trade Commission (FTC) recently published answers to a series of frequently asked questions (FAQs) about its Guides Concerning the Use of Endorsements and Testimonials in Advertising (Guides). The FAQs answer the most common inquiries the FTC has received from advertisers, ad agencies, bloggers and others since issuing the revised Guides in October 2009. WHY DID THE FTC ADOPT THE “NEW” GUIDES? The Guides are not new. The Guides have been updated to ensure truth in advertising in all media, including blogs, social networking sites, and other new media. The basic principles of the Guides remain the same endorsements must be truthful and not misleading and, if there is a connection between the endorser and the marketer that would affect how people evaluate the endorsement, that connection should be disclosed.
IS THE FTC MONITORING BLOGGERS? The FTC is not monitoring bloggers and has no plans to do so. If a violation of the FTC Act comes to the FTC’s attention, the FTC will evaluate the matter on a case-by-case basis. If law enforcement becomes necessary, the FTC’s focus will be on the marketers, and not the bloggers.
WHEN DO THE GUIDES APPLY? If a blogger mentions a product that the blogger paid for him or herself, the Guides do not apply. The Guides only apply to endorsements that are made on behalf of a sponsoring marketer. Bloggers who are paid directly or receive something of value in return for reviewing or mentioning a product are considered to be making endorsements on behalf of a marketer. While there is no set dollar amount as to what constitutes “something of value,” if a blogger has an ongoing relationship with a marketer in which the marketer sends the blogger a steady stream of inexpensive products, a disclosure would be required.
THE BOTTOM LINE Marketers should have reasonable programs in place to train and monitor members of their social media marketing network. While the scope of these programs may vary depending on the risk that deceptive practices by members could cause consumer harm (e.g., physical injury or financial loss), marketers should 1) inform members of what can and cannot be said about a product; 2) set up a reasonable monitoring arrangement to examine what members are saying about a product; and 3) investigate questionable practices.
HOW SHOULD A DISCLOSURE BE MADE? There is no special language to make a disclosure. The goal is to effectively communicate the blogger’s
relationship with the marketer. A disclosure could be as simple as “Company X gave me this product to try….” >> continues on next page
Attorney Advertising
JULY 2010
ADVERTISING, MARKETING & PROMOTIONS >> ALERT
WHERE SHOULD THE DISCLOSURE BE MADE? Disclosures should be placed in a manner that makes them clear and conspicuous. The best way to accomplish this is to make the disclosure a part of the message that mentions, promotes or reviews the product. Buttons with labels such as “Disclosure” or “Legal” that require a reader to click-through to find the disclosure statement will likely be insufficient. Similarly, disclosures on a “Home” or “About Us” page purporting to apply to the entire site will also likely be insufficient.
ARE DISCLOSURES NECESSARY ON FACEBOOK OR TWITTER? Even if a person identifies him or herself on his or her Facebook page as an employee of a particular company, when mentioning that company’s products, the employee should include an additional disclosure to ensure that readers understand the employee’s relationship with the company. While the FTC recognizes that platforms, such as Twitter, limit the number of characters that can be included in a post, these character limitations should not prohibit a person from disclosing his/her material connection. Although the FTC does not mandate specific wording of
disclosures, the FTC suggests using hashtags such as “#paid ad”, “#paid” and “#ad” to provide readers with the information necessary to evaluate the sponsored material.
WHEN MUST A CELEBRITY MAKE A DISCLOSURE? Even if a celebrity is a well-known spokesperson for a company, the celebrity should disclose his or her relationship when posting to a personal blog or social networking page if a significant number of readers do not know the celebrity is a paid spokesperson for the company.
1) the preview event was the first and only such event engaging bloggers; 2) only a very small number of bloggers posted content about the event, and several of them made proper disclosures in their posts; 3) there was a sign at the event instructing bloggers to disclose the gifts if they posted about the event; and 4) Ann Taylor created a written policy in February 2010 stating that it would not issue gifts to bloggers without first instructing them they must disclose the gifts in their blogs.
To view the full FAQs click here.
HAS THERE BEEN ANY ENFORCEMENT YET? While not part of the FAQs, it should be noted that in April, the FTC concluded its first investigation under the revised Guides when it issued a letter declining to pursue an enforcement action against Ann Taylor LOFT (Ann Taylor). According to the FTC, Ann Taylor encouraged bloggers who attended a collection preview event to post about the collection in exchange for gifts and the chance to win a mystery gift-card worth between $50 and $500. The FTC found that several bloggers posted content about Ann Taylor without disclosing their receipt of the gifts. The factors that led the FTC to decline action against Ann Taylor were
FOR MORE INFORMATION Ronald R. Urbach Partner/Co-chair 212.468.4824
[email protected] Allison Fitzpatrick Associate 212.468.4866
[email protected] or the D&G attorney with whom you have regular contact.
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