After an extensive two-year review, on October 5th the FTC released revisions to its guidance document, Guides Concerning the Use of Endorsements and Testimonials in Advertising, the first revisions to the Guides since 1980. The revised Guides will go into effect on December 1st, 2009, and include significant changes, particularly with regard to endorsements and testimonials in “new media” such as blogs, viral marketing, and social network sites.
A change affecting advertisements in all media is elimination of a safe harbor for typicality disclaimers, such as “results not typical” or “individual results may vary.” While the FTC states that advertisements featuring testimonials and endorsements will be judged on a net impression basis, elimination of the safe harbor is likely to mean that if advertisers are unable to substantiate that an endorser’s experience is representative, they will need to disclose in the advertisement the actual representative results a consumer is likely to experience.
In a change affecting only “consumer-generated” new media, and seeking to address the growing use of consumer-generated media by advertisers and marketers to promote their products and services, the Guides require that “material connections” between advertisers and “endorsers” be disclosed. The FTC defines material connections broadly to potentially include simply the receipt of free product samples by bloggers and social network users, and defines endorsement broadly to include situations in which the advertiser does not control what, if anything, is said by the endorser about the product. Both the advertisers and endorsers can be held liable for failing to disclose material connections.
In issuing this guidance, the FTC distinguished between traditional media and consumer-generated content, stating that in the world of consumer-generated content, it is the endorser rather than the advertiser that disseminates the endorsement and that readers are likely to believe that the consumer-generated content reflects the opinion, beliefs, findings, or experiences of the consumer rather than the sponsoring advertiser. Therefore the consumer making the endorsement has an obligation to disclose material connections with the advertiser.
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