In a move that impacts testimonial advertisements, bloggers and celebrity endorsements, the Federal Trade Commission announced Monday final revisions to advertiser guidelines. The rules aim to keep endorsement and testimonial ads in line with the Federal Trade Commission Act.
Last updated in 1980, long before the Internet was mainstream, the notice introduces key changes to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising. The guides address endorsements by consumers, experts, organizations and celebrities, as well as the disclosure of important connections between advertisers and endorsers.
Results Must Be Typical
Under the revised guides, advertisements that feature consumers or consumer experiences with products and services must be clear about typical results. For example, if the endorsement features stellar results — but those results are not common — the advertiser will be required to clearly disclose the results that consumers can generally expect.
By contrast, the 1980 version of the guides allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical.” The bottom line: The revised guides no longer contain this safe harbor.
What’s more, the revised guides offer new examples to illustrate a long-standing FTC principle that “material connections” (read: payments or free products) between advertisers and endorsers must be disclosed. These examples specifically address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers.
Defining Endorsement
Although decisions will be reached on a case-by-case basis, a blogger who receives cash or in-kind payment to review a product is considered an endorsement — and bloggers who make an endorsement must disclose the connections they share with the seller of the product or service.
Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the…