On September 7, 2017, the Federal Trade Commission revised its Endorsement Guides FAQs to help anyone online – from bloggers and influencers to recipients of free products – understand how to clearly disclose any unexpected material connection between an endorser and a company when making statements online about the company’s product. The latest revisions clarify that commonly-used disclosures are generally ineffective in the eyes of the FTC and provide examples of Do’s and Don’ts for improving disclosures.
Background: When do the Endorsement Guides Apply?
The endorsement guides apply to only those endorsements “made on behalf of a sponsoring advertiser.” The FAQs explain:
“[A]n endorsement would be covered by the FTC Act if an advertiser – or someone working for an advertiser – pays you or gives you something of value to mention a product. If you receive free products or other perks with the expectation that you’ll promote or discuss the advertiser’s products in your blog, you’re covered. Bloggers who are part of network marketing programs, where they sign up to receive free product samples in exchange for writing about them, also are covered.”
The test boils down to what information would affect the “weight or credibility your readers give to your recommendation.” As such, erring on the side of disclosure is essential. Will a third-party care that you received a cents-off company coupon on the purchase of a lipstick, in exchange for an online review? Possibly. But will a third-party want to know that the one-week cruise you’re raving about on Twitter was given to you for free? Definitely.
What is a Clear and Conspicuous Disclosure?
And not only is erring on the side of disclosure key, but any disclosure must also be “clear and conspicuous.” That means that “advertisers should use plain and unambiguous language and make the disclosure stand out,” and the disclosures should be easy to spot: a disclosure shouldn’t be buried in the middle or bottom of a comment box. Basically, the consumer should not have to look for the disclosure; the disclosure should find the consumer first. The FTC suggests that disclosures should be:
- Close to the claims to which they relate.
- In a font that is easy to read.
- In a shade that stands out against the background.
- For video ads, on the screen long enough to be noticed, read, and understood.
- For audio disclosures, read at a cadence that is easy for consumers to follow and in words consumers will understand.
Disclosures must also comply with basic truth-in-advertising principles – that is, all claims must be substantiated. The FTC thus advises that endorsements must “represent the accurate experience and opinion of the endorser, and that:
- You can’t talk about your experience with a product if you haven’t tried it.
- If you were paid to try a product and you thought it was terrible, you can’t say it’s terrific.”
So if you’re a blogger and excited that a new face cream seems to have made your pimples disappear, you still can’t say “this product cures acne!” unless the advertiser makes its own claims about the cream’s ability to cure skin conditions, or you asked the advertiser whether there is substantiation for the claim. Making this excited statement without substantiation can have you, the blogger, on the hook for the false statements.
Embedded within each section of the FAQs are examples of proper, sufficient disclosure language, as well as statements that are not enough. Some examples:
|“I’m a paid consultant to the marketers of XYZ Company”||“#client” or “#advisor” or “#consultant”|
|“I work with XYZ brand”(where XYZ is a brand name)||#ambassador|
|#ad[XYZ Company]||#Thanks XYZ company!|
|“#XYZ-Ambassador”||A blanket disclosure “many of the products I discuss on this site are provided to me free by their manufacturers.”|
|“I received this product for free from XYZ company”||Hyperlink or button that states “DISCLOSURE” or “LEGAL.”|
|“XYZ Resort paid for my trip” or “Thanks to XYZ Resort for the free trip.||Disclosure after the “click more…”|
|“#contestXYZ” or “#sweepstakesXYZ”||“XYZ is the best!”|
Finally, many companies now use a network of social media influencers and bloggers to promote products. While the actions of these influencers can feel out of a company’s control, the FTC has made clear that the company itself is responsible for any comments those influencers/bloggers make in relation to its products. The FTC therefore recommends that advertisers and companies have reasonable programs in place to train and monitor members of their network. “The scope of the program depends on the risk that deceptive practices by network participants could cause consumers harm – either physical injury or financial loss. For example, a network devoted to the sale of health products may require more supervision than a network promoting, say, a new fashion line.” According to the FTC, these are some elements every program should include:
- Given an advertiser’s responsibility for substantiating objective product claims, explain to members of your network what they can (and can’t) say about the products – for example, a list of the health claims they can make for your products, along with instructions not to go beyond those claims.
- Clearly instruct members of the network on their responsibilities for disclosing their connections to you. Consider obtaining a signed statement of responsibility from the influencer agreeing to comply.
- Review endorsements before they are posted to confirm that they comply with your Company’s guidelines.
- Periodically search for what the influencers you work with are saying and to confirm that the disclosures are actually clear and conspicuous.
- Follow up with the influencers you work with if you identify non-compliant practices. Terminate your relationship those who do not comply with your requests to make changes to their disclosure practices or claims.
As the FTC continues to nimbly adapt to quickly changing technology, the FTC’s FAQs are thorough, and even welcome further questions. We encourage any company relying on the dissemination of online opinions about their products – whether through their own employees, hired influencers, or loyal customers who receive free products – to familiarize themselves with the FTC Endorsement Guides and the latest FAQs. It will save a lot of #headaches in the future.