In early October 2009, the Federal Trade Commission released its final changes to the Guides Concerning the Use of Endorsements and Testimonials in Advertising (Guide). The Guide, which was last updated in 1980, provides critical administrative interpretations by the FTC to promote advertiser compliance with the Federal Trade Commission Act (FTC Act) and other consumer protection laws.
Notable highlights in the revised Guide include:
- “Disclaimers of Typicality”: Advertisers will no longer be protected by disclaimers like "results not typical" where the testimonial experience is not typical of what a consumer should expect. Rather, an advertiser must conspicuously disclose results that consumers can generally expect.
- Celebrity Endorsements: Endorsers, including celebrities, can be liable for false or unsubstantiated claims made in the endorsements that they provide.
- Blogs and Other Advertising Forums: Traditional print, radio and television spots are not the only place advertising is found. Endorsements can also appear on Internet blogs, in programming content (example: interviews on a talk show), "word of mouth" advertising and any number of other communications made to the public. Where an endorser has a material connection to the product or service endorsed, that connection may need to be disclosed.
- Material Connections: Endorsers must disclose consideration received from an advertiser, such as cash payments, free product or other in-kind payment, in contexts where a consumer would not necessarily expect a connection to exist between the endorser and an advertiser — such as talk shows, Internet blogs or social networking sites.
- Research Organizations: Research is often cited in advertising to build support and acceptance of a product or service. If the research was sponsored by the advertiser, that connection may need to be disclosed.
While the FTC Act has not changed, the revised Guide could be a warning shot to advertisers utilizing creative advertising approaches (example: product mentions within programming content) or newer communication outlets (example: Internet blogs and Facebook) to build momentum and recognition of a product or service. Likewise, endorsers (whether a famous athlete or basement blogger) should understand the revised Guide and consider the motivation behind and accuracy of any claims within their endorsements — particularly given that an endorser can be held liable if endorsement claims are false or unsubstantiated.
Advertisers have always needed a reasonable basis in fact for making product or service claims. It is now equally clear that the influences behind endorsements, whether they are made by researchers, celebrities or commoners and wherever they appear, are significant and may need to be disclosed in order to fully inform the ultimate target of the advertising — consumers.