The Federal Trade Commission’s revised regulations regarding advertisements and endorsements, although generally focused on celebrity and expert endorsements on television and radio, can have a very real impact on affiliate marketers, as blog and website endorsements do fall under the new rules. To avoid incurring liability, it’s important that you, as someone in the online marketing business, familiarize yourself with these rules, which can be found at:
www.ftc.gov/os/2009/10/091005revisedendorsementguides.pdf.
Here are some excerpts from the new legislation, what they mean, and the impact they may have on you and your online marketing strategies:
“A skin care products advertiser participates in a blog advertising service. The service matches up advertisers with bloggers who will promote the advertiser’s products on their personal blogs. The advertiser requests that a blogger try a new body lotion and write a review of the product on her blog. Although the advertiser does not make any specific claims about the lotion’s ability to cure skin conditions and the blogger does not ask the advertiser whether there is substantiation for the claim, in her review the blogger writes that the lotion cures eczema and recommends the product to her blog readers who suffer from this condition. The advertiser is subject to liability for misleading or unsubstantiated representations made through the blogger’s endorsement. The blogger also is subject to liability for misleading or unsubstantiated representations made in the course of her endorsement. The blogger is also liable if she fails to disclose clearly and conspicuously that she is being paid for her services.”
Meaning, in essence, that if you get a blogger to promote and comment on your product, you are still responsible for what they say. If your blogger or other affiliate gets conversions to your site under false pretenses, you and that entity are both legally responsible.
“In order to limit its potential liability, the advertiser should ensure that the advertising service provides guidance and training to its bloggers concerning the need to ensure that statements they make are truthful and substantiated. The advertiser should also monitor bloggers who are being paid to promote its products and take steps necessary to halt the continued publication of deceptive representations when they are discovered.”
An extension of the previous statement. You or your affiliate network manager need to make it very clear to affiliates that they cannot misrepresent your product in order to make sales and you need to take steps to make sure that this does not happen. If it does, YOU are responsible.
“An ad for an acne treatment features a dermatologist who claims that the product is clinically proven to work. Before giving the endorsement, she received a write up of the clinical study in question, which indicates flaws in the design and conduct of the study that are so serious that they preclude any conclusions about the efficacy of the product. The dermatologist is subject to liability for the false statements she made in the advertisement. The advertiser is also liable for misrepresentations made through the endorsement.”
The same idea, but involving experts. If you’ve got an expert who will make a claim in favor of your product, great. But if you know that expert does not truly believe in the claims or the evidence backing up those claims, you are in violation of FTC rules.
“An advertisement containing an endorsement relating the experience of one or more consumers on a central or key attribute of the product or service also will likely be interpreted as representing that the endorser’s experience is representative of what consumers will generally achieve with the advertised product or service…Therefore, an advertiser should possess and rely upon adequate substantiation for this representation….the advertisement should clearly and conspicuously disclose the generally expected performance in the depicted circumstances”
In other words, an endorsement or testimonial that does not reflect the true value of the product cannot be protected with the claim “results not typical” or “your results may vary” or any other such disclaimer. If an endorser or a testimonial suggests a result that cannot be substantiated is common, this fact must be very clearly and conspicuously detailed in the advertisement or testimonial.
“Advertisements presenting endorsements by what are represented, directly or by implication, to be “actual consumers,” should utilize actual consumers… or clearly and conspicuously disclose that the persons in such advertisements are not actual consumers of the advertised product.”
Translation: no fake testimonials from made up people claiming to have used the product for their own personal needs.
“Whenever there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e. the connection is not reasonably expected by the audience), such connection must be fully disclosed.”
If you have a dermatologist who says that Miracle Pill improves skin tone, you do not have to disclose that you paid this individual for his or her endorsement, as that can be reasonably expected by a consumer. However, if the dermatologist is a shareholder in the company that makes Miracle Pill, that is a connection beyond what would be thought of as standard, and must be conspicuously disclosed. Similarly, if you have an independent blog where you taut the merits of a product that you manufacture and sell, you must disclose that you do in fact manufacture and sell said product.
These rules are put into place to protect the consumer from deception, and so most legitimate online advertisers shouldn’t have any problems. However, miscommunication and misunderstandings can happen, and if left unchecked, could lead to unwitting violations. Make the effort to go over your endorsements and testimonials to make sure you are in compliance. It could take some time, but could save you from big headaches later.
