New FTC Guidelines Takes Effect

By December 4th, 2009 Leave a response Blogging, Business, The Net

I received an email from Azoogle Ads letting me know that the new FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising went into effect on December 1st. Everyone should take note because this will affect your business.

The Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “Guides”) focus specifically on online marketing. The Guides address all “endorsements” i.e., advertising messages which may be understood as the opinion of someone other than the sponsoring advertiser, from the perspective of consumers. All messages of this type, regardless of whether they originate from consumers, celebrities, groups or organizations, are all classified as endorsements.

The Guides state that:

  • Endorsements must reflect the honest opinions and true experience of the endorser. If paid actors are used, this fact must be disclosed.
  • Endorsements may not contain any representations which would be deceptive, or could not be substantiated, if made directly by the advertiser.
  • Endorsements must be representative of what consumers can reasonably expect to achieve. Any claim made by the endorser must reflect the opinion or experience of a significant proportion of consumers. Disclaimers like “results not typical” are no longer sufficient.
  • All material connections between the advertiser and the endorser (including research or medical organizations) that consumers would not expect must be disclosed, including free products or monetary compensation.

The Guides will likely lead to increased enforcement by the FTC and the state Attorneys General. The full text of the Guides may be found here.

What Does This Mean To You?

For many bloggers, these new guidelines won’t change the way you do business. Most sponsored post networks required disclosure before the new FTC rules. Also, the FTC only operates in the US. If you don’t have any offices or servers on US soil, it’ll be pretty hard for the FTC to come after you for guidelines violations. The easiest way to comply with the rules is to have a very clear disclosure policy.