FTC tightens endorsement rules


There is less room to maneuver now for anybody attempting to endorse a product or service for pay, and new media has been roped into the FTC’s new guidelines for endorsement advertising.

Any endorser who is being compensated either via cash or other valuable consideration must make that relationship known to stay within FTC guidelines. This includes bloggers and word-of-mouth advertisers.

The changes are detailed in the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, which received their first makeover since 1980, when blogging was unheard of.

Another change is that any claims made by an endorser must be within the realm of what an average user of a product of service can expect. In the past, a disclaimer could be added to account for an exceptional result, but now that is no longer the case.

In the case of celebrity endorsers, they also need to be careful about what claims they make. The FTC has taken pains to make it clear that both the advertiser and the endorser may be liable for false or unsubstantiated claims, or for failure to make clear their relationship to one another.

At least one retail group has indicated it is cool with the new rules. Julie Coons, president and CEO of the Electronic Retailing Association (ERA), said, “We appreciate the FTC’s responsiveness to the concerns of ERA, business groups and the advertising communities, and also in clarifying their position on the net impression standard. Like the

FTC, ERA fully supports enforcement against businesses and individuals that cut corners, and jeopardize the healthy and vibrant $300 billion electronic retailing sector. As leaders in self-regulation, we look forward to partnering with the FTC to ensure the relevant communities are educated and fully able to comply before they become involved in costly legal challenges.”

RBR-TVBR observation: Former FCC Commissioner Jonathan Adelstein would love this – he was the go-to commissioner when it came to pay-for-say and other advertising issues. With the FTC on the job, perhaps the FCC will concentrate on other matters.