Effective Dec. 1, the Federal Trade Commission (FTC) adopted a revised Endorsement and Testimonial Guides, the first significant change to its guidelines on endorsements and testimonials since 1980 - an action primarily motivated by the rise of social media marketing. Brunner provided us with the summary of the FTC’s new guidelines:
1. The crux of the revisions is about disclosure and transparency. Plainly, it is illegal for any individuals who are paid by a marketer (agency, company or other third‐party associate) to promote or endorse that marketer’s products or services via any social media platform to do so without disclosing their financial relationship with that marketer. Compensation includes receipt of free product. Brunner has always counseled our clients to be transparent regarding their social media outreach efforts and to require disclosure by individuals being compensated. Our advice to clients does not change based on this aspect of the revised FTC Guides; however, the revisions provide additional mandates that do require further guidance.
2. Marketers are liable for non‐disclosure by endorsers as well as misleading or unsubstantiated claims endorsers may publish. Brunner recommends that clients educate all of their endorsers on the new FTC guidelines. Furthermore, clients must improve their monitoring efforts of all endorsers across all forms of social media. Assertions that monitoring cannot be conducted or is cost‐prohibitive will not be accepted by the FTC. Many monitoring tools exist at a reasonable cost and Brunner utilizes them daily for clients. Note: If a company does not have a material connection with an endorser, monitoring is not required
3. When it comes to misleading or unsubstantiated statements by an endorser specifically, marketers must demonstrate that they have made efforts to correct the false information. Brunner advises clients to create a tiered action plan to correct false statements made by endorsers. Possible escalated steps in such an action plan may include:
- Asking the endorser to remove the false information or to issue a correction or retraction statement.
- Commenting directly on the endorsers’ blog, forum comment, Twitter page, Facebook Wall, etc. and correcting the false statement.
- Identifying the endorser and correcting the false statement on your own social media properties. In addition, documenting all efforts is imperative.
4. Disclosure of material connections includes employees of the marketer (agency, company, or other third‐party associate). The following example was provided in the revised Guides: An online message board designated for discussions of new music download technology is frequented by MP3 player enthusiasts. They exchange information about new products, utilities, and the functionality of numerous playback devices. Unbeknownst to the message board community, an employee of a leading playback device manufacturer has been posting messages on the discussion board promoting the manufacturer’s product. Knowledge of this poster’s employment likely would affect the weight or credibility of her endorsement. Therefore, the poster should clearly and conspicuously disclose her relationship to the manufacturer to members and readers of the message board. Brunner recommends that all clients have social media policies and training programs in place for employees that require them to disclose their status as an employee when making endorsements in social media.