Analyzing the FTC’s Endorsement Guide

October 10, 2017

 

The do’s and don’t’s for brands, ambassadors and influencers
 

“If there’s a connection between an endorser and the marketer that consumers would not expect and it would affect how consumers evaluate the endorsement, that connection should be disclosed.”

 

This is the statement that has many brands, their ambassadors and influencers scratching their heads right now wondering, what do I have to disclose to my fans/followers, where do I have to put the disclosure and what does it need to say. We’ve been doing our research the past few weeks on this subject after it was brought to our attention that the FTC is cracking down on social media influencers and bloggers on paid and product sponsorships. After reading through the pages and pages of what the FTC considers endorsements and the many ways to disclose it, we wanted to narrow it down to the relevant topics for our clients and our brand ambassadors.

 

Q. What do I have to disclose?

 

A. If you have been paid or given something of value to tout a brand’s product, you must disclose this in your social media post, You Tube video, Snapchat or Instagram Story and blog. The reason is obvious: Knowing about the connection is important information for anyone evaluating the endorsement.

 

Q. Is there special wording I have to use to make the disclosure?


A. No. The point is to give readers the essential information. One factor the FTC will look to is placement. The disclosure should catch users’ attention and be placed where they aren’t likely to miss it. It should also be clear and easy to read. A simple disclosure like “Company X gave me this product to try . . . .”, “Thanks XYZ for the free product” or “Thanks XYZ for the gift of ABC product” will usually be effective, or using #AD, #sponsoredpost or #sponsored. If it is in a blog, it will need to mention it at the beginning of the blog. When posting on social media, it doesn’t have to be the beginning of the post but has to be within the first few lines (i.e. on Instagram, it has to be in the first 3 lines, it cannot be below the line where it says ‘more’). On You Tube or in a video review it needs to be at the start of the video, and you might say, “The products I’m going to use in this video were given to me by their manufacturers.”, you can’t just put it in the disclosure below the video. That gives the necessary heads-up to your viewers.

 

Q. How can I make a disclosure on Snapchat or in Instagram Stories?


A. You can superimpose a disclosure on Snapchat or Instagram Stories just as you can superimpose any other words over the images on those platforms. The disclosure should be easy to notice and read in the time that your followers have to look at the image. In determining whether your disclosure passes muster, factors you should consider include how much time you give your followers to look at the image, how much competing text there is to read, how large the disclosure is, and how well it contrasts against the image. (You might want to have a solid background behind the disclosure.) Keep in mind that if your post includes video and you include an audio disclosure, many users of those platforms watch videos without sound, so they won’t hear an audio-only disclosure. Obviously, other general disclosure guidance would also apply.

 

Q. Would “#ambassador” or “#[BRAND]-Ambassador” work in a tweet?


A. The use of “#ambassador” is ambiguous and confusing. Many consumers are unlikely to know what it means. By contrast, “#XYZ-Ambassador” will likely be more understandable (where XYZ is a brand name). However, even if the language is understandable, a disclosure also must be prominent so it will be noticed and read.

 

Q. What about having our ambassadors post ‘customer reviews’ of the products we sell on our website? We ask our ambassadors to share their reviews on the site to help others with their purchasing decisions. Do we need to disclose this?


A. Yes. Knowing that reviewers got the product they reviewed for free would probably affect the weight your customers give to the reviews, even if you didn’t intend for that to happen. And even assuming the reviewers in your program are unbiased, your customers have the right to know which reviewers were given products for free. It’s also possible that the reviewers may wonder whether your company would stop sending them products if they wrote several negative reviews – despite your assurances that you only want their honest opinions – and that could affect their reviews. Also, reviewers given free products might give the products higher ratings on a scale like the number of stars than reviewers who bought the products. If that’s the case, consumers may be misled if they just look at inflated average ratings rather than reading individual reviews with disclosures. Therefore, if you give free products to reviewers you should disclose next to any average or other summary rating that it includes reviewers who were given free products.

 

Q. One of our company’s paid spokespersons is an expert who appears on news and talk shows promoting our product, sometimes along with other products she recommends based on her expertise. Your Guides give an example of a celebrity spokesperson appearing on a talk show and recommend that the celebrity disclose her connection to the company she is promoting. Does that principle also apply to expert endorsers?


A.Yes, it does. Your spokesperson should disclose her connection when promoting your products outside of traditional advertising media (in other words, on programming that consumers won’t recognize as paid advertising). The same guidance also would apply to comments by the expert in her blog or on her website.

 

Q. We want to run ads featuring endorsements from consumers who achieved the best results with our company’s product. Can we do that?


A. Testimonials claiming specific results usually will be interpreted to mean that the endorser’s experience reflects what others can also expect. Statements like “Results not typical” or “Individual results may vary” won’t change that interpretation. That leaves advertisers with two choices:

1. Have adequate proof to back up the claim that the results shown in the ad are typical, or

2. Clearly and conspicuously disclose the generally expected performance in the circumstances shown in the ad.

 

These are just a few highlights from the FTC article. If you have specific questions regarding how your brand is being promoted by ambassadors, influencers, etc. or how we are monitoring the use of disclosures, please feel free to email us with your questions.

 

*Information pulled from www.ftc.gov The FTC’s Endorsement Guides: What People Are Asking

 

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