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Posted on 06.30.2015

Does the FTC Act Apply to You? You Might Be Surprised.

Do you use endorsements in your marketing efforts? Are you an ambassador of a brand? Before you say “no,” think about the new ways in which “endorsement” may translate in today’s world of ubiquitous social media.

The Federal Trade Commission recently updated its plain language guidelines on endorsements, which apply to social media, videos, bloggers and even PR pros. The FTC states, “Truth in advertising is important in all media, whether they have been around for decades (like, television and magazines) or are relatively new (like, blogs and social media).” Here are a few high points from the FTC’s guidance.

Likes and shares

 

Many social networking sites allow you to share your interests with friends and followers by clicking a button or sharing a link to show you’re a fan of a particular business, product, website or service. If you write about how much you like something and you’re not being rewarded, you don’t have to worry. However, if you’re being compensated by the product or organization, a disclosure is appropriate under the FTC Act. A simple disclosure like “Company X gave me this product to try . . . .” will usually be effective. And if you’re a company sending samples or perks to bloggers or others in hopes of a positive online commentary, remember that the recipient needs to disclose the relationship.

When character(s) count

What about tweets, where you’re limited to a precious few 140 characters? How do you make a disclosure then? The FTC has confidence in your ability to pull it off. The words “sponsored” and “promotion” each requires only nine characters, and “paid ad” uses only seven. Even simply starting your tweet with “#ad” would likely work, requiring the sacrifice of just a measly three characters.

Do you know who likes your organization?

Believe it or not, some advertisers buy fake “likes,” which is very different in the eyes of the FTC from an advertiser offering incentives for “likes” from actual consumers. If your organization’s likes are from non-existent people or people who have no experience using the product or service, the FTC defines that as being clearly deceptive, and both the purchaser and the seller of fake “likes” could face enforcement action.

Are you an ambassador?

You are an ambassador if you’ve been hired (or in any way compensated, even just with products) by an organization to promote its product or event and you’re endorsing it in your tweets. The FTC says your audience has the right to know about your relationship, and a disclosure on your profile page isn’t sufficient because many people in your audience probably won’t see it. The FTC does recognize the difference between providing facts, such as “the event begins at noon and ends at 5 pm,” and an endorsement, however.

What’s a picture worth?

If you share social media posts about products you use and you have a relationship with that advertiser, the FTC Act applies to you. In fact, simply posting a picture of a product on Pinterest or a video of you using the product could convey that you like and approve of the product. And that’s an endorsement. You don’t have to use words to convey a positive message, and if you have a relationship with the producer of the product, you should disclose it.

Speaking of video…

If you should post a video that conveys an endorsement for the product or service of an advertiser with which you have a relationship, simply adding a disclosure at the end of the video doesn’t cut it because it could be missed if someone doesn’t watch the entire video. Placing your disclosure at the beginning would be better, but best of all in the eyes of the FTC would be multiple disclosures during the video. And no one should promote a link to your review that bypasses or skips over the disclosure.

Bloggers beware!

The FTC Act applies to you, too! If you receive free products or other perks with the expectation you’ll discuss or promote the advertiser’s products in your blog, you are expected to disclose the financial arrangement between yourself and the advertiser. Even if you receive no payment or incentive, acceptance of the free product alone is enough to require disclosure unless everyone receives the product for free. For example, if you have a website that reviews local restaurants and the restaurant gives you free meals, you should let your readers know – unless the restaurant provides free meals to all its diners. (Not likely!) Your disclosure helps readers decide how much weight to then give your review.

PR pros, too!

What about employees of an ad agency or public relations firm? Can employees of the firm be asked to spread the buzz about a client’s products? The FTC says that first, no agency or company should ask its employees to say anything that isn’t true (which is a pretty sound position to take). Further, no employee should endorse a product they haven’t used or say things they don’t believe, and no employer should encourage its employees to do so. But to answer the question, agencies asking their employees to spread the word about a client’s product or services via social media must instruct those employees about their responsibilities to disclose the relationship between their employer and the client.

There’s a lot to digest and understand about the FTC Act and social media. Does any of this surprise you? Do you understand how these guidelines are important to the FTC’s mission to protect America’s consumers? 

To learn more, check out the FTC’s plain language Endorsement Guides for yourself.

 

Dana Coleman is a Vice President at Lovell Communications. You can view more of Dana’s blogs here. Connect with Dana at Dana@lovell.com or @lovelldc

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