A good marketing department knows how to generate product “buzz” by leveraging external influencers and promotions. The challenge for the company is to avoid being stung by the FTC’s recently published Endorsement Guides (the “Guides”), or older regulations.
Influencers can be consumers, bloggers, celebrities, or really anyone with a large following on social media networks. Promotions can include, for example, campaigns aimed at getting consumers’ friends to like a product, giving free product samples to influential bloggers, email “send to a friend” campaigns, Twitter campaigns that promise a $1,000 gift certificate for the most re-tweets, and some “Like Us” campaigns.
At its core, the Guides continue to reflect the basic truth-in-advertising principle relevant to all advertisements, endorsements, and many viral and guerilla marketing campaigns. While the Guides and Section 5 of the FTC Act can be lengthy and confusing, here are six key things to keep in mind:
- The FTC’s rules apply to everyone in your network: your company, public relations and advertising firms, and even the influencers (bloggers and even consumers themselves). Each one can potentially be liable for violations of the FTC Act. If you are unsure, consult with a lawyer, and perhaps apply the “better safe than sorry” rules regarding disclosures.
- Disclosures should be simple and straightforward. A statement such as “Company X gave me this product to try…” will usually be effective. Also likely effective: “Sponsored,” “Promotion,” “Paid Ad” or even #ad (at the beginning of a tweet).
- If a blogger, reviewer, or other influencer receives some benefit, no matter how small, the benefit must be disclosed. This includes money, but can also be a free sample, a deep discount, a free meal, or another intangible such as goodwill from a family member or good friend. As in all good journalism, a conflict of interest must be disclosed.
- If an ad or promotion mentions an extraordinary result, the extraordinary nature of the result should be disclosed. For example, if Bill lost 10 pounds in one week by using product X, but the expected result is 1 pound per week, whoever is talking about Bill’s weight loss should also say “results not typical.”
- The “whole” truth still matters. Influencers should not talk about a great experience with a product they did not use, or that they actually disliked.
- “Free” and “money back” can be very expensive words to use in online advertising. If there are free products or risk-free trials, you must also provide detailed, clear, and very conspicuous disclosures of all the material terms and conditions that apply to the offer.
Lawyers at McCarter & English, LLP continue to monitor the space for updates in this rapidly evolving area of the law. We give our thanks to summer associate Cristián Ossa for his assistance with this client alert.
If you would like additional information on this topic, please contact a member of the Intellectual Property practice or your lawyer at McCarter & English, LLP.