New Federal Trade Commission Proposed Rules on Blogger Product Endorsements: What brands and bloggers need to know

Hello!

Welcome Back! The Federal Trade Commission recently released proposed changes to their Consumer Product Testimonial and Endorsement Rules. They are:


An advertisement containing a consumer endorsement about the performance of an advertised product or service must reflect the actual performance of the product or service. Essentially the advertiser must have sufficient evidence, if applicable, competent and scientific evidence, to verify that the consumer endorsement is correct. Sec. 255.2(a)

In addition, the consumer endorsement must be representative of the results consumers would generally achieve. The endorsement can not be an atypical result. Advertisers must also have sufficient evidence to support general results.

These proposed changes do not apply to highly subjective testimonials for certain products such as movies, games, or restaurants. But if the advertiser is paying the consumer endorser to endorse the product, then the above rules do apply.

Most importantly, if an advertiser is paying a consumer to endorse a product with cash or free products, then the advertiser and the consumer must disclose the financial relationship. If not, both advertiser and consumer may be held liable for making false statements.

HOW DOES THESE RULES AFFECT BLOGGERS AND ADVERTISERS IN NEW MEDIA?

In the new proposed rules, The Federal Trade Commission also addressed advertising in new media (Web 2.0). Essentially, if an advertiser pays a blogger to write a review endorsing a product or service, the advertiser and the blogger must disclose the financial relationship. In addition, both blogger and advertiser both will be liable for any false or unsubstantiated claims regarding results of products or services.

WHAT CAN ADVERTISERS AND BLOGGERS DO TO AVOID LIABILITY?

1. When using bloggers to endorse product or services, advertisers should make certain that their products do what they claim. Advertisers should extensively test products, run trials, and document evidence that substantiate results for most users of the product or service.

2. Advertisers should provide data to bloggers that evidence typical results for most individuals. Advertisers should stress to bloggers that if the product does not produce the desired results as documented, do not write a favorable review.

3. Advertiser should include disclaimers on consumer endorsements that state that results are typical of most individuals using the products. However, if a consumer achieves an unfavorable result, it is atypical and may be based on a variety of personal factors unknown to the advertisers.

4. When writing a favorable review or endorsement of a product, bloggers should always disclose they received the product for free or was paid to write the review.

5. Bloggers should always give their true opinion of the product whether paid or not.

6. Bloggers should post any product disclaimers and company trials or evidence substantiating their review of the product.

Although the proposed rules have yet to be adopted, I think the above tips are great practices for advertisers and bloggers. The Commission may not adopt all of the rules, but considering the explosion of new media, regulation is inevitable.

I welcome your thoughts!