At 81 pages long, the recent FTC Guidelines on Endorsements and Testimonials (and blogger outreach programs) has gained a lot of great attention with a few thoughtful distillations of those 81 pages. Via WOMMA, we were involved when they were first posted for comment. It's great that WOMMA was cited so many times (more than any other organization?) for our best practices. It supports my biased opinion (disclosure: I am Board President at WOMMA) that WOMMA is really the best organization to help guide( and protect brands and marketers who need to operate social media marketing and communications programs).
There is nothing in the final draft that surprises me.As posted earlier, your bets strategy overall is to support a policy of full disclosure by both marketers and influencer to stay both within the spirit and "rule" of teh Guidelines. This is easy for WOMMA members as our own best practice and ethics policies wrote the book on disclosure.
Still, after a careful read here are 3 big areas that warrant all of our attention:
The Definition of "Sponsored"
I am not nuts about the use of the term "sponsored" by the FTC but I understand why they did it. If you send out a free sample of cookie dough to mombloggers to try the dough and post about if they wish, there are circumstances that would qualify this as sponsorship (e.g. do they regularly receive product to review or does the value of the product exceeds some threshold (not named)). I don't want to get hung up on a word as I do agree that the marketer and blogger should simply reveal that they recieved the cookie dough.
One main reason I am not thrilled with the word "sponsor" is the expectation it breeds on the brand side. "Sponsorship" usually comes with a formal quid pro quo where the marketer gets as much value from the compensated exchange as possible. They don't pay for a chance that their banner shows up on the conference wall. That is part of the package. With most influencer engagements, marketers are providing product experiences hoping that the influencer/blogger will write about that experience. But there is no contract that they will write anything let alone something positive. The pressure is largely on the marketer's side to provide a literally "remarkable" experience. The intent of the FTC is clear and I can see no problem with their desire to have influencers be extra careful about diclosing any material relationship they have with marketers and letting their followers judge their credibility. Remember, the FTC is not trying to prevent endorsments. They are trying to enforce or motivate full disclosure.
"whether the speaker is compensated by the advertiser or its agent; whether the product or service in question was provided for free by the advertiser; the terms of any agreement; the length of the relationship; the previous receipt of products or services from the same or similar advertisers, or the likelihood of future receipt of such products or services; and the value of the items or services received. An advertiser's lack of control over the specific statement made via these new forms of consumer-generated media would not automatically disqualify that statement from being deemed an "endorsement" within the meaning of the Guides. Again, the issue is whether the consumer-generated statement can be considered "sponsored.""
Liability of Endorsers
If we engage influencers/bloggers to experience a product or service in the hopes that they will find it worthwhile to share about, we bear some responsibility for what they say most clearly in the claims of product efficacy. The example the FTC uses here is a healthcare claim which is probably the most urgent context as no one wants to see consumers mislead around their health because the context wasn't clear. As Ogilvy has "terms of engagement" for ourselves and those influencers who choose to participate in programs with our brands I am not concerned that the FTC points about liability change much. Our terms require participants to disclose the material relationship, emphasize that their POV is their opinion and make no broad claims of efficacy.
"Nonetheless, if the advertiser initiated the process that led to these endorsements being made - e.g., by providing products to well-known bloggers or to endorsers enrolled in word of mouth marketing programs - it potentially is liable for misleading statements made by those consumers....The Commission is revising new Example 5, however, to clarify that both the advertiser and the blogger are subject to liability for misleading or unsubstantiated representations made in the course of the blogger's endorsement."
Disclosure of Material Connections Between Advertisers and Endorsers
Both the marketer and the endorser (i.e. influencer/blogger) are responsible to disclose.
"...the Commission believes that the endorser is the party primarily responsible for
disclosing material connections with the advertiser. However, advertisers who sponsor these
endorsers (either by providing free products - directly or through a middleman - or otherwise) in order to generate positive word of mouth and spur sales should establish procedures to advise
endorsers that they should make the necessary disclosures and to monitor the conduct of those
endorsers"
Again,based upon our own best practice this is not a challenge. The trick may be the new requirement to monitor and presumably take action should an endorser not fully disclose as promised. Splitting hairs about whether a particular influencer program qualifies as endorsement or "sponsorship" in the FTC's eyes is not time well spent. If you refer to their definition above for "sponsorship" your best bet is to diclose everything and require disclosure of all of the folks you engage with. The big question remains not how you monitor (that part is easy and we all do it anyhow) but how you enforce a certain disclosure behavior with influencers you have no contract or obligation with. The action they are looking for is some effort to remind the influencer/blogger to properly disclose and then ceasing working with that blogger should they not follow through.
Here is how they frame that issue up:
"the manufacturer has an obligation to advise the blogger at the time it provides the gaming system that he should make the disclosure in any positive reviews of the system. The manufacturer also should have procedures in place to attempt to monitor the blogger's statements about the system to ensure that the proper disclosures are being made and take appropriate steps if they are not (e.g., cease providing free product to that individual)."
Those are the big concepts that affact us on a day to day basis. Again, they are very much aligned with current best practices for marketers like WOMMA members.
other issues covered in the Guidelines:
Celebrity Endorsements: More should be written about a new best practice related to celebrity endorsements. One thing is clear, these guides will motivate celebrities (or their "people") to better understand the claims they may be relating in a script.
Testimonials Reflecting Non-typical Consumer Experiences: Again more shoudl be explored here to interpret the effect of the Guides on marketers. It is clear that the new guideliens remove teh "safe harbor" clause that allows marketers to state "results not typical" when making claims. Claims must be typical. But even here, the FTC allows some wiggle room, "Although the Commission is, admittedly, skeptical that most disclaimers of typicality will be effective in preventing deception, Section 255.2 does not rule out the possibility that a clear, conspicuous, and informative disclaimer could accomplish this goal."
Expert Endorsements: A bigger topic yet one point is that their expertise should be brought to bear upon evaluating the product performance.
Endorsements by Organizations: The goal seems to be that the majority of an organization supports the endorsement.
Some important definitions
According to the FTC Guidelines, here is how they define "endorsement" and "endorser:"
"For purposes of this part, an endorsement means any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or otheridentifying personal characteristics of an individual or the name or seal of an organization) that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser. The party whose opinions, beliefs, findings, or experience the message appears to reflect will be called the endorser and may be an individual, group, or
institution.""Endorsements must reflect the honest opinions, findings, beliefs, or experience of the endorser. Furthermore, an endorsement may not convey any express or implied representation that would be deceptive if made directly by the advertiser. [See §§ 255.2(a) and (b)regarding substantiation of representations conveyed by consumer endorsements."
To really dig in to this issue, attend the WOMMA Summit in November where we will have the FTC on hand to participate in a discussion about the nuances and details of the guidleines. (Register now and use code "fanofOgilvy" to recieve a discount on the registration fee.)
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