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Endorsement guides 082810
 

Endorsement guides 082810

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    Endorsement guides 082810 Endorsement guides 082810 Presentation Transcript

    • International Food Blogger Conference August 27-29, 2010 Seattle, Washington Current Issues with the FTC’s Endorsement Guides Presented by Bob Schroeder Director, Northwest Regional Office Federal Trade Commission
      • Section 5 of the FTC Act broadly prohibits “unfair or deceptive acts or practices in commerce”
      • The Endorsement Guides explain how Section 5 applies when endorsements and testimonials are used in advertising, to make it easier for advertisers to comply with Section 5
        • The Guides aren’t law, and they don’t change the law or anyone’s responsibilities under the law
        • There are no fines for violating the Guides
        • If FTC challenges practices inconsistent with the Guides, the FTC still has to prove a violation of Section 5
      Endorsement Guides
    • What Is an Endorsement?
      • An advertising message that consumers perceive to represent the personal views of a speaker other than the sponsoring advertiser
        • If there’s not a sponsoring advertiser, there’s no endorsement under the Guides
    • The Revised Guides: Principal Changes
      • Requiring disclosure when advertiser has paid for study touted in ad
      • Deletion of “results not typical” safe harbor
      • Addition of examples of disclosing material connections in social media marketing
    • Material Connections Between Advertisers & Endorsers
      • When an advertiser and an endorser have a relationship that the audience wouldn’t reasonably expect (a “material connection”), relationship should be disclosed
      • Examples of such connections include:
        • Seller is compensating endorser
        • Endorser is employee or business associate of seller
        • Endorser is related to seller
    • Financial Ties -- Context Matters
      • Financial tie between seller and endorser should be disclosed, unless the tie is clear from the context
      • If audience reading product review article or visiting product review website/blog understands that the reviewer didn’t buy the products he’s reviewing, disclosure isn’t needed to avoid deception
    • Celebrity Endorsers
      • In conventional ads, it’s not necessary for an ad to disclose that a celebrity is being paid, because in that context payment would be understood
      • Outside of conventional ads (on talk shows, social networking sites): the relationship with the advertiser should be disclosed when a celebrity talks up a product because payment isn’t obvious in that context
    • How Should Material Connections Be Effectively Disclosed?
      • Disclosure should be part of the message so it can’t be missed. E.g.:
        • Acme Co. provided this product
        • XYZ Co. sent me to Adventureland to experience its theme park
        • On Twitter: #paid, #ad
      • Word of Mouth Marketing Ass’n: Social Media Marketing Disclosure Guide
    • When Is Marketer Liable for Endorser’s Statement?
      • If endorser makes false or unsubstantiated claims for product, advertiser is potentially liable. To limit potential liability:
        • Advertiser should ensure its endorsers receive guidance/training re need to ensure statements are truthful/substantiated
        • Advertiser should monitor sponsored bloggers/brand ambassadors and take steps to halt continued publication of deceptive claims when discovered
    • FTC Enforcement
      • FTC has several endorsement-related investigations underway (non-public)
      • Investigations are focusing on marketers
      • Issues include:
        • positive reviews posted on message boards, review sites by employees or affiliates w/o disclosure of relationship
        • positive reviews by compensated bloggers w/o disclosure of compensation
    • Points to Remember
      • Consumers need to know when they’re being pitched a product – advertising should be identifiable as advertising
      • Disclose unexpected material connections
      • Policy and training will be essential – and make sure message reaches agencies/p.r. firms used
      • Both advertisers and consumer endorsers being sponsored by the advertiser are potentially liable, but:
      • FTC enforcement will focus on advertisers and will look to see if reasonable policies are in place
    • Federal Trade Commission
      • For more information, visit www.ftc.gov
      • Send questions to [email_address]