A little bit about a lot
TABLE OF CONTENTS:
About the Endorsement Guides
When Does the FTC Act Apply to Endorsements?
Product Placements
Endorsements by Individuals on Social Networking Sites
How Should I Disclose That I Was Given Something for My Endorsement?
Other Things for Endorsers to Know
Social Media Contests
Online Review Programs
Soliciting Endorsements
What Are an Advertiser's Responsibilities for What Others Say in Social Media?
What About Intermediaries?
What About Affiliate or Network Marketing?
Expert Endorsers Making Claims Outside of Traditional Advertisements
Employee Endorsements
Using Testimonials That Don’t Reflect the Typical Consumer Experience
About the Endorsement Guides
The FTC’s Endorsement Guides provide insights and regulations to ensure that endorsements and testimonials in advertising are truthful and not misleading. These guides are particularly relevant in the context of social media and influencer marketing.
When Does the FTC Act Apply to Endorsements?
The FTC Act applies to endorsements when there is a commercial interest involved. This includes traditional advertising, social media posts, and other promotional content where a material connection exists between the endorser and the advertiser.
Product Placements
Product placements involve integrating a product into a media context, such as movies or TV shows, where it is used or mentioned in a way that does not constitute a traditional advertisement. Disclosure may be necessary if viewers might be misled.
Endorsements by Individuals on Social Networking Sites
Individuals posting endorsements on social networking sites must disclose any material connections they have with the product or company, including receiving free products, discounts, or any other benefits.
How Should I Disclose That I Was Given Something for My Endorsement?
Disclosures should be clear and conspicuous. This means they should be placed where they are easily noticed and understood by consumers. Common ways to disclose include using terms like “ad,” “sponsored,” or “paid partnership” in the post.
Other Things for Endorsers to Know
Endorsers should ensure their claims are truthful and substantiated. If making any health, performance, or effectiveness claims about a product, they should have evidence backing these claims. Misleading or unsubstantiated endorsements can lead to legal action.
Social Media Contests
When running social media contests, disclose the terms and conditions clearly, including any material connections between the contest and the promoter. Ensure participants understand the rules and that their entries may be used in promotional activities.
Online Review Programs
Businesses offering incentives for online reviews must disclose these incentives. Review programs should not influence the honesty of the reviews, and any material connections must be clearly stated to maintain transparency.
Soliciting Endorsements
When soliciting endorsements, ensure that endorsers disclose any material connections. Avoid implying that an endorser’s experience is typical unless you have adequate evidence to substantiate that most users achieve similar results.
What Are an Advertiser's Responsibilities for What Others Say in Social Media?
Advertisers are responsible for ensuring that endorsements and testimonials about their products are truthful and not misleading. They must monitor endorsements and take action if false or misleading claims are made.
What About Intermediaries?
Intermediaries, such as ad agencies and PR firms, are also responsible for ensuring that endorsements comply with FTC guidelines. They must educate and monitor influencers to ensure compliance.
What About Affiliate or Network Marketing?
Affiliate or network marketing involves earning commissions by promoting products. Disclosures about material connections must be clear and conspicuous. Affiliates should avoid making unsubstantiated claims about the products they promote.
Expert Endorsers Making Claims Outside of Traditional Advertisements
Experts must base their endorsements on knowledge and experience with the product. They should disclose any material connections and avoid making claims outside their area of expertise or unsupported by evidence.
Employee Endorsements
Employees endorsing their employer’s products must disclose their employment relationship. This disclosure ensures transparency and helps avoid misleading consumers about the impartiality of the endorsement.
Using Testimonials That Don’t Reflect the Typical Consumer Experience
Testimonials should reflect typical consumer experiences. If a testimonial does not represent the typical experience, this should be clearly disclosed, and the advertiser should not imply that the testimonial represents the general consumer experience.
Q&A Section
Q. WHO IS THE FEDERAL TRADE COMMISSION ("FTC")?
The Federal Trade Commission (“FTC”) is an independent federal agency dedicated to protecting consumers and preventing unfair or deceptive practices in commerce. The FTC monitors advertising, including endorsements and social media marketing, to ensure they are not misleading and that necessary disclaimers are provided.
Q. WHY DO I CARE ABOUT THE FTC?
The FTC enforces laws against unfair or deceptive practices in commerce. Violations can lead to penalties including cease and desist orders, fines up to $41,484 per day per ad, civil penalties, consumer refunds, and corrective advertising. Failure to comply can result in significant legal and financial consequences.
Q. WHAT DOES UNFAIR AND OR DECEPTIVE ACTS OR PRACTICES MEAN EXACTLY?
An advertisement is considered deceptive if it contains a statement or omits information that is likely to mislead consumers acting reasonably under the circumstances, and if this misleading statement or omission is material to the consumer’s decision to buy or use the product.
Q. I WANT TO WRITE/POST/TWEET/DISCUSS ABOUT A PRODUCT I RECENTLY USED AS LOVED, THE COMPANY IS NOT PAYING ME BUT DID SEND ME THE ITEM – CAN I DO THIS WITHOUT GETTING IN TROUBLE?
You need to disclose that you received the product for free. Even if you are not paid, receiving a product creates a material connection that must be disclosed to avoid misleading consumers and complying with state and federal advertising laws.
Q. WHAT TYPE OF LEGAL TROUBLES CAN I RUN INTO AS AN INFLUENCER OR ONE WHO WISHES TO PARTICIPATE IN/PUBLIC A SOCIAL MEDIA AD?
As an influencer, you could face legal issues such as intellectual property infringement, false advertising, misrepresentation, violation of FTC rules, product liability lawsuits, and contract disputes. Compliance with legal standards and transparency in endorsements is crucial.
Q. IS THERE A DIFFERENCE BETWEEN AN OBJECTIVE CRITIC AND A PAID ENDORSER?
Yes, an objective critic provides opinions without any material connection to the product or company. A paid endorser has a material connection, such as payment or free products, which must be disclosed to avoid misleading consumers.
Q. I HAVE A SIGNIFICANT SOCIAL MEDIA FOLLOWING AND WAS RECENTLY CONTACTED BY A COMPANY TO DO XYZ?
If a company contacts you for an endorsement or collaboration, you must disclose any material connections and ensure that your content is truthful and not misleading. Clearly state your relationship with the company to comply with FTC guidelines.
Q. WHAT TYPES OF SOCIAL MEDIA ENDORSED POSTS ARE THERE?
Social media endorsements include native advertising, influencer marketing, sponsored posts, and affiliate marketing. These posts engage niche markets and promote brands, products, or services through transparent and effective communication.
Q. WHAT TYPE OF SERVICES DO YOU OFFER?
We offer guidance on compliance with FTC regulations, advice on social media and influencer marketing, assistance with disclosure practices, and support in addressing legal issues related to endorsements, intellectual property, and digital advertising.
Q. I THINK SOMEONE STOLE MY INTELLECTUAL PROPERTY (DRAWING, WRITTEN CONTENT, PHOTOGRAPHS) OR IS USING MY IMAGE TO PROMOTE A BRAND, WHAT CAN I DO?
If your intellectual property or likeness is being used without permission, we recommend attempting to resolve the issue through direct communication. If necessary, we can connect you with specialized intellectual property attorneys to pursue litigation or other legal remedies.
Q. I ALREADY HAVE A LAWYER, CAN I STILL USE YOUR SERVICES?
Yes, you can still use our services even if you already have a lawyer. We can provide additional support, specialized advice on social media and advertising compliance, and work collaboratively with your legal team to address your needs.