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360i Point of View on

The FTC’s Updated Guides for Endorsements

October 2009

Overview

The Federal Trade Commission (FTC) just updated its Guides Concerning the Use of Endorsementsand Testimonials in Advertising. This affects anyone running Digital Word of Mouth marketing(DWOM

) to solicit coverage from online influencers. This is the first time the Guides have beenupdated since 1980, so all of the additions for online marketers are new.

Understanding the new FTC Guides

One of the biggest changes with the new Guides is that bloggers must now disclose theirrelationships when endorsing products or services. This is especially true when there’s a “materialconnection” between advertisers and endorsers that includes payments or free products. Fines forbloggers who don’t comply can reach up to $11,000. 360i has always encouraged the bloggersand online influencers we work with to disclose such relationships even when there isn’t freemerchandise involved.Celebrities must also disclose relationships they have with advertisers, specifically in social mediabut also through other formats like talk shows or public events.Some of the new guidelines span beyond just the digital arena. For instance, the FTC writes, “Under the revised Guides, advertisements that feature a consumer and convey his or herexperience with a product or service as typical when that is not the case will be required toclearly disclose the results that consumers can generally expect.” This is not a particularlycommon issue online but would affect all forms of media, wherever such ads run.

What changes for marketers?

For any marketer working with 360i, nothing changes. We have been following the FTC’s updatesduring the months that this policy has come together, and our standards continue to be at leastas strict as the FTC’s new rules. Most of the bloggers and influencers we have relationships withconsistently disclose such relationships, whether mentioning 360i, our clients, or both.For any marketer that has been engaging with bloggers or celebrities to secure endorsements andget coverage, disclosure is a must. These guidelines crystallize current best practices. Whilemarketers and bloggers that follow them will avoid risking fines, they will more importantlyincrease their credibility and trust with consumers.