Work From Home Guide: The New FTC Rules On Endorsements By Bloggers, Celebrities, Experts And Organizations

If you are one of those Internet marketers or active bloggers or those folks who work from home, you may have heard about the new guides of the Federal Trade Commission (FTC) concerning the use of endorsements and testimonials in advertising. One of the biggest twists found on those revised guidelines is the inclusion of the “new media” specifically the Internet and blogs as modern advertising venues that will be possibly covered by the new Guides. Endorsements and testimonials made through these “consumer-generated media,” as referred by the Guides, will join those found in traditional ones like radio, television, newspapers and magazines and will also be regulated by the Commission.

The announcement of this new ruling a few days ago have created quite a buzz in the online community and have poked numerous bloggers, affiliates, online reviewers, people in the Internet commerce and others who work from home. But the new FTC Guides doesn’t concern endorsements by bloggers alone, it also states regulations regarding endorsements made by celebrities, experts and organizations.

Bloggers
Ask someone what he or she thinks is one of the most effective ways to advertise a certain product and you may get answers like “through the use of Internet” or “through blogs.” Indeed, blogging helps online businesses – huge and small alike – spread the word about their deals and offers. What most advertisers do is they give away free samples of their products to those bloggers who are willing to endorse and review the said products or freebie items. There are also some advertisers who employ bloggers to write about their products and services. In other words, the blogger or endorser has a material connection with the advertiser. Prior to the new guidelines, disclosure of the said material connection is just optional or unnecessary. However, with the latest FTC rules, every blogger should be able to disclose this information regarding material connection and the advertiser should find means to monitor and make sure that the blogger complies with that disclosure rule.

[When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.]

Celebrities
We all know that celebrities are hired to endorse products and services by various companies, businesses and advertisers. In the new FTC guidelines, it states there that celebrities are liable for what they say in the endorsements even if those statements are just being read from a script since the public or the consumers are likely to believe that what celebrities say corresponds their own beliefs and views on the said product. Furthermore, any material connection that exists between the celebrity and the advertiser should also be disclosed whenever possible, say, in interviews and talk shows.

Experts
Just like celebrities, experts are also hired for product endorsements. Their statements and reviews are even regarded by most consumers to have more weight than those of celebrities because of their expertise. Thus, people are likely to believe more on what they say and endorse. However, advertisers should keep in mind from now on certain FTC rules regarding expert endorsements just like this one:

[Although the expert may, in endorsing a product, take into account factors not within his or her expertise (e.g., matters of taste or price), the endorsement must be supported by an actual exercise of that expertise in evaluating product features or characteristics with respect to which he or she is expert and which are relevant to an ordinary consumer’s use of or experience with the product and are available to the ordinary consumer. This evaluation must have included an examination or testing of the product at least as extensive as someone with the same degree of expertise would normally need to conduct in order to support the conclusions presented in the endorsement. To the extent that the advertisement implies that the endorsement was based upon a comparison, such comparison must have been included in the expert’s evaluation; and as a result of such comparison, the expert must have concluded that, with respect to those features on which he or she is expert and which are relevant and available to an ordinary consumer, the endorsed product is at least equal overall to the competitors’ products. Moreover, where the net impression created by the endorsement is that the advertised product is superior to other products with respect to any such feature or features, then the expert must in fact have found such superiority.]

Organizations
When you talk about endorsements by organizations, you are referring to the joint or shared views, opinions or beliefs of a group of individuals or, according to the Guides, the “collective judgment of the organization.” In this case, the new FTC ruling specifies that [an organization’s endorsement must be reached by a process sufficient to ensure that the endorsement fairly reflects the collective judgment of the organization. Moreover, if an organization is represented as being expert, then, in conjunction with a proper exercise of its expertise in evaluating the product under § 255.3 (expert endorsements), it must utilize an expert or experts recognized as such by the organization or standards previously adopted by the organization and suitable for judging the relevant merits of such products.]

Keep in mind that these new regulations take effect starting December 1st of this year and the fines per violations are reported to run up to $11,000. You can read the whole 81 pages of the Guides here.