BlogPaws 2010 West - FTC Product Review Guidelines - Mary Engle

Product Reviews – the FTC’s Perspective

BlogPaws 2010 WestSeptember 10, 2010

Mary K. EngleAssociate Director for Advertising PracticesFederal Trade Commission

What Is the FTC?

Nation’s consumer protection agency

Small, independent agency of 1,100 employees -- lawyers and economists

Enforce truth-in-advertising, antitrust laws

FTC Advertising Law 101

Federal Trade Commission Act, Section 5:

Prohibits deceptive commercial practices

Ads must be truthful and substantiatedAds are deceptive if they are likely to

mislead consumers about something important to decision to use/purchase

• Express and implied claims be misleading

FTC Endorsement Guides

The Guides are interpretations of the law – that is, they explain how the FTC would apply Section 5 of the FTC Act to particular uses of endorsements and testimonials in advertising

They are not rules or regulations

There are no fines associated with them

What Is an Endorsement?

An endorsement is any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a person or organization other than the sponsoring advertiser

Endorsements are perceived to represent the personal views of the speaker

What the Endorsement Guides Say

Endorsements must reflect the honest opinions, findings, beliefs, or experience of the endorser

When an advertiser and an endorser have a relationship that consumers wouldn’t reasonably expect (a “material connection”), the relationship should be disclosed Consumers reasonably may judge what someone says

differently depending on whether speaker is independent from the seller

Consumers wouldn’t normally expect that another consumer has been compensated to talk to them about a product

Principles apply to . . . Viral Marketing

Stealth Marketing

Blog Advertising

Blogs (and Flogs)

And . . .

Buzz Marketing

Viral Video

And . . .

Social Networking Sites

As well as . . .

Who Is an Endorser?

Independent, unsolicited, unpaid consumer promotions or product reviews are not endorsements under the Guides

So these types of product promotion aren’t likely to present issues under the FTC Act

But when consumers are endorsing products as part of an advertiser’s social media marketing campaign, then the endorsement may become marketing subject to the FTC Act

Independent Product Review – social networking, personal blog example A cat lover has a blog where she writes regularly about

her cats’ antics The blog mentions a new tick medicine she has tried and

how it has kept her cats tick-free The blogger updates her social networking page to say

how great it is to finally find tick medicine that works The blogger received the medicine for free during a recent

visit to a pet store, as part of a sampling program, or The blogger received the medicine for free because she

got a coupon in the Sunday newspaper Because there is no relationship between the cat lover

and the tick medicine marketer, she doesn’t need to say she received the medicine for free

Sponsored Product Review – social networking, personal blog example A cat lover has a blog where she writes regularly about

her cats’ antics The blog mentions a new tick medicine she has tried and

how it has kept her cats tick-free The blogger updates her social networking page to say

how great it is to finally find tick medicine that works The tick medicine was sent to the blogger free of charge by

a marketer reaching out to potential influencers Because it wouldn’t be obvious to the cat lover’s readers

that she received the medicine for free from the marketer, this fact should be disclosed – on both her blog and her social networking page

Context Matters

Is the connection between the reviewer and the marketer apparent from the context?

Independent product review sites/articles, whether online or offline: When audience reading product review article

or visiting product review website understands the relationship between the reviewer and the marketer (that the reviewer didn’t buy the products she’s reviewing), disclosure is not needed to avoid deception

Free Products – product review site example A dog groomer has a blog devoted to the review

of a variety of pet care products Product manufacturers regularly send the

blogger free samples in the hope she will write about them

The blogger writes a favorable review Given the blog’s nature as a product review site,

readers don’t expect that the blogger pays for the products she reviews

The blogger does not need to disclose that she received the products free of charge

How Should Material Connections Be Disclosed?

Disclosure should be part of the message so it can’t be missed. E.g.:ABC Co. sent me this productI was given this product to try by ABC Co.On Twitter: #paid, #ad

Word of Mouth Marketing Association has a Social Media Marketing Disclosure Guide

Ann Taylor LOFT example

Ann Taylor LOFT invited bloggers to preview its Summer 2010 collection. Invitation stated that bloggers would receive gift card valued between $10 and $200 and instructed bloggers to send their review blog to Ann Taylor, after which they would learn the value of the gift card.

FTC investigated Ann Taylor but closed without formal action:

• Before being contacted by FTC, AT instituted policy going forward to notify bloggers of need to disclose gift cards

• First-time event, and only a few bloggers took up offer

Wrapping Up

Value of social media marketing depends on transparency of relationships

FTC will rely on complaints to decide what practices to investigate

FTC enforcement will focus on advertisers, agencies – not individual bloggers, brand ambassadors

Thank You!

For more information, visit www.ftc.gov