FTC Offers Broad Interpretation (Extending All The Way To Twitter) Of Its Endorsement Guides
People who endorse marketers for a fee on Twitter could disclose the payment by adding a hashtag like "#paid ad" or "#ad" to their tweets, the Federal Trade Commission said this week. That was just one piece of new advice from the FTC about how to interpret its revised guides to testimonials and endorsements, issued last October.
The guides are not in themselves enforceable, but indicate the type of activity the FTC will consider deceptive. They specifed that bloggers should reveal "material connections" to marketers -- including the receipt of free review copies -- when consumers would be surprised to learn of the connections.
This week, the FTC published additional material about the guides, including answers to frequently asked questions. One of the questions addressed concerned how Web users could make adequate disclosures on Twitter, where posts are limited to 140 characters. The FTC suggested using a hashtag like "#paid ad," noting that it only required eight characters. (The FTC incuded the space in its suggested hashtag.)
The FTC also reiterated this week that its focus is on advertisers, not bloggers. The agency says it has no intention of monitoring bloggers; even if they come to its attention. Instead, the commission says, its focus "will be on advertisers, not endorsers -- just as it's always been."
The new advice typically suggests that people resolve any ambiguities by making more rather than fewer disclosures. For instance, one question considers whether individuals who say on Facebook that they work for a company must also make disclosures when they tout that company's products. The FTC says that doing so is "a good idea."
In addition, the FTC suggests that even token perks, like $1 coupons, should be disclosed. "While getting one item that's not very valuable for free may not affect the credibility of what you say, sometimes continually getting free stuff from an advertiser or multiple advertisers is enough to suggest an expectation of future benefits from positive reviews," the commission says.
When the guides came out last year, some industry observers criticized them for treating bloggers differently than writers for more traditional media. For instance, while the FTC recommended that bloggers tell readers about the receipt of free review copies, the agency didn't recommend that newspapers, magazines or Internet news sites make similar disclosures.
The FTC continues to make that distinction in its new document, on the theory that consumers have different expectations for blogs than news media. "For a review in a newspaper, on TV or on a website with similar content, it's usually clear to the audience that the reviewer didn't buy the product being reviewed," the FTC says. "But on a personal blog, a social networking page, or in similar media, the reader may not expect the reviewer to have a relationship with the company whose products are mentioned."
But the FTC doesn't spell out why it believes that consumers make different assumptions about reviews depending on where they appear -- an omission that troubles some observers like Santa Clara University law professor Eric Goldman. "It's an empirical statement that they have no support for," he says.
Jeff Greenbaum, an advertising and marketing lawyer with Frankfurt Kurnit Klein & Selz, adds that marketers who were awaiting additional guidance might be "surprised, and perhaps even disappointed," by the FTC's latest advice. "One of the major concerns that people had about the guides was that any time you provided a free product to a blogger, disclosure would be required," he says. The new material "really reinforces the FTC's position that almost anything you provide to a blogger will require disclosure."