FTC Revises Endorsements and Testimonials: Transparency is Key

By Matt Van Hoven 

The Federal Trade Commission revealed revised guidelines regarding endorsements and testimonials today. Bottom line: any and all endorsements must be revealed, whether it’s from a celebrity or a journalist or whathaveyou.

&#151 Cost of fine for infringing on these rules: up to $11,000.


&#151 “Material connections” (payments or free products) given by advertisers to endorsers that consumers wouldn’t expect must be disclosed.

&#151 Decisions will be made on a case-by-case basis.

&#151 What constitutes an endorsement versus word-of-mouth can be different.

&#151 A post from a blogger who receives cash or “in-kind payment” regarding a product (review) is considered an endorsement.

&#151 “Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.”

&#151 “If a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement &#151 like any other advertisement &#151 is deceptive if it makes false or misleading claims.”

&#151 If a claim made in an endorsement is found to be false, both the advertiser and the endorser can be held liable, regardless of whether not the endorsement is disclosed.

&#151 Celebrities and endorsers must reveal their relationships with advertisers when making an endorsement on, for example, talk shows or in social media (eh hem, Julia Allison).

Mashable sums up the rules: “Beyond straight up pay-per-post systems like Izea, it the new rules would seemingly apply to any situation where something of value changes hands between advertiser and blogger. For example, General Mills and Ford Fiesta bloggers would have to disclose the relationship they have with the advertiser.”

See the full release, here.

More: “FTC May Soon Hold Brands Responsible for False Product Claims Made in Social Media Realm