Transcript Presentation title - Association of Corporate Counsel

Blogs and Social Media Marketing:
Complying with the FTC’s New
Endorsement Guides
Brian Socolow
Loeb & Loeb LLP
January 18, 2011
© 2011 LOEB & LOEB LLP
Endorsements and Testimonials in New Media

Endorsements and testimonials are governed
by:
 state and federal advertising laws
 case law
 FTC’s Guides Concerning the Use of
Endorsements and Testimonials in Advertising


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FTC revised its Guides to include social
networking, blogs and word-of-mouth
marketing
The Guides are “advisory” in nature
Revised Guides took effect December 1, 2009
FTC Endorsement Guides
 Define endorsements and testimonials broadly:
– any advertising message that consumers are likely to believe reflects the
opinions, beliefs, findings, or experience of a party other than the sponsoring
advertiser
 Must reflect the honest opinions or experience of the endorser
 May not contain any representations that would be deceptive,
or could not be substantiated, if made directly by the
advertiser
 Must disclose a material connection that might affect the
weight or credibility of the endorsement
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FTC Endorsement Guides

The Guides specifically address blogs:
 A blogger may be liable
– for representations made in the endorsement
– if he or she fails to disclose clearly and conspicuously any payment or gift
 An advertiser may be liable for a bloggers false or unsubstantiated
statements if the advertiser requested that the blogger try a new
product and write a review
 FTC suggests that advertisers provide guidance and training for its
blogger’s
 FTC also suggests that advertisers monitor bloggers who are
being paid to promote their products
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FTC Endorsement Guides – Celebrity / Athlete Endorsers
 Celebrities have a duty to disclose
their relationships with advertisers
when making endorsements outside
the context of traditional ads
– Kim Kardashian and QuickTrim diet
 Celebrity endorsers may be liable
for false statements
– Celebrities may need to make “reasonable
inquiries” regarding the basis for statements
in the script
– Shaquille O’Neal and Power Balance
wristbands
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FTC Endorsement Guides

The Guides specifically address word-ofmouth marketing:
 Incentives given to individuals by an advertiser
should be clearly and conspicuously disclosed
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FTC Guides for Endorsements and
Testimonials
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FTC Guides for Endorsements and
Testimonials
 FTC sent a letter to retailer Ann Taylor regarding gifts given to
bloggers who attended a fashion show
 FTC decided not to initiate any enforcement action because:
–Small number of bloggers reviewed the show
–Some of them disclosed the gifts
–Ann Taylor had in place a written policy prohibiting gifts to bloggers
without first telling them to disclose gifts
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FTC Guides – The Bottom Line
Advertisers can be liable for false or misleading statements made in social media.
Bloggers can be liable for false or misleading statements.
Bloggers should disclose any material connection with an advertiser.
Advertisers should provide guidance to bloggers and should monitor blogs to see that
bloggers are not making false or misleading statements.
Celebrities can be liable for false or misleading statements.
Celebrities should disclose when they are promoting something outside traditional
advertising such as on talk shows or social media sites.
Advertisers engaging celebrity endorsers should make sure endorsers are familiar with the
products and services they are promoting.
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Resources
 FTC’s Guides Concerning the Use of Endorsements and Testimonials in
Advertising
http://business.ftc.gov/legal-resources/1/33
 FTC Endorsement Guides: What People Are Asking (FAQs for Business)
http://business.ftc.gov/documents/bus71-ftcs-revised-endorsement-guideswhatpeople-are-asking
 Social Studies: Applying the FTC’s Revised Endorsement Guides in New
Marketing Media
http://business.ftc.gov/documents/social-studies-applying-ftcs-revisedendorsement-guides-new-marketing-media
 When You Wish Upon a Star: Celebrity Endorsements & the FTC’s Revised
Endorsement Guides
http://business.ftc.gov/documents/when-you-wish-upon-star-celebrityendorsements-ftcs-revised-endorsement-guides
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Blogs and Social Media Marketing:
Complying with the FTC’s New
Endorsement Guides
Brian Socolow
[email protected]
Los Angeles
11
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Washington, DC
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www.loeb.com