In light of recent scandals involving bloggers, advertisers, and the merging of the two in the ethically precarious practice known as “blogger payola”…the Federal Trade Commission has voted on—and, by a margin of 4 to 0, voted for—new guidelines that will require bloggers to disclose any “material connection” to advertisers, including payments for endorsements and free product samples.
“It’s the first time since 1980,” AdAge notes in its write-up of the guidelines, “that the FTC has updated its rules on the use of endorsements and testimonials in advertising. In addition to covering bloggers, the new FTC rules state that celebrity endorsers can be held liable for false statements about a product, and all endorsements must include results consumers can ‘generally expect.’”
The new rules are set to go into effect on December 1. You can read the full text of the guidelines (PDF) here; in the meantime, here are the most relevant passages:
Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides — which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” — the revised Guides no longer contain this safe harbor.
The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, 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 — like any other advertisement — is deceptive if it makes false or misleading claims.