The FTC has finally updated a long-overdue guide on endorsements and testimonials to address changes in technology and advertising mediums. The new rules are designed to bring greater truth and disclosure to blogs, TV ads relying on testimonials and social media.
The updated guide has garnered the most press for its ruling that bloggers can be fined up to $11,000 if they don't disclose that they got cash or products for posting a testimonial. While most bloggers and respected word-of-mouth marketing firms have required this disclosure, the ruling and its large penalty should help consumers trust online reviews.
The FTC strengthened 1980 guidelines that let weight-loss products, get-rich-quick real estate schemes and all other manner of products showcase the few individuals who experienced blockbuster success with just an asterisk to show that results aren't typical. Now, individuals must state in their testimonial that "their results aren't typical."
While most people have come to accept the fine print and know that an ab roller won't have you drop 60 pounds without a well balanced diet and regular exercise, the ruling will provide a more consumer-friendly marketplace and help shoppers make smarter decisions. That is if producers don't speed up the disclosure to chipmunk-like speeds!
That's not all. Celebrities are also getting a bit of attention in the guide update. Celebrities will have to disclose relationships when they make endorsements on talk shows or with tools like Twitter. Sponsored tweets by celebrities aren't new; a startup company called Ad.ly pays celebrities greatly for sending out sponsored tweets. Ads sold through Ad.ly are clearly marked, but it's hard to tell how many other tweets from famous people go out without the disclaimer.
These changes to the Guides Concerning the Use of Endorsements and Testimonials in Advertising do a great job of outlining acceptable behavior in advertising and endorsing products; providing much needed change to testimonials and giving teeth to a long-rumored blogging endorsement crackdown.