In 2009, the FTC rolled out some guidelines to accommodate the world of new media. The online marketing sector raised many questions and concerns at the time but has learned to work with the recommendations. But, the FTC isn’t done with this area.
The commission recently updated its guidelines and now calls for “clearer” disclosure of influencer/brand relationships. To be fair, the primary message the FTC is trying to send hasn’t changed. The challenge is that, as the commission is being more specific, online marketing, and especially social media marketing, becomes a lot harder.
Understanding the Guidelines
This information can be a lot to digest and is already bringing anxiety to the marketing community. But, it’s important to understand, first of all, that these are guidelines. They aren’t rules or regulations. As Brian Clark, the CEO of Rainmaker Digital and founder of Copyblogger Media explained to us, endorsement guidelines were around even before the Internet existed. Yes, the Web and social media have complicated these areas since the online arena isn’t as clear as mediums such as radio and TV. But, the intent of the FTC to protect human interest still exists:
The Guides, at their core, reflect the basic truth-in-advertising principle that endorsements must be honest and not misleading. An endorsement must reflect the honest opinion of the endorser and can’t be used to make a claim that the product’s marketer couldn’t legally make.
In addition, the Guides say if there’s a connection between an endorser and the marketer that consumers would not expect and it would affect how consumers evaluate the endorsement, that connection should be disclosed. For example, if an ad features an endorser who’s a relative or employee of the marketer, the ad is misleading unless the connection is made clear. The same is usually true if the endorser has been paid or given something of value to tout the product. The reason is obvious: Knowing about the connection is important information for anyone evaluating the endorsement.
Say you’re planning a vacation. You do some research and find a glowing review on someone’s blog that a particular resort is the most luxurious place he has ever stayed. If you knew the hotel had paid the blogger hundreds of dollars to say great things about it or that the blogger had stayed there for several days for free, it could affect how much weight you’d give the blogger’s endorsement. The blogger should, therefore, let his readers know about that relationship.
Another principle in the Guides applies to ads that feature endorsements from people who achieved exceptional, or even above average, results. An example is an endorser who says she lost 20 pounds in two months using the advertised product. If the advertiser doesn’t have proof that the endorser’s experience represents what people will generally achieve using the product as described in the ad (for example, by just taking a pill daily for two months), then an ad featuring that endorser must make clear to the audience what the generally expected results are.
The Enforcement Factor
This is the area that is of the biggest concern for many marketers. How will the FTC enforce these guidelines? Realistically, it would be next to impossible for the commission to monitor all this activity online. Still, this doesn’t mean that they should be ignored. While we may not agree with the guidelines, it is important that marketers take them seriously.
“FTC or no FTC, disclosure is always important. It doesn’t help brands in the long run to be suspected of trying to trick or dupe consumers,” Rebecca Lieb, recognized marketing author, speaker and principal of Conglomotron LLC, explained to us.
“These new FTC guidelines could also be termed “best practices” for marketers to operate effectively, as well as transparently, on social media. Upfront disclosure is always preferable to accusations of intentionally trying to hoodwink an unsuspecting public.”
In the past, entities like the commission would focus on large brands to showcase their authority. Small businesses shouldn’t sit idly by though. Any business could fall under scrutiny.
The Threat to Social Media
Another extremely challenging area for marketers with this update to the guidelines is how the FTC is asking the disclosure take place. Twitter, for instance, has a strict character limit. Still, the guidelines say: “…a disclosure on a profile page isn’t sufficient because many people in your audience probably won’t see it.” As a result, the disclosure would need to happen within the 140-character limit tweet, which may take away from the message.
According to Clark, a corporate Twitter account can freely promote its own products and services. But, disclosure does need to be apparent when the promotion is coming from an employee.
Correct tweet: I’m so proud of all the new features in our <cool product>.
Incorrect tweet: Check out <cool product>.
“When you’re promoting a client, or a company you have an investment in, or a product you’ve been paid to pitch (even as an affiliate), you have to disclose, period,” he went on to explain. “That’s always been the law in earlier mediums, so it’s consistent. It’s just that we’re all the media now.” (Emphasis added.)
Despite the extra effort on the part of marketers, this update is not likely to impact social media adoption by businesses. Social media is simply a natural part of the marketing mix, and its benefits outweigh these additional challenges.
While these guidelines aren’t exactly welcome to the marketing community, the industry needs to be prepared to take these on just as it has other challenges. Lieb reminded us that there were similar outcries when the FTC challenged email marketing and search advertising. The FTC lays out these types of guidelines to encourage the industry to self-regulate. The changes aren’t wanted, but marketers will find a way to continue connecting with their target audience, even if it requires multiple tweets to get a message across.
Most importantly, marketers need to stay educated on these issues. Change often brings new challenges, but by staying informed, it’s possible to turn these challenges into opportunities for you and your client.