“Results Are No Longer Typical” and Your Advertising & Marketing Face the Biggest Changes in Compliance in a Generation
The use of testimonials and endorsements has always been a central element to advertising, marketing, email, direct mail and infomercial campaigns. What better way to catch the attention of a customer to buy a product, attend a program, respond to an offer, make a phone call than to:
- have another customer talk about their success after buying the course or attending the program?
- have a “before and after” picture?
- have a celebrity tout a diet, exercise equipment, skin cream or vitamin?
- have a consumer talk about making money in his sleep as he stands in front of his sports car and mansion?
- meet the newest real estate mogul flipping houses or buying foreclosures or buying “no money down?”
- stack testimonial after testimonial in infomercials or newspaper ads?
This all seemed fairly easy and standard so long as the testimonial was real and you used the magic words — “Results Not Typical.”
Well, those days are over. The FTC issued new Guidelines (attached for your convenience) regarding the use of endorsements and testimonials in advertising. The result of these new Guidelines effectively changes the entire landscape of testimonial-based marketing
In the past, marketers were given a “safe harbor” by disclaiming testimonials and endorsements as “not typical,” the FTC determined that the consuming public is not adequately protected by this approach.
Testimonials can no longer be used unless the marketer can show that the result is “what consumers can generally expect from the advertised product.” The FTC is clear that a consumer testimonial is will be assumed to be the typical result one can expect from using the advertised product and the marketer must have substantiation to show that this is true.
Even if the testimonial only focuses on a particular element of the product or service, the marketer “should possess and rely upon adequate substantiation for this representation” and if the testimonial is not typical, a disclaimer must state what the expected performance is.
The treatment of endorsements also changes under the new Guidelines.
- Endorsements must reflect the honest opinions, findings, beliefs, or experience of the endorser. Furthermore, an endorsement may not convey any express or implied representation that would be deceptive if made directly by the advertiser
- The endorsement may not be presented out of context or reworded so as to distort in any way the endorser’s opinion or experience with the product.
- An advertiser may use an endorsement of an expert or celebrity only so long as it has good reason to believe that the endorser continues to subscribe to the views presented
- When the advertisement represents that the endorser uses the endorsed product, the endorser must have been a bona fide user of it at the time the endorsement was given. Additionally, the advertiser may continue to run the advertisement only so long as it has good reason to believe that the endorser remains a bona fide user of the product
- Endorsers also may be liable for statements made in the course of their endorsements.
“Material Connections” between that marketer and endorser must also be considered.
- When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed
- When an endorser who appears in a television commercial is neither represented in the advertisement as an expert nor is known to a significant portion of the viewing public, then the advertiser should clearly and conspicuously disclose either the payment or promise of compensation prior to and in exchange for the endorsement or the fact that the endorser knew or had reason to know or to believe that if the endorsement favored the advertised product some benefit, such as an appearance on television, would be extended to the endorser.
The Guidelines provide a series of examples that give some guidance about how particular situations should be handled.
These changes apply to all of your promotional activities whether in your advertising, presentations, website, blogs, email campaigns or other media.
The FTC acknowledges that the amended Guide will require companies to perform research, surveys and studies of the results or performance of their products and services. This will also stop “new companies that might not have data to show how well its product performs” to use a testimonial to make a performance claim.
So, what is a marketer to do?
- Have your compliance counsel perform an audit of your advertising campaigns (all media – email, direct mail, print, tv, radio, web, blog, social networking.)
- Review your marketing strategy and determine the message that you are trying to convey through the use of testimonials and endorsements.
- Determine if you have substantiation that backs up a representation of what a consumer can generally expect from your product or service (this is no different than the standard of review of non-testimonial based advertising.)
- If you do not have substantiation of what is “typical”, survey your customers; perform independent research; and, be ready to disclose those results as a disclaimer if you decide to include a testimonial in your marketing.
- Be creative. If your course or product or service relates to an industry, science or consumer trend that has independent, public domain standards, use them.
- Avoid short-cuts. If you can’t substantiate a claim in your standard advertising, you can’t justify it in a testimonial.
The new FTC approach regarding testimonials and endorsements is part of a proactive oversight of consumer advertising and trade regulation. Abuses in the marketplace and numerous instances of consumer fraud precipitated these changes. Going forward, those who abide by the rules and acknowledge the new playing field by being prudent and creative will find solutions and design effective marketing campaigns. This is not an end of testimonial/endorsement advertising, only a new beginning.