The Buzz Bin

FTC on Social: Balanced?

In October, the Federal Trade Commission (FTC) issued its Guides Concerning the Use of Endorsements and Testimonial in Advertising. The new guidance is game-changing, as many have commented upon. Some have even said that the FTC, particularly in its comments about “typical” results claimed in advertising and other promotion, has changed the rules in the middle of the game. Regardless of your take on the new “guides,” it’s prudent to review your social media guidelines and consider revising them to match up with the new advice, muddy though it may be in some areas. The new effort at the FTC to increase transparency in endorsements could greatly complicate the work public relations  people do every day.

So, here are some ideas for revisions to your social media guidelines:

1. The claims you make on behalf of (company/client) must be substantiated by information you have reviewed or that has been reviewed by a teammate in the case of reTweets, blog comments, etc., you pass along. (This has always been good policy, but even more important under the guides. A recent Virginia governor’s race covered by VirginiaTomorrow.com pointed this out when one worker tweeted about his candidate’s opponent:  BREAKING NEWS: McDONNELL HAS CONFEDERATE FLAG POSTED IN HIS BOOTH AT GUN SHOW IN RICHMOND. Trouble ensued when the McDonnell campaign replied “not our booth; not our flag.”)
2. You must note your connection with the product, service or other information presented in any social media or other public comments. Promoting or endorsing the (company’s/client’s) products, services or other activities, are covered under this requirement, whether or not you are on the team responsible for the product, service or other activity. (This is particularly important with companies or their consultants where highlighting the relationship is sometimes treated casually by other offices or teams not specifically focused on promoting the product or service mentioned.)
3. Your claims on behalf of (company/client) may not be qualified by “results may vary” or other disclaimer, so take special care in presenting information of a scientific nature or other information that is outside your expertise. A safe approach is to never make a claim without presenting the source via a link or other method. (Again, this has always been good practice, but may not be explicit in existing social media guidelines.)
4. Any “celebrity” or other spokesperson engaged and paid (in any form) to speak on behalf of (company/client) is also required to disclose the paid relationship to the (company/client). It is not sufficient to disclose a relationship to (the public relations, advertising agency or other promotion support firm), for example. A spokesperson who acknowledges a service or product in a forum not organized by the company or its agent and neglects to mention the relationship with the client is in potential violation of this guideline.  It is the responsibility of the team assigned to the product or service to alert management so that corrective actions can be considered for the protection of (company). (The importance of tracking what your spokesperson/celebrity endorser is saying or doing is greater today than ever.)
5. If you provide any inducement in the form of a product or service to a blogger or others who might endorse the product, you should keep in mind that any “material” connections should be revealed by the recipient. The FTC will consider any direct or in-kind payment or transfer of product or service to classify the recipient as an endorser.  Less clear is the “materiality” test, and the FTC indicates it will review events on a case-by-case basis. It is the responsibility of the assigned team to track any product, service or in-kind payment provided bloggers or others with the intent to generate editorial content and to assure that any resulting endorsement discloses the relationship with our (company/client). If the relationship is not disclosed, it is the responsibility of the team to alert management so that corrective actions can be considered for the protection of the (company/client). (The materiality issue aside, this and other aspects of the guide make it important to monitor social media mentions in order to assure transparency.)
6. The use of “typical” experiences in promotions or advertising featuring consumers who reveal their use of a product or service must disclose that results were unique to the situation depicted. (Short and sweet, but critical to pharmaceutical, nutraceutical and other similar firms, as well as other organizations that have operated under other rules for reporting results of trials of all types.)
7. Every mention of research used in promotion of (company/client) should clearly state the sponsor of the research. In cases where this is not done, it is the responsibility of the assigned team to alert management so that corrective actions can be considered for the protection of the (company/client). (In the age of social media, this traditional approach to attribution can sometimes be forgotten or left behind in a character-limiting environment. Just because you only have 140 characters or so doesn’t make the obligation go away, though.)

The revisions to social media guidelines are just the tip of this iceberg. I like the way John Cass, who wrote “Strategies and Tools for Corporate Blogging”  posed the question on his post the other day, where is asked “Big Change or Storm in a Teacup?”  Having worked for a long time in the corporate investor relations world, I’d suggest that the changes are just beginning. While we don’t have a Sarbanes-Oxley-like law that codifies much of this for “endorsers,” the FTC has greatly expanded the things over which it will exercise influence. Endorsers (and influencers of endorsements) beware!