Truth and Transparency: Guiding Principles of FTC Endorsement Compliance
In a recent article [DATE/LINK to FTC Compliance Alert], I told you about the recent crackdown by the Federal Trade Commission on two social media influencers for what the FTC called deceptive endorsement practices.
One comment on social media in response to this crackdown attributed the governmental interest in this case to the fact that the business centers around gambling.
But don’t bet your business that just because you are in a more traditional or family-friendly business that Big Brother isn’t checking how you handle endorsements on your site.
So how do you ensure compliance and avoid the risk of a similar settlement?
According to the FTC, it boils down to two simple things:
(1) truth in advertising
(2) transparency in advertising “ 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.”
From the ftc.gov article The FTC’s Endorsement Guides: What People Are Asking (https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-endorsement-guides-what-peopleare-asking)
Truth in Advertising
Much like SEO best practices that Google pushes that focus on the end user experience on our websites, the FTC guidelines are not designed to make your life difficult but rather to ensure your customers have the best possible experience with your business, and do not feel misled or cheated after completing a transaction. But isn’t that what you want, too?
Good business means taking care of your customers so they return, or better yet, return and bring a friend (nothing is better than an endorsement from someone they trust!). Give them what they want, and they will return again and again to buy from you. The same principle applies to FTC endorsement compliance. Give your customers good testimonials that prove the benefits of what you offer. If your product gives extraordinary results, then prove it; don’t just claim it because even if true, it will have the smell of an outright lie. And use examples from real people. Certainly, you may have one or two exceptional results but if they are not typical, use the exceptional examples sparingly, with more typical results to balance out your claims. An added benefit, besides compliance, is that your average customer will more readily see themselves in regular folk who achieve average results.
Transparency in Advertising
Transparency in advertising is really just reinforcement of truth in your ads. It is about avoiding lies by omission or by listing a well-known brand on your site as if they endorsed you when in reality the connection is weak. For example, if the site included your iPhone app in a list of new running or exercise apps available in the App Store. Being listed is not a de facto endorsement. However, if your app is part of a list article on Product Hunt, there is no reason not to brag about it. Just avoid any hint of specific endorsement and say your app was featured in the article on Product Hunt’s list of best new workout apps.
The same applies to paid endorsements. Consumers are used to seeing celebrities hawk the wares of companies. The best celebrity endorsements come from those who actually use your product, but regardless of whether or not they actually use the product, you must explicitly inform your customer that the celebrity was paid to provide the promotion.
Ultimately, the FTC is concerned about misleading or incomplete information that may give potential customers the wrong impression about a product and the results they can expect. Following good business practices and always keeping your customers’ best interests at heart while being honest and open about product results and use will keep you give you a winning hand, at least as far as the FTC is concerned.