FTC Guides Concerning Use of Testimonials in Advertising – Background & Summary

• By: Staff Editor
• Date: August 16, 2010

Background

The FTC created the Guides Concerning the Use of Endorsements and Testimonials in Advertising in 1972 and then revised them in 1980. The Guides were intended to provide guidance to companies on the proper use of endorsements and testimonials in advertising.

By 2009 however, the advertising landscape had changed – the rise of social media sites made it apparent that companies had new avenues through which they could promote their services and products. In an attempt to keep up with changing times and new technology, the FTC published a revised version of the Guides in October 2009 to become effective from December 1 that year.

These revised Guides clarify some of the previous guidance topics, highlighting the need to disclose material connections between an endorser and the company marketing the products. The revisions also cover some new issues that were not previously addressed, such as the conveyance of endorsements and testimonials through different social media outlets like blogs, Twitter and Facebook.

Although FTC guides are not binding law, they are administrative interpretations intended to help advertisers comply with the FTC Act. While the Guides refer to the advertising of "products," the Guides apply equally to the advertising of products, services, companies, and industries. The Guides illustrate the guidelines with a variety of real life examples to make clear distinctions between acceptable and unacceptable practices.

Summary of Guidelines
 

The Guides are divided into the following sections:

• § 255.0 Purpose and definitions
• § 255.1 General considerations
• §255.2 Consumer endorsements
• §255.3 Expert endorsements
• §255.4 Endorsements by organizations
• §255.5 Disclosure of material connections
   

Definition of endorsement

According to the Guides, endorsements and testimonials are any advertising messages that a consumer is likely to believe reflects the honest

“…opinions, beliefs, findings or experience of a party other than the sponsoring advertiser.”

Endorsements may not contain any representations which would be deceptive, or could not be substantiated.

The endorsement cannot be presented out of context or reworded to distort the endorser’s opinion or experience.

Definition of endorser

According to the Guides:

• An endorser must be a bona fide user of a product if the advertisement represents that the endorser uses the product.
• So long as the advertisement is run, the endorser must continue to be a bona fide user of the product.
• An advertisement also cannot represent, either directly or by implication, that the endorsers are "actual consumers" if they are not.
• An endorser may be an individual, group or institution.

Guidelines for expert endorsements

• Expert endorsers should have the necessary bona fides to make him/her an expert on the efficacy of the product or service being advertised.
• These endorsements must be based on sound expert evaluation.
• The evaluation should include extensive testing or examination of the product necessary to support the conclusions presented in the endorsement.
• Endorsements by expert organizations such as professional bodies must be supported by a sufficient process that ensures the endorsement reflects the collective view of the organization.

“Unusual results”

Previously the Guides contained a safe harbor that allowed the description of unusual results in a testimonial so long as the advertisement included a disclaimer that the results were not typical.

In the revised Guides, advertisers can no longer disclose simply that "results are not typical," or similar language. Unless an advertiser has substantiation that an endorser's experience is "representative of what consumers will generally achieve," the advertisement must "disclose the generally expected performance in the depicted circumstances."

Material connections

The revised Guides also require advertisements to disclose material connections between the advertiser and the endorser.

A material connection is defined as a relationship that may affect the weight or credibility of the endorsement in the eyes of the consumer.

For example, if an advertiser pays a research organization to do a study on a product and uses the resulting positive findings in an endorsement, the monetary nature of the relationship has to be disclosed. The requirements extend beyond traditional media and are imposed when an endorser makes a statement on a talk show, blog, or other social media.

Failure to disclose material connections can result in liability under the FTC Act for the advertiser as well as the endorser.

Social media

All of the requirements outlined in the Guides extend to social media users and advertisements as well.

For example, if celebrities have a relationship with advertisers, then they should disclose that relationship when making endorsements through social media or talk shows.

Bloggers are covered in the guidelines regarding material connections. If a blogger posts a product or service endorsement or review for which he/she has received cash or in-kind payments, the information must be disclosed. Both the advertiser and the blogger will be held liable for the statements made about the advertiser’s products.
 

Additional Resources

-    Read the full FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising