Advertising FTC Endorsements

What are Endorsements in Advertising?

Endorsements are messages in advertising that consumers are likely to believe reflect the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser. This party could be an individual, group, or institution. The FTC treats endorsements and testimonials identically for the purpose of its advertising guidelines.

• Examples of endorsements: Reviews, celebrity endorsements, professional endorsements, consumer testimonials.

FTC's Guidelines on Endorsements and Testimonials

The FTC's Guides Concerning the Use of Endorsements and Testimonials in Advertising are administrative interpretations of laws enforced by the FTC to help advertisers and endorsers comply with legal requirements. These guidelines provide a framework for voluntary compliance with the law.

Key Principles for Endorsements

The FTC emphasizes several key principles for endorsements to ensure they are truthful and not misleading:

• Honesty: Endorsements must reflect the honest opinions, findings, beliefs, or experiences of the endorser. They cannot convey deceptive representations.
• Substantiation: Advertisers must have adequate substantiation to support any claims made through endorsements, just as they would if they made the claims directly.
• Bona Fide Use: When an 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.
• Disclosure: Material connections between the advertiser and endorser, which might affect the credibility of the endorsement, must be disclosed.

Consumer Endorsements in Advertising

The FTC provides specific guidelines for consumer endorsements in advertising:

• Representativeness: An advertisement employing consumer endorsements is interpreted as representing that the product or service is effective for the purpose depicted. The advertiser must have substantiation that the experiences depicted are representative of what consumers will generally achieve.
• Actual Consumers: Advertisements presenting endorsements by what are represented as "actual consumers" should utilize actual consumers in both the audio and video or clearly disclose that the persons in such advertisements are not actual consumers.
• Disclaimers: General disclaimers like "Results not typical" or "These testimonials are based on the experiences of a few people and you are not likely to have similar results" are unlikely to be effective in preventing deceptive advertising.

Expert Endorsements in Advertising

The FTC sets specific requirements for expert endorsements:

• Expertise: The endorser's qualifications must give them the expertise they are represented as possessing with respect to the endorsement.
• Product Evaluation: The expert's endorsement must be supported by an actual exercise of their expertise in evaluating product features relevant to an ordinary consumer's use or experience with the product.
• Comparisons: If the advertisement implies that the endorsement was based upon a comparison, the expert must have conducted a comparison and concluded that the endorsed product is at least equal to the competitors' products.

Disclosure of Material Connections

The FTC requires advertisers to disclose material connections between the advertiser and the endorser that could affect the credibility of the endorsement. This includes:

• Payment or Compensation: Disclosure of any payment or promise of compensation made to the endorser for the endorsement.
• Benefits: Disclosure of any benefits, such as an appearance on television, that the endorser knew or had reason to know would be extended to them if the endorsement favored the advertised product.

Examples of Disclosure Requirements

The FTC provides various examples of when disclosure of material connections is necessary, including:

• Sponsored Research: Disclosing the advertiser's funding of research projects when advertising the research results.
• Celebrity Endorsements: Disclosing compensation for celebrity endorsements, even if it's a typical industry practice.
• Social Media Endorsements: Disclosing when an endorser has a paid relationship with the advertiser when using social media platforms.
• "Hidden Camera" Situations: Disclosing when an advertiser has set up a situation to obtain "spontaneous" opinions from consumers.

Consequences of Non-Compliance

Advertisers and endorsers who fail to comply with the FTC's guidelines for endorsements and testimonials can face legal consequences, including:

• Corrective Action: The FTC can take corrective action, such as cease and desist orders, to stop deceptive advertising practices.
• Fines and Penalties: Violators can face fines and other penalties.
• Reputational Damage: Non-compliance can also damage the reputation of both the advertiser and the endorser.

By adhering to these guidelines, advertisers and endorsers can ensure their advertising practices are truthful, fair, and compliant with FTC regulations.