Editor's Note: New Testimonial Guides Promise to Change the Game Starting Dec. 120 Nov, 2009 By: Thomas Haire Response
With the Oct. 5 announcement of the Federal Trade Commission’s (FTC) approval of changes to its Guides Concerning the Use of Testimonials and Endorsements, the regulatory group confirmed and finalized many changes that have long been feared by the direct response industry. At the same time, the changes have a distinct effect — for the first time — on new technologies, including blogging.
This is the first update to these guides — which the FTC stresses are not law but rather “administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act” — in 29 years. Since 1980, the guides had contained a “safe harbor” for marketers of products in such markets as fitness and skincare, allowing marketers to utilize testimonials and endorsements by consumers who had great success utilizing their products as long as those testimonials were accompanied by a disclaimer, such as “results not typical.” This safe harbor has been removed in the new guides.
Leaders in the direct response marketing business have been fighting against the finalization of the new guides since the concepts were announced earlier this year. Industry leaders, such as Product Partners’ Jon Congdon and Guthy-Renker Corp.’s Greg Renker, even testified on Capitol Hill about the chilling effects the new guides could have on certain sectors. In an exclusive interview on the topic in Response’s September issue, Congdon said, “These new proposed guidelines would make our job as marketers nearly impossible, no matter how good our products are.”
Now, despite his efforts and the efforts of a number of industry associations, Congdon will have to test those words — to see if his company and others can do the “nearly impossible.” At the same time, the FTC addressed word-of-mouth marketing, using the new guides in an attempt to crack down on bloggers who may be receiving compensation for their positive product reviews. This facet of the new guides hits home with more traditional marketers that have recently flooded the social marketing and word-of-mouth marketing spaces online.
Yet another change to the guides affects the use of celebrity endorsers and/or hosts. For decades, the FTC — to no avail — has tried to attach liability for violations of the FTC Act to celebrities who endorsed bad products. The most recent test case involved former baseball star Steve Garvey earlier this decade, but the FTC fell short of its goal. Now, instead of testing through the courts again, the FTC clearly has decided to include this aspect in the guides — its most clear-cut effort yet to close this loophole.
The new guides take effect on Dec. 1 — now a game-changing date in the history of direct response marketing. Because of the importance of these changes, Response has altered its editorial calendar, allowing its readers to hear from some of the leading legal minds in direct response in a special feature on the FTC’s new guides. Keep your eyes peeled for it in next month’s issue!
Thomas Haire – Editor-in-Chief
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