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14 Jan, 2010 By: Thomas Haire Response


FTC Guides Take Effect; Fox Bars ‘Insanity’ Show
By Thomas Haire (thaire@questex.com)

FTC Guides Take Effect; Fox Bars ‘Insanity’ ShowLOS ANGELES — On Dec. 1, the Federal Trade Commission’s (FTC) new amended Guides Concerning the Use of Testimonials and Endorsements took effect — but Fox Networks Group’s standards and practices team didn’t wait until the official deadline before declining to run the latest version of the long-form DRTV show for Product Partners LLC’s “Insanity” fitness product.

Product Partners was notified on Nov. 20 that the FX cable network refused to clear the “Insanity” show due to the new FTC Guides, specifically pointing to information in the guides regarding typicality disclaimers and “generally expected performance.” Less than three weeks later, FX also denied the DRTV show for the company’s “Timeless Secret” beauty product for similar reasons.

When asked about the “Insanity” show, Scott Grogin, senior vice president of communications for the Fox Networks Group tells Response, “Per Fox’s broadcast standards department, the program does not meet the new FTC Guidelines. After that information is shared with the marketer’s [media buying] agency, we are always happy to take another look at the show or spot if the marketer wishes to re-submit it. If our standards department believes the show meets the new guidelines, we will air it without hesitation.”

Problems as Predicted
Jon Congdon, president and co-founder of Product Partners, and Jonathan Gelfand, the company’s senior vice president and general counsel, are working with Fox and its networks in order to get the shows for “Insanity” and “Timeless Secret” on to Fox stations. However, in a conversation with Response, Congdon says the situation is similar to what he described this past summer during Congressional testimony while the Guides were under review.

Gelfand agrees, adding, “Product Partners fought very hard, directly and with numerous similarly concerned trade organizations, to try and ensure fairness in the FTC’s update of the Guides. While we were encouraged that the FTC updated its Guides to include language taking the ‘net impression’ of the advertisement into account — the main standard that governs most other advertisements — the FTC unfortunately retained its arbitrary and in many cases unattainable standard of discovering and disclosing the ‘generally expected performance’ of a product’s results, leading to an ambiguous and capricious interpretation against legitimate marketers.”

Congdon says, “While it was very disappointing that our ‘Insanity’ fitness program, one of the toughest and most effective workouts ever offered in an infomercial format, was blocked from airing on one station, we remain supportive of the FTC’s mission to stop bad actors. Our concern, which is the same as it has always been, is in the unintended consequences of the guidelines. It turns out that what we predicted would happen — that a station would misinterpret the guidelines and block a good marketer from airing their commercial — has indeed occurred.”

Rich Cleland, an attorney with the FTC’s Bureau of Consumer Protection, believes that the situation is representative of a problem that could continue. “To the extent that network clearance departments are simply saying that every ad that has a testimonial must have a disclosure of what the ‘generally expected results’ would be, regardless of what that ad communicates — that is an incorrect reading of the Guides,” he tells Response. “The network clearance departments need to look at each ad distinctly and make an evaluation. Clearance teams must decipher whether the ad offers a message of typicality — as most ads will — and decide if ‘generally expected results’ disclosure is needed based on the depicted circumstances.”
However, Cleland says that marketers must be prepared to tell clearance departments why they believe their shows do not defy the new Guides. “Just saying that my ad doesn’t need disclosure doesn’t cut it,” he contends.

A Call to Action
Gelfand believes the FTC must address this issue quickly. “While we have not seen any reduction in the amount of deceptive advertisements, miracle pills or fake blogs, we have already had a network refuse to air one of our infomercials — a show that the FTC has publicly praised for its compliance, no less — due to networks being overly concerned about a vague and overreaching interpretation of the Guides leading to potentially liability,” he says.

In response to Fox’s decision, Congdon took his thoughts directly to David C. Vladeck, director of the FTC’s Bureau of Consumer Protection. While Congdon describes the tenor of the talks as “supportive” to Product Partners’ cause, he and Gelfand are still wary of continued misperception of the Guides.

“While we have had productive discussions with the FTC about this, and we think the infomercials will be allowed to air after all, it has cost us real money in a real world,” Congdon explains. “That undeniable fact has left us with an uneasy feeling. We hope that our uneasiness will diminish as the FTC’s support of marketers who are not trying to deceive the consumer remains steadfast.”

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