Guest Opinion: 3 Errors That Could Get You in FTC Hot Water1 Jun, 2009 By: Eddie Gaut Response
Extra! Extra! By now you must have heard about it. They're the new Federal Trade Commission (FTC) guidelines soon to be decided upon, and they've supposedly got even the big boys shaking. The FTC has proposed new testimonial guidelines that basically state that results shown are expected to be typical — atypical results currently being aired will no longer be safe with the simple "results not typical" disclaimer.
These proposed guidelines have already affected our industry. Many programs have been put on hold or turned down recently because many production organizations don't know what to do and are therefore allowing falling media costs to slip by due to fear of testimonial backlash from the FTC.
Do not be afraid of the FTC's proposed guidelines, but rather steer clear of these three possible errors.
Error No. 1: Avoid Friends, Family and Small Testimonial Groups
When asked, "What about Suzy Q testimonial provider recruiting a dozen or fewer 'casted' individuals, or friends and family, and personally working with them to use as testimonials in an infomercial?" the answer from Richard L. Cleland, assistant director of advertising practices at the FTC, was quick and a little frustrated. "Well, those days were over long ago," he said.
This is not a new guideline at all, but rather an old rule that the FTC expects the industry to have already implemented. Now, we have heard it again — straight from the horse's mouth!
Error #2: Make Sure Testimonials Have No Material Connection
Unfortunately, if one were to search Google, Craigslist or the listings for many modeling and casting agencies, one would find companies blatantly advertising for TV testimonials. In addition, many of those ads also guarantee payment for such testimonials. And, if that is not crossing the line enough, some of these recruitment ads actually state what they want said. This is a huge no-no with the FTC.
No compensation or material connection can be offered to the participants of a product study. This means that your testimonial study is exactly that — a study with no mention or promise of television or other benefits for great results or extra effort.
If an otherwise legitimate testimonial speaker knew that they had the opportunity to be on television before they gave their on-camera interview, the FTC would have issue with that testimony. The knowledge of the potential of being on TV is a material connection due to the motivation factor.
Error # 3: Using Non-accepted Testimonial Recruitment and Study Practices
It has always been a good idea to make sure your testimonial studies and product efficacy studies can prove typicality. In essence, that is what an efficacy study is — a typicality study. Recently, I have read many articles contending that the FTC is demanding additional substantiation in order to prove typicality. However, this is not necessarily true.
If you are one of the companies who regularly put your product and programs through scientifically accepted studies then you probably will not have to change anything other than to focus more on the typical results generated by your existing study protocol.
During my conversation with Cleland, I asked, "What percentage of participants would need to experience a result for advertisers to tout it in an ad as a typical result?" The answer: "If the advertiser conducted a reliable study, the advertiser would be safe using the average result," Cleland said. "A study is acceptable when experts in the relevant scientific field would find adequate to support a claim and that people conducting the study are qualified to conduct a scientific study."
If you are gearing up to air an infomercial, I suggest finding a testing center familiar with the DR industry. In addition, make sure it has experienced lead investigators and qualified study coordinators who can organize a valid study that focuses on the typical result supported with scientific and statistical significance. There are a number of third-party scientific study providers focused on DRTV products.