Guest Opinion: Networks Shouldn’t Be the FTC’s Version of ‘UL’17 Sep, 2010 By: Kevin J. Lyons Response
Dec. 1, 2009 marked a major change in the direct response universe. On that day, the Federal Trade Commission (FTC) made the first changes to the Testimonial & Endorsement Guides since 1980. During those 29 years, the direct response industry exploded and saw the advent of smash hit products.
For those in DRTV, the most significant change to the guides was the removal of the “results-not-typical” safe harbor marketers had operated under. Previously, marketers could show testimonials in their advertising that contained exceptional results so long as they disclaimed that those particular results were not typical.
The new guides now require “clear and conspicuous disclosure of generally expected product performance whenever a testimonial used in marketing is not representative of what consumers can expect” (Response, December 2009). The FTC has further stated that all advertising claims will be evaluated based on the net impression of the advertising as a whole.
This presents a significant issue for two categories that are perennial top-3 categories of long-form direct response — fitness and beauty/personal care. How does one define a typical result for a product such as a fitness program or an acne treatment product? Since each consumer is unique and subject to a variety of factors that influence their results, how does one typify that experience? This issue is at the heart of the consternation many have with the new changes.
When Dec. 1, 2009 arrived, it was not without business disruption. Some shows encountered difficulties getting cleared to run on networks, and others had to revamp entirely all the testimonials in their shows to meet the new criteria. In fact, one major fitness marketer had to pull its successful exercise show off the air entirely in December to edit the infomercial. The result was hundreds of thousands of dollars in lost revenue to cable networks and several times that in lost sales for the marketer.
In surveying several leading figures in the direct response media business, two topics consistently come to the forefront. First, that watered down testimonials may harm results and consequently harm the business. Second, that the network Standards & Practices (S&P) clearance process is largely business as usual, especially for those networks with thorough and established practices in the review of advertisements.
In terms of the former, the jury is still out on the long-term effects of removing the best-case testimonials. Aside from increased legal costs to marketers and agencies, there may be a significant loss of sales. Taking away the use of best case scenarios brings forth the argument that the FTC, in making these changes, has discounted the intelligence of consumers.
Today’s savvy consumer aspires to the ideal, not the mediocre. When a shopper enters a department store, she does not expect to look like the model does when wearing those same clothes, but she aspires to be like that model by wearing those clothes. The same argument can be made for fitness products, such as P90X. The viewers of P90X does not expect to look like Tony Horton after using the product, but they aspire to be like Horton in that they want to achieve greater physical fitness and the resulting appearance.
When it comes to the latter, the S&P clearance process, it is largely business as usual. Not without some clarification though: For networks with a thorough and rigorous process in place to screen direct response advertisements, the procedure remains the same as before the FTC changes.
- Review of all claims and related substantiation.
- Review of an independent, double-blind study demonstrating safety and efficacy of products.
- Review of a product sample/packaging.
- Review of the credentials of any expert featured in the ad.
Media outlets should not be the Underwriters Laboratory (UL) of the DRTV world. They should only conduct a fair and reasonable review of the advertisements. It is not clear, based on some FTC leaders’ comments, whether they feel the same.
The industry will face more scrutiny and regulation if more bad actors surface in the business, and I am not referring to Keanu Reaves and Vin Diesel. Successful self-policing is the answer and one that will provide us all with the ability to make the industry prosper. n