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Direct Response Marketing

Regulations Not Typical

1 Dec, 2009 By: Thomas Haire Response

But what’s an easy way to get started down this path? Goldstein says, “Marketers should take extra care to document all testimonials and endorsements to ensure that the testimonials accurately reflect the honest beliefs and experiences of the endorser and that whatever is presented in the show is consistent with the person’s experiences. In doing the necessary due diligence on all endorsers and testimonialists, marketers should attempt to obtain as much information as possible about the endorser’s personal experiences.”

She suggests including such information as the length of time the endorser used the product, the extent to which the endorser followed or deviated from the prescribed regimen and other factors that may be unique to the individual.

Hailey says that complete description and disclosure is a great way to play it safe. “If your testimonials didn’t utilize just the basic product or service offered in the advertisement, explain that they purchased upsells (e.g., one-on-one coaching services or optional publications available at extra cost),” he contends. “If you are selling an exercise product, make sure your weight-loss testimonials disclose that they used the product every day and also followed the reduced-calorie diet included as part of the offer. You may also want to disclose how long the testimonial was on your weight-loss program. If you honestly explain what the testimonial did to lose weight, his or her result may be reason reasonably representative of what the average person can expect to achieve, which makes the likelihood of a challenge much lower.”

Clarify Material Connections
Another area where the FTC is cracking down with the new Guides is on marketers disclosing all “material connections” between the marketer and endorser or testimonial, including online bloggers.

“It has become common for marketers to compensate bloggers to promote products either by giving samples away free, paying the blogger a percentage for each click-through affiliate sale, or even just handing out cash,” Rothman says. “But now the FTC is bringing it all out in the open. The Guides want to know if there is a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement. If so, you must ‘fully’ disclose the nature of the connection.”

Hailey adds, “If you give free samples to testimonials or bloggers who review your product on their blogs, that may need to be disclosed. If a celebrity endorser discusses your product on a talk show, he or she may need to disclose that they have a relationship with you. And if your employees or affiliates express positive opinions about your product when they post to online discussion boards, their Facebook pages, or their tweets, they may need to disclose their connection to you.”

Sater says tracking those bloggers will be of growing importance. “If you or someone on your behalf has given a blogger anything of value — even if it is just a sample of your product, for free, for them to evaluate and review on their blog — that blogger needs to ‘clearly and conspicuously disclose’ that fact,” he adds. “All marketers who do this will need to have procedures in place to monitor such blogs for compliance and to address noncompliance when it happens.”

But Goldstein — like Hailey — warns DR marketers not to become so focused on the blogger aspect of the new guides that they forget to disclose material connections with other endorsers. “In the context of traditional DRTV advertising, marketers will often provide not only product but other assistance to potential endorsers, such as personal trainers, special diets, counseling, etc. In light of the FTC’s revised Guides, these additional incentives may also need to be disclosed. The extent and manner to which such disclosures may be required will need to be assessed on a case-by-case basis. It is clear however, that the FTC is likely to take a very conservative view in the future regarding the types of connections that may need to be disclosed.”

If the Blogger Errs, It’s on You
As Hailey so simply puts it, if a blogger fails to disclose a material connection with a marketer, “The FTC may blame you. Marketers must tell all these people what the rules are, and do a reasonable amount of monitoring to make sure that the required disclosures are being made.”

While that may seem patently unfair, it is now part of the FTC’s operating principles when overseeing these new guides. Rothman agrees with Hailey, adding, “You, the product marketer who benefits from the blogs and tweets, will also be on the hook for deceptive advertising where misleading statements are made and material connections are not disclosed. That means if your affiliates, bloggers and tweeters do not follow the rules, you could be held liable.”

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