The Federal Trade Commission (FTC) recently updated its answers to a series of frequently asked questions (New FAQs) about its Guides Concerning the Use of Endorsements and Testimonials in Advertising (Guides). The updated FAQs are further proof that endorsements and testimonials are once again on the FTC’s radar, and marketers and their agencies should expect an increase in enforcement over the upcoming months.
This summer, Allison Fitzpatrick, Advertising, Marketing & Promotions Partner, and I co-authored an alert on the FTC’s updated answers to FAQs about endorsement guides. Given the long-awaited guidance, I wanted to share with you its potential impact. In the next coming weeks, I will be addressing the following affected areas: Social Media, Likes, Pins, and Posts, Twitter Disclosures, YouTube and Online Videos, Influencers and Ambassadors, Celebrity Endorsements, Social Media Promotions, Online Reviews, Employee Endorsements, and Monitoring.
This week, I will specifically be focusing on: social media, likes, pins, and posts, Twitter disclosure, and YouTube and online videos.
Social Media Likes, Pins, and Posts:
According to the FTC, clicking on the “like” button, pinning a photo, or sharing a link as part of a paid campaign “probably” requires a disclosure of the material connection between the endorser and the company.
Because certain services (i.e., Facebook’s “like” button) do not allow for disclosures, companies should not encourage endorsements using features that do not allow for clear and conspicuous disclosures. That being said, the FTC is unsure how much stock consumers actually put into “likes” when deciding to patronize a business. As such, a company’s failure to disclose that a “like” was incentivized may not be problematic.
In contrast, if a company buys fake “likes” from non-existent people, or people who have no experience using the product or service, the “likes” are clearly deceptive, and both the advertiser and the seller of the fake “likes” could face enforcement action.
The FTC does not mandate the specific wording of disclosures. However, the same general principle – i.e., that people get the information they need to evaluate sponsored statements – applies across the board, regardless of the advertising medium and any limitations of that medium. Therefore, while the FTC recognizes Twitter’s character limitations, a disclosure is still required. The words “Sponsored,” “Promotion,” or “Paid ad” are likely effective and use only a few characters. While starting a tweet with “Ad:” or “#ad” may also be effective.
YouTube and Online Videos:
According to the FTC, disclosures for a YouTube video should not be placed in the description of the video because consumers could easily miss them. The disclosure has the best chance of being effective if it is made clearly and prominently in the video itself (although the disclosures could be placed in both the video and the description).
As for when in the video the disclosure should appear, the FTC recommends having the disclosure at the beginning of the video and recommends multiple disclosures during the video. The FTC cautioned against promoting links to videos that bypass the beginning of the video or disclosures that have been obscured by YouTube ads.
The FTC noted particular concern for disclosures that take place over several hours (such as with live streams) because they could easily be missed by viewers who miss the beginning of the stream, or at any other single point in the stream. The FTC recommends multiple, periodic disclosures throughout the stream or, as a best practice, a continuous, clear and conspicuous disclosure throughout the entire stream.