Federal Trade CommissionFTC Issues New Guidance on Endorsements and Related Online Disclosures

The Federal Trade Commission (FTC) announced it updated the FAQs to its Guides Concerning Use of Endorsements and Testimonials in Advertising. This is important because three specific clauses effect the sweepstakes community from both a marketing and entrant’s perspective.

Twitter:  The FTC updated the FAQs to state that starting a tweet with “Ad” or “#Ad” would “likely be effective” in communicating that a tweet is an advertising message (as opposed to its previous iteration which stated it “might be effective”).  As a fundamental matter, the FTC reiterates its previous guidance that there is no specific wording necessary for Twitter disclosures, explaining that it will assess the sufficiency of a disclosure based on the broad principle that the consumer must receive the necessary information to evaluate the sponsored statement.

This point is important because: many of the bloggers or sites you follow are frequently hired to promote products, services and giveaways. I have seen #ad at the end of posts, but now they should be at the start. Do not dismiss #ad posts before reading it in full as it might be, for example, one of my tweets promoting a giveaway you may wish to win.

Social Media “Likes”:  “Like-Gating” has received a lot of publicity over the past several years, and the FTC acknowledges that people enjoy sharing their fondness of a particular product.  With that in mind, the new FAQ’s add a section on social networking sites, stating consumers are allowed to write about their love of a product without making disclosures – as long as they are not being “rewarded.”  However, the FAQs state that “if you’re doing it as part of a sponsored campaign or you’re being compensated – for example, getting a discount on a future purchase or being entered into a sweepstakes for a significant prize – then a disclosure is appropriate.”  The guidance acknowledges that it is unclear at this time “how much stock social network users put into ‘likes,’” and giving incentives for “likes” in fact “might not be a problem.”  However, the FAQs add that “[a]n advertiser buying fake ‘likes’ is very different from an advertiser offering incentives for “likes” from actual consumers.”  If the likes are from people who are not consumers, they are clearly deceptive.

This point is important because: this clause goes against Facebook’s own promotional guidelines with regards of incentivise consumers to garner likes, not to mention that advertisers could inadvertently buy fake likes from Facebook directly (see video Facebook Fraud for further details).

Social Media Contests:  The new FAQs add guidance reminding businesses engaging in social media contests that they must disclose clearly that the post is being made as part of a sweepstakes or contest.  In other words, simply stating #XYZ_Rocks” is not sufficient without a hashtag disclosure of “contest” or “sweepstakes.”  These words should not be abbreviated, as the FTC notes that “Sweeps” probably isn’t sufficient because many people “would not understand what that means.”

This point is important because: all companies now promoting giveaways via social media channels must add in the hashtag #sweepstakes, #contest or #giveaway, shortening the number of characters available for the sponsor, company or agency for the promotion itself or for you to retweet (not so important for sharing or pinning).

Have you seen any of these changes online yet?