What are the FTC’s Basic Rules about Managing Online Buzz?

What are the FTC’s Basic Rules about Managing Online Buzz?

In accordance with the Federal Trade Commission ("FTC") revised Guides Concerning the Use of Endorsements and Testimonials in Advertising, companies cannot have employees post glowing recommendations of the company’s services on news and tech sites without disclosing their true identity.  Misrepresent, expressly or by implication, the status of any user of a product or service — for example, that someone is an independent, ordinary endorser if that’s not the case.  And must clearly and prominently disclose any material connection between an endorser and the company (or any other entity advertising, selling, or promoting a product) when a connection exists. 

Propose to disclose.  According to the FTC’s Endorsement Guides, it’s the law — and it’s always been the law under the FTC Act — that consumers have a right to know when there’s a material connection between an advertiser and an endorser.  Here’s how the Guides put it:  “When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.”

View from the top.  Although the FTC alleged that corporate higher-ups were directing the campaign challenged as illegal, savvy marketers understand the importance of discouraging similar deception by staffers.  The first step:  Craft a company policy in keeping with the law.  Next, make sure your employees know what the rules are and that you’ll take swift action if you uncover noncompliance.  That fingers-in-the-ears la-la-la gesture isn’t an effective legal defense if violations come to light.  To make in-house training easier, the FTC has free resources available on the new Endorsements page of the BCP Business Center.

Spread the word.  You’re in the loop on what the Endorsement Guides require, but you can’t assume others are.  If you work with ad agencies or PR firms that help manage your social media presence, emphasize the importance of living up to your high standards.  They may be experts on creating online buzz, but are they up to speed on what the law requires?

 

For more information, see here: http://business.ftc.gov/documents/be-vigilant-about-managing-online-buzz

 

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