On October 5, the Federal Trade Commission published their Final Guides Governing Endorsements, Testimonials. According to the FTC, the publication is a set of guidelines that advertisers must follow in order to keep their endorsement and testimonial ads in line with the FTC Act.
So what does this mean for the fashion blogging community? Simply put, this will affect any blogger who publishes testimonials, endorsements or advertisements on their blog that involve a ‘material connection’ between the advertiser and the blogger. To find out if this will affect you and your blog, we asked several experts on the subject to give us the low down on what this means for the average fashion blogger. Our experts:
- Jacqueline Klosek is an attorney with Goodwin Procter LLP and has authored several books concerning privacy and information law.
- Jennifer Taggart is an attorney with 15 years experience in consumer law. Jennifer has written on the new FTC guidelines for a variety of sources. Jennifer also put together a free webinar on FTC Basics.
- Kendra Simpson is an associate at Zócalo Group, a word of mouth and social media marketing agency out of Chicago. Zócalo Group President/CEO and the Word of Mouth Marketing Association (WOMMA) president-elect, Paul M. Rand, has worked closely with WOMMA to help guide the FTC in making these changes.
- Kevin Houchin is a Creative Business Lawyer who advises people on how to maximize creativity, build businesses, and protect their intellectual property. Kevin also put together SiteCompliant.com, a website devoted to helping bloggers create to handle these issues.
- Liza Barry-Kessler is an attorney at Privacy Counsel whose practice area is focused on social media. Liza serves as an advisor to the Blog With Integrity project.
1. By way of an introduction to the new FTC guidelines, can you briefly sum up what they mean for fashion and beauty bloggers, in particular?
JACQUELINE: The FTC recently revised its Guides Concerning the Use of Endorsements and Testimonials in Advertising. The Guides address endorsements by consumers, organizations, celebrities and experts. It is intended to give guidance to advertisers on how to ensure that their endorsement and testimonial advertisements are in compliance with the FTC Act (which regulates a wide range of commercial activities impacting consumers). The Guides were last updated in 1980 and regulators concluded that additional revisions were needed to address social media. The Guides introduce a number of changes. Most significantly for bloggers, the revisions to the Guides make it clear that the long-standing principle that “material connections” between advertisers and endorsers must be disclosed to consumers. In practice, this would generally mean that a blogger who receives some kind of benefit, such as a cash payment or a product/service to review, would need to disclose it. Beauty bloggers will need to be aware of the fact that the FTC’s rules concerning endorsements and testimonial ads will apply to their blogs. This means that if a blogger receives something of value to promote or otherwise endorse a product on their blog, they will need to disclose this. Of course, other standard rules will apply as well, meaning, for example, that, among other rules, paid endorsements cannot be deceptive, meaning they cannot contain false or misleading claims.
LIZA: If a fashion/beauty blogger receives free products from companies, marketing/PR agencies, or advertisers, and then “endorses” those products, they must disclose that relationship in a way that is “clear and conspicuous” to the reader. An “endorsement” is, essentially, any mention of a product that the blogger did not purchase. It does not have to be a full blown review. The “clear and conspicuous” notice requirement is a very strong requirement, and the FTC has made it clear that a blanket disclosure in an About or FAQ page is not good enough. Indeed, placing a disclosure at the end of a post is probably not good enough; the FTC has indicated that disclosures should be at the beginning of a post. Ironically, the FTC has suggested that if a blog is strictly a review blog, where consumers clearly understand that the blogger has received all of the products in question for free, then a less aggressive disclosure may be acceptable. The notice requirement also applies to fashion bloggers who are “sponsored” by a company or brand, or who otherwise have a “material connection” to the product. Finally, fashion and beauty bloggers need to be on notice that the disclosure requirements apply to any affiliate marketing programs — including, for example, bloggers who link to Amazon and receive a commission for products that are sold through that link.
2. Several websites have expressed their shock over the new guidelines and wonder whether bloggers should have to abide by the same rules as, say, a journalist at a fashion magazine. Given that this is a time where fashion bloggers are getting front-row seats at Paris Fashion Week, is it really that surprising?
JACQUELINE: No, I don’t feel it is that shocking or surprising at all. Bloggers are having a tremendous impact on the market. Social media is a very influential and relevant force. Everyday people with blogs can have a tremendous impact upon how products and services are perceived by the marketplace and, ultimately, upon what products and services are sold. Accordingly, I’m not that astonished that the FTC perceived a need to regulate endorsements and testimonials in blogs and other forms of social media.
JENNIFER: No, it isn’t surprising. Most fashion magazines have strict editorial/advertising policies – separation of church and state, so to speak. Now, perhaps those lines are sometimes blurred, but there generally are strict policies in place.
KENDRA: With the passing of many hard-copy publications, bloggers have begun to fill that gap of editorial coverage for readers. The guidelines are really for the best interest of the entire industry. The standards allow for a base of ethical expectations.
KEVIN: Swag or special treatment could be seen as a “material connection” that would reduce the credibility of the review or testimonial – “blogger” or “journalist” doesn’t matter. If they’re getting something in return for the review, they must disclose the connection.
3. That being said, what rules do journalists follow when it comes to sample products, from miniature beauty samples through to a pair of jeans?
JENNIFER: The guides apply to all forms of media. However, the FTC believes that most traditional media outlets have strict guidelines covering editorial vis-à-vis advertising. Also, one FTC spokesperson distinguished that with a print magazine or newspaper, the corporate or business entity actually is what receives the product, not the individual reviewer. This argument has been challenged by many since in reality the reviewers usually keep the book or the product.
LIZA: There’s not a clear answer to #3. The FTC presumes that journalists working for traditional publications do not get to keep the sample products provided to their employers. They also presume that consumers reading, for example, Vogue, know that the reviewer did not go out and buy the beauty products she reviews. In contrast, the FTC believes that consumers do not know whether or not a beauty blogger purchased the product or got it for free.
4. The FTC guidelines use the term ‘New Media’ to cover individual bloggers and webmasters who may use blogs, Twitter, etc to ‘endorse’ a product. Does this lump the average, 13-year old blogger in Florida in with websites like Refinery29.com and Fashionista.com, for example?
JACQUELINE: Yes it does and with good reason, I believe. As the FTC has pointed out, one of the main reasons for the changes is to educate. Established writer such as those working for a major blog such as Fashionista.com are likely to have some knowledge of basic rules of journalism and accepted ethical practices. On the other hand, the “ordinary person” with a smaller scale blog may be less aware of their obligations and responsibilities with respect to ethical practices. If the revisions to the Guide help to educate this group of bloggers, the FTC may have accomplished a substantial part of its goals.
JENNIFER: Potentially, yes. Some of the more established websites may have advertising vs. editorial policies in place such that the FTC would treat them as a print magazine, at least according to Mary Engle (Director of the Federal Trade Commission’s Division of Advertising Practices). But, basically, we are all the same – and if you do an endorsement, then you must comply with the FTC guides.
LIZA: Yes. The FTC says that it used the term “New Media” because it does not want to lock itself into today’s technology. We have no idea what “the next big thing” will be, and the Guides are not revised on a frequent basis, but the FTC wants us to understand that they will still apply. The last time they were revised was 1980.
5. Finally, the FTC guidelines state that a company requesting a review is as liable, if not more, than the blogger, when it comes to ensuring full disclosure of the relationship. What are your suggestions both companies approaching bloggers and for bloggers receiving emails from companies – what should be discussed from the outset of the arrangement?
JACQUELINE: You raise a very good point. Bloggers and companies seeking to market their goods must discuss these issues up front and agree on the terms that will govern their relationship. Bloggers should also be prepared to include appropriate disclaimer language on their sites.
JENNIFER: Companies MUST have policies in place if they are giving free products or services to social media users, or using street teams or brand ambassadors, or paying spokespeople, etc. Those companies must have agreements or contracts of some type outlining the obligations of the bloggers, social media users, etc. to disclose material connections. Also, companies must monitor the endorsements that are written by these bloggers, social media users, etc. to whom they give free product or services to make sure that there are no false or deceptive statements made, and if there are, to follow up to get those statements corrected or deleted.
KENDRA: Marketers should request full disclosure for participation in a review. This can be as simple as asking the blogger to identify when they have received a product from the brand in their review post. If the blogger does not receive directive from the company regarding disclosure they should have a basic disclosure statement that they adhere to for all reviews.
KEVIN: There should be a policy in place and a cover letter stating that full disclosure is expected, and there should be active follow-up to make sure disclosures are actually being made. Marketers also need to have a set of enforcement policies including letters that they send to people who are not making the appropriate disclosures.
LIZA: The burdens on companies are significant. For companies who sponsor bloggers, they should revise their writing agreements and any other contracts, making sure that the bloggers agree to comply with the FTC Guides. They may want to include educational material, specific elements that should be included in the disclosure, or even language they would like the bloggers to use if they review the product. For companies whose “material connections” with fashion and beauty bloggers are less formal, the monitoring program is going to depend on the size and scope of the relationships. At a minimum, companies need to be regularly searching online for references and links to their products, and making sure that anyone that they have provided a product to is describing them accurately and disclosing the relationship. It would be a good idea for those companies to include educational material with their product samples, to make sure that the bloggers understand their responsibilities.
ABOVE: Bryanboy, Tommy Ton, Garance Doré and Scott Schuman Front Row at D&G (Source: WWD).
As part of the interview, we asked our experts to comment on six scenarios that may be common to fashion bloggers.
SCENARIO 1: A blogger is sent an expensive pair of shoes to try on, keep and review. The post does not have to be written in a positive light. Is this still considered an endorsement by the FTC thereby requiring disclosure?
JENNIFER: If this blogger writes a review, the blogger must disclose.
KENDRA: Whenever something of value is received and posted about, it should be disclosed.
KEVIN: This is the exact type of material connection the FTC is after. Yes, the connection must be disclosed – at least that he/she got the shoes to review and keep.
LIZA: Yes. If this blogger writes about the shoes, she should include an appropriate disclosure.
SCENARIO 2: A blogger runs a shopping blog. Each post contains products available for purchase. While not every link is an affiliate link, several links are part of an affiliate program that the blogger participates in. Must the blogger’s participation in the program be disclosed in each and every post, or can a blogger write a general disclaimer that covers the entire blog?
JENNIFER: From the comments made by the FTC, it appears that the blogger would have to disclose in each post, not with a general disclaimer covering the entire blog. To date, there are no examples so it is difficult to predict what will ultimately be judged to be adequate, but right now, the FTC has indicated that a general disclaimer somewhere else on the blog is not sufficient to cover links in a post.
KEVIN: Everyone is asking that. I HOPE that it ends up that a general disclosure is good enough, but honestly, I doubt it. I think until we know for sure everyone should disclose the affiliate or other material connection in every individual interest. Hopefully the combination of “affiliate” next to the link or in the post, plus a general disclosure, will be enough.
LIZA: This is one of the most complicated likely scenarios that many bloggers will face. The FTC has indicated in discussion of the Guides, particularly in the Blog With Integrity Webinar on 11/10/09, that there does not need to be a separate disclosure for every affiliate link. However, there should be one for every post or page in which an affiliate link appears. A general disclosure is not sufficient.
SCENARIO 3: A blogger is sent several pieces of clothing to sample. They try them on, post their reviews and then send them back. Does this need to be disclosed? Would this be considered an endorsement, given there was no payment of any kind?
JENNIFER: This is similar to an example given by the FTC with respect to books. If the book is sent back, then there is no compensation, so there is no requirement to disclose.
KENDRA: It is best to disclose as much as possible. The blogger may simply state that they have been given an opportunity to test a product during a specified period of time so that their readers know they actually experienced the product/item, but that they do not own it.
KEVIN: It’s still an endorsement, but that probably wouldn’t be considered a “material connection” requiring disclosure.
LIZA: The FTC comments around the Guides suggest that this would not meet the test for an “endorsement” and would not require a disclosure statement.
SCENARIO 4: The guidelines state that you cannot make false or unsubstantiated statements regarding products you review. If a blogger says that the moisturizer she tried left her skin feeling healthy and hydrated, is she making a false or unsubstantiated statement? Should she follow up with a less-general statement, suggesting that every person’s skin is different?
JENNIFER: In this example, the blogger is talking about how the moisturizer worked on her skin, which is fine. Now, if she went on to say that it will make all skin types look 20 years younger, than the statement would require substantiation.
KEVIN: She’s giving an opinion then, and negative reviews probably aren’t going to get anyone in trouble with the FTC. It’s the statements that “my skin cleared up in 3 days of using this product” that may get her (and the manufacturer) in trouble if a 3 day response is not “Generally Expected Performance.”
LIZA: It depends on the blogger. An expert blogger with extensive experience with different moisturizer ingredients that she knows react differently to different skin types could be held to a higher standard by the FTC than a more “ordinary consumer” type of blogger. An ordinary consumer blogger can safely say what she liked about the product, so long as she does not make health claims that cannot be supported by the brand’s research. (For example, “This ordinary moisturizer cured my eczema!”)
SCENARIO 5: A shopping blog writes a post about the best boots for the coming season. While most of the writing is their own, some copy is taken from the product page of a particular pair of boots, for which they provide an affiliate link. Should those boots, which the blogger has not seen in real life, be bought by a reader of their blog who in turn finds that they are not made of leather, as both the original product page and the blogger stated, would the blogger be held liable?
JENNIFER: Technically speaking it would seem that both the blogger and the company would be liable. However, in this case, the FTC may not be particularly interested in pursuing the blogger. And it illustrates that bloggers should consider including indemnity provisions in contract agreements for review to protect themselves.
KEVIN: Potentially, yes. The bloggers/endorsers CAN get in trouble if they are reposting false or otherwise deceptive content – even if it was provided by the product manufacturer.
LIZA: The FTC is very reluctant to comment on such specific examples. However, in this example, assuming that the blogger is otherwise compliant with the FTC Guides, it is unlikely that the FTC would hold the blogger responsible.
SCENARIO 6: A company writes to you and suggests that they would be willing to be ad space on your blog if you were to be kind enough to write a post about their company. This is not a direct money-for-review situation. What is the correct thing to do in this case?
JENNIFER: You would need to disclose the material connection.
KENDRA: The blogger is still receiving compensation for a post, so this should be disclosed.
KEVIN: Yes, it’s still a material connection. If I know that you’re getting paid “in kind” for your testimonial, it will reduce its credibility and that’s what the FTC is after.
LIZA: This appears to meet the test of a “material connection” and would have to be disclosed. Ethically, it seems like a bad idea. I would advise a client company or a client blogger not to do business this way.