Online advertising and marketing tactics have strained outdated Federal Trade Commission guidelines for endorsements. Anonymity on the web has made it easy for nearly anyone to pretend to be something they are not. Just think about how often you may see “Featured on CNN, New York Times, etc”, and then you seriously begin to consider the advertiser’s claims.
In the past couple years, the FTC has investigated many severely misleading advertising campaigns with the aim to protect consumers from deception. Here are the main highlights from the most recent update in 2009:
The revised Guides – issued after public comment and consumer research – reflect three basic truth-in-advertising principles:
- Endorsements must be truthful and not misleading;
- If the advertiser doesn’t have proof that the endorser’s experience represents what consumers will achieve by using the product, the ad must clearly and conspicuously disclose the generally expected results in the depicted circumstances; and
- If there’s a connection between the endorser and the marketer of the product that would affect how people evaluate the endorsement, it should be disclosed.
Unfortunately startups tend to put everything on the line in the hope of converting each visitor on their landing pages. From my personal observations, I’ve seen false press mentions or misleading product claims more than anything else. The recently updated guidelines indicate the trouble is easy to avoid. For example, if the advertiser shows that they’ve been mentioned on any media or press outlet, they must actually prove this claim with something like a link or a quote. Secondly, if the advertiser quotes a customer, the experience conveyed must be typical for any customer to expect.
An undesired situation could arise if the guidelines are repeatedly not followed, both for the misleading advertiser and the organization for which they are misrepresenting. While disclaimers can relieve some responsibility to the consumer, the advertiser should understand the potential long-term damage to their brand.
Looking for a company that documents their press coverage very well? Check out Airbnb.
Don’t be afraid to advocate for other consumers at risk: https://www.ftccomplaintassistant.gov/
The Federal Trade Commission Act allows the FTC to act in the interest of all consumers to prevent deceptive and unfair acts or practices. In interpreting Section 5 of the Act, the Commission has determined that a representation, omission or practice is deceptive if it is likely to:
- mislead consumers and
- affect consumers’ behavior or decisions about the product or service.
In addition, an act or practice is unfair if the injury it causes, or is likely to cause, is:
- not outweighed by other benefits and
- not reasonably avoidable.