Heard of the New FTC Regulations? You Absolutely Must Read This Before You Write Another Blog Post or Promote Another Product!
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Yes, that title was a little long, but I wanted to make sure that I had your attention. As most of you may be aware (or should be, at least) yesterday new FTC regulations came into effect concerning the use of testimonials and endorsements in advertising. A lot of the new regulations directly affect online marketers, so I decided to go straight to the source to see exactly what this would mean for me (and for you, my readers).
I went to http://www.ftc.gov/opa/2009/10/endortest.shtm and actually read through the whole 12 page guide – specifically the Federal Trade Commission 16 CFR Part 255 – Guides Concerning the Use of Endorsements and Testimonials in Advertising. Here are the highlights as they pertain to us online marketers:
First off, there’s the matter of endorsements. The FTC specifically states that endorsements must reflect the honest opinions, findings, beliefs, or experience of the endorser. This part may sound pretty straightforward, but how they define that ‘honesty’ has some big ramifications about how you can write your sales copy or other advertising or promotion pieces.
The big term that the FTC is using is “substantiation of representations conveyed”. What this means is that you’ve got to be able to prove (and back up) any claims you make. Which I’ve always told you to do, but what’s changed is what they consider proof. While I’ve always used real examples for my proof, I (and everybody else) would naturally pick the best results out of the bunch to highlight. It’s a natural thing to do.
But now, no longer can you say, about a weight loss product, for example, “Lose 20 pounds in 2 weeks!” just because one of your customers did. Now, any claims you make have to be representative of the average experience of the user, not the exceptional ones. And you can’t just cover your butt with a “results not typical” disclaimer, either – the FTC has deemed that “disclaimers did not adequately reduce the communication that the experiences depicted are generally representative.” In English, that means that even if you say that results are not typical in small print, it doesn’t change the fact that you’re giving the impression in the big giant headline that everyone could lose 20 pounds in 2 weeks.
And even if you have a ringing endorsement of a successful customer (which of course is indicative of the average experience), you also have to disclose any other factors that affected the result. For instance, that person that lost 20 pounds in 2 weeks didn’t just take your supplement, but they also went on a low-calorie diet and worked out for 90 minutes a day. If you wanted to use that person as a testimonial, you would have to disclose all the factors that influenced the result.
Same goes for the use of before/after pictures. You can’t just show the dramatic pictures and let them speak for themselves. Again, if it was more than just your great product that influenced the result, you have to disclose it.
Also, when you are using testimonials, a lot of people (including me) have always recommended using pictures to go along with the testimonials to help to personalize them. Now, you can’t do that, unless you have the actual picture of the actual person. You can’t just take a random picture that you have the rights to and match it up with a testimonial. The FTC feels that is misleading.
In all, each change, taken by itself, is a small thing, but when taken together, will greatly affect how we operate as online marketers. I recommend that you go to the FTC site mentioned above and check things out for yourself – everyone’s business is unique and, although I tried to point out all the important things, you might want to check how this affects you specifically.
In fact, there was so much to cover, that this discussion of the new FTC regulations is going to need another post. Next post will be about the new guidelines regarding “Disclosure of Material Connections.” They certainly have a way with words over at the FTC, don’t they?
PS – Remember i am NOT a lawyer and not giving you legal advice… you need to contact your own legal counsel on this matter… don’t be telling anyone you thought you were ok cause a cow told you… trust me it don’t work.
Next Post in Series: I Was Not Paid By The FTC For This Review
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The amount of bullshit going around needed something doing about it BUT I really fear for people who believe everything they read online. How do they get through life? I’m also glad I don’t live in the old “we’ll make even more laws to protect the even stupider people”, US of A.
Truly horrible regulation. It’s not only completely unenforceable, it’s blatantly unconstitutional. Expecting someone like Chuck Norris to disclose that he has been paid to endorse the Home Gym when he tweets about “going to work out on my home gym” is about as realistic as expecting anyone to think that Chuck Norris is a reliable source of information to begin with.
The disclaimer text on sponsored tweets or tweets that contain affiliate links will be longer than 140 characters all by themselves.
Here’s an idea… crazy as it may sound. Why not make it so that websites that offer affiliate programs display information on their site when a visitor comes from an affiliate link. That way you don’t have to disclose it every time you link to it… the disclosure is handled at the single “destination” instead of every possible end point. That would make sense so it’s certainly not going to happen.
Oh, and celebrities being held legally responsible for their endorsements that they get paid for is brilliant. Just exactly what this country needs – more lawsuits.
It is my understanding that the actors will no longer be able to just read form a script that they are being paid to read from and the advertisers that are paying the actor will have to rewrite their scripts. This is what the ruling says on that:
“Example 4: A well-known celebrity appears in an infomercial for an oven roasting bag
that purportedly cooks every chicken perfectly in thirty minutes. During the shooting of
the infomercial, the celebrity watches five attempts to cook chickens using the bag. In
each attempt, the chicken is undercooked after thirty minutes and requires sixty minutes of
cooking time. In the commercial, the celebrity places an uncooked chicken in the oven
roasting bag and places the bag in one oven. He then takes a chicken roasting bag from a
second oven, removes from the bag what appears to be a perfectly cooked chicken, tastes
the chicken, and says that if you want perfect chicken every time, in just thirty minutes,
this is the product you need. A significant percentage of consumers are likely to believe
the celebrity’s statements represent his own views even though he is reading from a script.
The celebrity is subject to liability for his statement about the product. The advertiser is
also liable for misrepresentations made through the endorsement.”
It will be interesting to see how these commercials get changed to fit the ruling and how the FTC handles these commercials.
I’m thinking that they will have their hands full going after these ads as soon as consumers start filing frivolous lawsuits, which you know they will. They will be thinking this is their free ticket to wealth. It will no longer be “will they sue?” It will be “how much will they sue for?”.
These large corporations may have the deep pockets for FTC payoffs and consumer law suit pay offs. Who knows how it will play out.
What really scares me is that the people that are working from home on the Internet and just make enough to pay their bills, but are without the means for payoffs or lawsuits, will be the ones attacked first. Meanwhile, the big businesses it will continue to remain in the “good old boy network” and will carry on with business as usual.
Today is 5 December yet I am still seeing Extend’s commercials on the T.V. at all hours of the day and night. Apparently they aren’t afraid of the FTC or of lawsuits. Makes me wonder who got paid off there?
The hardest part is being vague and still getting signups!
I would love to see some examples of before and after FTC rulings of things people are selling online. Especially the weight related things.
Would be good to see what is acceptable and what is not.
What are they allowed to say about their weight loss product now? ‘If you follow this guide you may lose weight!’
I do like that all testimonials and pictures will have to be 100% accurate and all details of what the person did will have to be disclosed. You would totally buy a product if you knew EXACTLY what the person did to lose the weight, then you can follow EXACTLY what they did and you should be relatively on your way to success
Even if you can give somebody a guide that says do this, do this and you’ll get this most people are far too lazy to do it.
For example in weight loss, if I told somebody to eat less, exercise twice a day and take a supplement because it’s been proven to help other people lose weight then the average person would be stuffing themselves and quitting the exercise after less than a week. They’ll take the supplement because it requires no effort or commitment. They’ll then bitch it doesn’t work.
90% of the products pushed via affiliate networks are aimed atlazy, stupid people. An average person of average intelligence landing on your usual weight loss re-bill landing page will click away in seconds. They know it’s crap. When you’re talking about conversion rates this is exactly what is meant, how often can you find a stupid person?
Something had to be done to bring a little more honesty into the game but for my money the FTC have sided way to much with the stupid people. You can’t legislate against stupidity, well in America they can try but I think they’re onto a loser that will have the courts dragged down for years.
- very funny, but often true – “When you’re talking about conversion rates this is exactly what is meant, how often can you find a stupid person”
Hi guys
It is true that there are lots of stuff available on the internet that suggest different kind of things which most of the time readers tend to believe easily. I prefer to see the result first before going to try the said information like this one on FTC. No offense. . .
Kind Regards
Sam
X
If yoiu stay away from tetaminials that talk about money made. If you sales copy or posts are not over the top BS. If you build your business str8 up
Then FTC regs won’t affect you.
this is the type of regulation that would make a company’s price plummet such as iStockPhonto if it were publicly traded – you can’t use hottie models anymore in your testimonials(:
I think its all BS. The regulations will only impact people that follow the rules, like guns and drugs, this only impacts those that follow the rules.
You can’t tell me that an IMer in Russia, making 50K a day, cares about this. So, who does care though are the CPA networks. They can be penalized as well.
This change really makes it tough on Diet, BizOp and Niches that rely heavily on the testimonials. Watching TV last night I noticed that it hasn’t impacted the late night infomercials.
-rs
The new regulations affect people who hire writers to write product reviews, since there is a “material consideration.”
It’s always been unethical, now it’s illegal, too.
Nicki
I am not really aware on the FTC statement. As long as I analyse the testimonial first, whether it’s logic and acceptable with normal view or just a dreamer laugh…
Well, think of the bright side…All of those people out there who whine how much they hate being sold to have their wish. Pretty soon we won’t be able to sell anything online and when they finally see the need to go looking to buy something, it won’t be there anymore.
Johnny Cow,
First, I like to say great post.
I myself welcome these new FTC regulations. I as you have always taken the hype and B.S out of any sales funnels which I have created for myself and clients.
One of my partners is currently swamped with work reviewing direct sales companies websites. Lots of them, really most of them are not compliant with these new regulations.
Also so many affiliate products are going to have major issues. I was looking at one of my sites and have already removed certain site with awesome products until they get fully compliant.
I feel everyone better get their site’s straighten out by the end of the year at the latest. I have heard through the grape vine that FTC is going to get hit this aggressive after the first of the year and I mean real aggressive.
Once again thanks for the great post…..
I think there is to much hype/fear mongering over a completely unenforceable regulation. This MAY affect you if you’re in the US, but come on folks, how is a US regulation going to stop a small time affiliate marketer operating from some hidden corner of, say Ireland.
I’m going back to building back links, better use of my time than stewing over a US regulation.
This is a US law. If you are living outside the US and you promote US products you can still fake testimonials..
Most people will simply not care ..
Is that so? Then, there’s the loophole anyone can use. Hey, everybody, I’m open to become some american webmaster’s dummy. Let’s discuss my cut. LOL.
I’ve never used testimonials before, however I was planning on marketing a product within the next couple of weeks. I found this link through an email, and I’m glad I clicked it. I’ll make sure, if I use testimonials in the future, to word them with caution.
You are not the one that should be wording or writing the testimonial. That is the point.
The testimonial should be coming from someone that has used the product and is writing the testimonial for you as an endorsement. You could edit the testimonial for spelling and grammar, but essentially it should be in the words of the person giving it.
Now, I wonder, should we be asking the folks that happily give us their testimonials, “Did you actually read this e-book or is it still sitting on your hard drive?” “If you did read it have you taken action?” “If you did take action, how is this working for you?”
I’m just sorry for all the people who built a business on “review” sites…
the concept was very popular – and now that they have to disclose material connections, may visitors may not accept the “reviews” as impartial…
which is likely to cost some people some money…
but on the bright side….
it should take some of the BS out of the way – and eventually legit marketers will benefit from it – due to increased consumer trust.
just my 0.02c…
pj
I don’t which is more idiotic…the FTC thinking that these new ‘regulations’ will make any meaningful difference to the way marketing is done online, or that they think they’ll be able to effectively enforce them. A law is only as effective as it is enforceable. How many websites are there online? Riiiight. Good luck, fools. More tax payer dollars down the toilet!
It will be interesting to see how this FTC ruling will be enforced…I am going to the url posted above to read the thing in it’s entirety…Thanx Cow for the post…Kenney
I think this is both good and bad. I think it is bad because it is just one more thing for us internet marketers to get to do. I think it is good because those of us who are already into the matrix of internet marketing will most likely be able to leverage this to our advantage against our competiton.
The truth is that there is always a way, ALWAYS!! For example you could have 6 testomonials having 3 positive and 3 not so positive. The 3 that are not so positive can read something like this.
“I only lost 1 lb in 4 weeks and even though I didn’t really take the supplement consistently, workout, or do any aerobics as advised I thought I would magically loose weight buy staying lazy. Next time maybe I’ll give it a real attempt and do what I’m told!”
Heck reward honest testimonials from lazy customers. Blend them in and your still sending the same message. Sounds compliant to me.
Now, for those of you who want to know who I am, I am on the up and coming. So pay attention to my name and get on my list.
Thanks John,
Michael Shepherd
It is a shame that people have misled, schemed, and flat out lied about their products in services so much that the government feels obliged to step in.
Thanks guys, its nice to hear these changes stated in common english. Reading FTC documents isn’t fun (unless you desperately want to sleep).
Looking forward to the next post!
Joe
I applaud the new intent to enforce old regulations. I just hope they don’t enforce against little people while letting the mega corporations slide.
Selling froth and bubbles always seemed wrong to me, although I will miss reading the hyped up copy.
Linden
The scammers will continue to mislead. A few of them might even suffer consequences for their scamming.
Rather than playing victim about this ruling, though, we can look at the positive side. Following the rules gives us a chance to differentiate ourselves from the scammers.
I imagine that many publishers will ignore the ruling and do business as usual. That means that by simply following the rules and being upfront about it, we will come across as different from what people expect.
Disclose what needs to be disclosed in connection with a personal statement of your business philosophy — a philosophy founded on honesty and genuine value.
Customers are hungry for someone they can trust.
Yes, it will take some creativity to generate the same kind of desire to buy that sprang from using exceptional results that we knew that most people wouldn’t achieve.
Marketers, though, are a resourceful bunch. I’m confident that we’ll find ways to tap into people’s emotions with honesty and transparency — and maybe, in the process, find ways that help raise the average results of our customers instead of resigning ourselves to collecting money from customers who never use our products to their fullest potential and shrugging off their lack of results as being beyond our control.
All obstacles contain in them hidden opportunities. I have no doubt that, as we get used to the new rules, we’ll find opportunities that this obstacle conceals.
If you aren’t a US citizen, the FTC can still ruin your day. If you promote Clickbank products, they can ask Clickbank to delete your account. Clickbank will likely comply because they are based in the US.
This would be true for any affiliate network based in the US. The FTC is very smart at finding your Achilles heel.
The ftc has no business interfering in international commerce and certainly has no jurisdiction over website owners – especially non-americans. In addition, this agency is operating on borrowed money from china – they are broke and will certainly have no money to enforce their so-called guidelines upon an Internet population of 1.6 billion. Spreading crap posts like this, Jason, is merely playing into their game of enticing fear into website owners – because that is the only power the ftc has: an illusion. The free market will take care of dishonest sellers. The caveat of “buyer beware” is enough – bureaucratic american federal government regulations only impede such necessary free market forces.
I wonder where the US gets all of its seemingly inexhaustible resources from to single-handedly combat movie piracy, computer hackers, terrorism and deceptive affiliate marketing practices on a global scale.
It’s like a hollywood movie … a 5-man team is sent to save the world against all odds. Lt. Kozlowski and Sgt. Johnson are taken out fighting the bad guys. Frankie is fatally wounded and dies heroically helping the team make it to the room with the red button that must be pressed to cause the villainous lair to self-destruct. With an unexpected twist of cool irony, grit, a patriotic determination to get the job done and quick reflexes, the blue eyed-hero and the foxy girl then end all evil and save the planet just as everything seems to be completely lost, and barely escape the massive explosions with a running dive for cover. They then emerge from the toxic smoke, bruised, their faces sooty, their uniforms torn and bloodied, and walk away from the apocalyptic scene smiling and triumphant. Movie fades to black, end credits roll.
Hurrah, good has once again triumphed over evil and the online world is safe at last. All websites now comply with the new FTC rules and guidelines.
I’m glad they come up with a new law to stop all the crooks who lie and cheat. I’m sure it will be as successful as the anti-spam laws because now I never receive spam in my email.
Dave I couldn’t but reply to this email. So now you don’t receive any spam emails. I’ll bet that is because you now are not receiving any emails.
I still get emails telling me how many dollars I have coming to me or a box of money they want to ship to me. All I have to do is pay some small fee
and give them my information. There was even a message telling me there was an idiote at the airport waiting for me.
How about the FBI and the IRS messages where they are willing to help me get this so called money?
I still get this crap.
I even got a check in the mail for several thousand dollars and all I had to due was cash it and buy a few things with the money and wire the rest of the money back to them as a test of my honesty. I took the check to the bank and they told me it was a fake as I beleived it would be.
Hello Jason, have you heard cloaked affiliate links on a website are also no longer legal as it masks the nature of a link?
It hides the fact it is an afiliate sales link.
Jim Edwards did a great interview with an FTC official about this subject. The rules are the same ones that have been in place. They are only clarifying some of them. True, only law abiding folks will follow them anyway, and money talks in american courts if they DO get nailed. But lets face it…most internet marketers are scuzzy people. I can count on my fingers the ones I’ve run across who are not.
Now we have a major traffic maven whom I’m sure you would recognize working to push a guy’s product that suggests folks steal author content from directories by removing the author bio box (which his automated software does), and running it through a translator to mangle the words and make “new content”. I mean for god’s sake, this guy is even stealing what he gets for free! The rest of his training consists of how to get over on Google. And we wonder why the regulators try to crack down on the mess. Sad indeed.
I see a slant towards blaming the “stupid” victims in this blog’s postings. That’s never a good idea. How many of you when faced with learning something new wouldn’t be taken in too? The crooks play on hope. I’m all for breaking up the marketer cluster-f however they feel they need to.
If we are all honest about our product and the products that we promote we do not have anything to worry about and yes the web needs to be cleaned up a little bit from all the junk that is out there.
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[...] Keep reading the rest about New FTC Regulations… [...]
[...] Keep reading the rest about New FTC Regulations… [...]