How to Be Transparent: Complying with the FTC Disclosure Regs

The new Federal Trade Commission (FTC) Guides Concerning the Use of Endorsements and Testimonials in Advertising took a lot of my fellow garden bloggers by surprise. Because I’ve been following the career of my friend Jenn Fowler as she’s gone from frugal blogger to Walmart Mom to social media consultant, I know that many bloggers in other niches started discussing these issues much earlier, fueled by the FTC’s announcement that they were considering revising the guides with online media in mind.

Let’s Keep Things in Perspective

According to Susan Getgood and Whitney Hoffman, the FTC first announced its intention to revise the guidelines in 2007, and issued a request for comments in 2008. Earlier this year, before the final guidelines were issued, Ms. Getgood pointed out that

The bulk of the 86 page [request for comments] document focuses on deceptive use of testimonials in advertising, largely for weight loss, baldness and other pharmaceutical (and quasi pharmaceutical) products. Disclosure of the relationship among the parties and substantiation of claims are the main themes.

GeekMommy vividly illustrates some of the online deception the FTC wanted to shut down. It couldn’t do so without revising its guidelines, and the guidelines, of course, have to apply to everyone. So, yes, you do have to follow these guidelines, but they weren’t designed to hassle legitimate bloggers. You probably don’t have to do much, if anything, differently than before.

Is New Media Treated Differently Than Old Media?

My biggest peeve with these new guidelines is that the FTC seems to think that old media–particularly newspapers and magazines–do not permit their reviewers to keep the products they are reviewing, and therefore don’t have to disclose that such products were received for free. That hasn’t been the experience of Buffalo Spree editor Elizabeth Licata. Neither has it been the experience of many GalleyCat readers. (Note: the Associated Press has since retracted the $11k fine statement.) I’ve been paid to review books maybe half a dozen times, and in each case I was permitted to keep the book(s), whether they came directly from the publisher, or were sent from the magazine paying for the review. Perhaps first-tier newspapers are different; I have no experience with them.

In her comment on The New FTC Guidelines on Endorsements by Bloggers dated Oct 11, 2009 at 10:45 am, Ms. Hoffman expresses the opinion that the old media will also have to follow these guidelines. In subsequent comments dated Oct 13, 2009 at 7:55 am and Oct 13, 2009 at 10:06 am (sorry, no way to link to them directly), she seems to be persuaded that old media is already holding itself to a higher standard. I’m not convinced, and it will be interesting to see how these guidelines are enforced.

What Happens If You Fail to Disclose?

Ah, yes, enforcement. As the FTC itself says,

The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.

So they are not law. The FTC doesn’t even call them regulations; it calls them guides. FTC Commissioner Cleland stated in a Q&A published by Fast Company:

That $11,000 fine is not true. Worst-case scenario, someone receives a warning, refuses to comply, followed by a serious product defect; we would institute a proceeding with a cease-and-desist order and mandate compliance with the law. To the extent that I have seen and heard, people are not objecting to the disclosure requirements but to the fear of penalty if they inadvertently make a mistake. That’s the thing I don’t think people need to be concerned about. There’s no monetary penalty, in terms of the first violation, even in the worst case. Our approach is going to be educational, particularly with bloggers. We’re focusing on the advertisers: What kind of education are you providing them, are you monitoring the bloggers and whether what they’re saying is true?”

If you are making a good faith effort to be transparent, you shouldn’t feel paranoid.

How to Be Transparent: Best Practices

First of all, you should have a disclosure policy on your blog outlining your general principles. If you don’t already have one, you can use this free disclosure policy generator to help you make one. But according to FTC guidelines, that is not enough. Each time you receive compensation for an endorsement, it must be disclosed. If you have any doubt about whether you need to disclose your relationship with an outside entity, walk through Whitney Hoffman’s Flow Chart of Disclosure.

Twitter, Facebook and Amazon Affiliate Links Are Included

According to a CNET article by Caroline McCarthy, Twitter and Facebook are not exempt from these guidelines. In regard to Twitter: “‘There are ways to abbreviate a disclosure that fit within 140 characters,’ Cleland said. ‘You may have to say a little bit of something else, but if you can’t make the disclosure, you can’t make the ad.'” Ms. Hoffman suggest using the hashtag #PE for paid endorsement. Others have suggested that you link to a blog post that makes the relationship clear. The CNET article points out that Facebook already has some policies in place to prevent profile abuse, so it’s not clear to me whether anything more than the Twitter suggestions would be needed for free products. In Mr. Champion’s interview, Cleland considers an Amazon affiliate link to be compensation, and presumably this would also be true for other affiliate links.

Examples from Real Life

  • My friend Jenn published a post outlining her endorsement policies, in addition to her disclosure page. Since she tags and categorizes her reviews and sponsored posts, they are pretty hard to miss, even though she states the relationship in the body of her post as well.
  • Heather of Freebies4Mom spells out her exact relationship with the brands she promotes at the bottom of every post. It could not be clearer in the example I linked to: “The Home Depot sponsored this post and provided the $500 gift card to give away. They also provided me with a $250 gift card to use so that I may write product reviews to post on Freebies 4 Mom. My product reviews are an expression of my own honest opinion based on my experience trying the product, and are not reviewed or edited by The Home Depot. The Home Depot does not compensate me in any other way for these product reviews.”

As for myself, I haven’t had any occasion to review products on this site. On my gardening site, I have tried to refer to free products as review copies or trial plants to make clear they were given to me, and I might make that more explicit in the future. For both sites, I have not made Amazon Associates links explicit, figuring that they are obvious as soon as you hover your cursor over them. I’ll now take pains to label them as such.

How About You?

Will this materially change the way you blog, tweet, or post on Facebook? Do you have other questions or concerns not addressed here? Please state them in the comments.

This just in: FTC Reassures Kidlit Bloggers at DC Meeting “If you are working with a marketing program you must disclose that connection. If you are an independent reviewer you do not.”

Comments on this entry are closed.

  • Great article! I love all the examples and am honored to be included as one.

    I’ll be jumping over to check out that final link to the Kidlit Bloggers in DC. . .

  • Kathy, this is good info! I’m impressed by the research you did and it is especially good to know who the intended target is, those who make false claims in regards to baldness, weightloss, and everything else we all hope for a miracle cure for