Briefing Note

Endorsements and testimonials in advertising and social media

The impact on brands of Federal Trade Commission guidance changes
by Niall Cook | 13 October 2009

Introduction
On 1 December 2009 new guidelines (Guides) from the Federal Trade Commission (FTC)
concerning the use of endorsements and testimonials in advertising come into force in the
United States. This briefing note outlines the changes and their impact on brand owners and
their clients.
The most significant development in this revision is the inclusion of social or consumer-
generated media as a form of endorsement. It is perhaps appropriate that this has been the
focus of discussion and comment online. Whilst there is much in the full 81-page Guides that
brand owners should review, the following actions are the most pressing when considering any
campaign.

1. Decide whether marketing activities fall under the jurisdiction of the FTC
If your company is based in or running a marketing campaign to consumers in the United
States, the FTC Guides and Act will apply to you. Notable exceptions are banks, savings and loan
institutions, Federal credit unions and common carriers that are not governed by the FTC Act.

2. Understand what is and isn’t an endorsement

Under the FTC Guides an endorsement or testimonial is any advertising message “that
consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party
other than the sponsoring advertiser.”
In practice, this means that a film critic’s review of a movie excerpted in an advertisement
would constitute an endorsement but a TV commercial depicting an unknown woman
recommending a detergent to a friend would not. Likewise, a well-known racing driver speaking
of the smooth ride, strength and long life of tires – even if not their own personal opinion –
would be classed as endorsement, whereas an announcer unfamiliar to the public speaking on
behalf of the company in an advertisement would not.
The Guides include the following example to clarify the meaning of endorsement in the
context of consumer-generated media (emphasis added):
A consumer who regularly purchases a particular brand of dog food decides one day
to purchase a new, more expensive brand made by the same manufacturer. She writes
in her personal blog that the change in diet has made her dog’s fur noticeably softer
and shinier, and that in her opinion, the new food definitely is worth the extra money.
This posting would not be deemed an endorsement under the Guides.
Assume that rather than purchase the dog food with her own money, the consumer
gets it for free because the store routinely tracks her purchases and its computer has

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generated a coupon for a free trial bag of this new brand. Again, her posting would
not be deemed an endorsement under the Guides.
Assume now that the consumer joins a network marketing program under which she
periodically receives various products about which she can write reviews if she wants
to do so. If she receives a free bag of the new dog food through this program, her
positive review would be considered an endorsement under the Guides.

3. Have a good reason to believe that endorsers subscribe to the endorsement

The Guides state that endorsements must reflect the honest opinions, findings, beliefs, or
experience of the endorser. Further it places the responsibility on the advertiser to ensure this is
the case, stating that it may only use the endorsement whilst it has “good reason to believe” that
the endorser continues to subscribe to the views attributed to them. In the case of a product or
service endorsement, the endorser must have also been “a bona fide user” of it at the time of the
endorsement.
The penalties of not adhering to this ruling are severe. Advertisers will be subject to liability
for false or unsubstantiated endorsements or for failing to disclose connections with endorsers.
Endorsers themselves may also be liable for statements made in the course of their
endorsement.

4. Educate and monitor consumer endorsers

According to the Guides, where consumers take on the role of endorser by participating in
product and service review campaigns, both the advertiser and the consumer become liable for
their statements. For example, if a company asks bloggers to try a new product and write a
review on their blog, both the company and the consumer become liable for any misleading or
unsubstantiated statements made.
Companies engaging in such activity should therefore ensure that they, and any agencies or
services they use, provide training and guidance to bloggers concerning the need to make
truthful and substantiated statements. They should also ensure that they monitor these
statements and take steps to halt any deceptive representations.

5. Disclose material connections

The Guides state that when there is a connection between an endorser (individual, expert or
organization) that might materially affect the credibility of the endorsement, the connection
must be fully disclosed. Some complex example scenarios are provided in the Guides and worthy
of further examination.
Regarding consumer-generated media, the Guides are very specific. If the manufacturer of a
product sends a free copy of it to a blogger who subsequently writes a favourable review, then
the blogger must “clearly and conspicuously” disclose that it was received free of charge.
Companies should advise bloggers at the time the product is provided that the connection
should be disclosed and should have procedures in place to monitor compliance.

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 Briefing Note

Likewise, if an employee of a company selling products or services engages in discussion

related to their business on an online community, they too must “clearly and conspicuously”
disclose their relationship with the company to members of that community.

Summary
In light of these new guidelines from the FTC, companies should do the following:
• Review the full Guides available at
http://ftc.gov/os/2009/10/091005revisedendorsementguides.pdf
• Review existing and planned endorsements in light of the Guides
• Ensure that marketing staff and agencies are aware of the Guides and their implications
• Monitor the activities of consumers who participate in social media marketing campaigns
• Put in place specific social media guidelines for employees to advise them of their disclosure
obligations when participating in online discussion.

Note
The 16 C.F.R. Part 255: Guides Concerning the Use of Endorsements and Testimonials in
Advertising summarised in this briefing note are administrative interpretations of the law
intended to help advertisers comply with the Federal Trade Commission Act. They are not
themselves binding in law.

This work is licensed under the Creative Commons Attribution-Noncommercial-Share

Alike 3.0 United States License. To view a copy of this license, visit
http://creativecommons.org/licenses/by-nc-sa/3.0/us/ or send a letter to Creative
Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.