Tomorrow, the Consumer Protection Subcommittee of the Senate Commerce Committee will hold a hearing entitled “Advertising Trends and Consumer Protection.†The hearing will consider several issues in advertising, including the use of the word “free†and Endorsements and Testimonials. This is part of a broader reevaluation of the FTC’s powers and funding. An explanation of tomorrow’s hearing is really not complete without an explanation of last week’s hearing. Last week, from the first opening statement to adjournment, the hearing focused on testimony from consumer groups and emphasized that consumers are targeted by scams and needed additional protection from the FTC (P.S.- You can watch this hearing and kind of see me in the background on C-SPAN here). On a panel of four, a lone dissenter, Tim Muris, former FTC chairman, claimed that the FTC did not need a major expansion in order to effectively protect consumers.
In contrast, this week we have two ERA members testifying and one representative from the National Advertising Review Council (NARC), which administers the ERSP program (ERA’s independent self-regulatory program). We look forward to hearing some dynamic testimony from Guthy-Renker’s Greg Renker and Product Partners’ Jon Congdon. We worked hard to make sure our industry was represented and that this hearing would be more balanced than the last. We’re certain that Renker and Congdon will provide effective counterpoint claims that the FTC needs more authority on the testimonials issue. They can show that our industry is enthusiastic about creating an environment that protects consumers. They are our customers for Pete’s sake! They will also show how effective principled self-regulation is in promoting honest business practices.
For more information or to watch tomorrow’s hearing live or immediately upon completion, click here. (The video may not post until the conclusion of the hearing)
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As you probably know, the FTC is planning to eliminate the safe harbor for testimonials with disclaimers. If you are concerned about these changes, make sure you sign up to receive updates from us on this issue. We will send occasional updates that will keep you up to speed. This is part of the grassroots effort we will be launching shortly and these updates will make sure you know about opportunities to get involved. Please make sure you don’t miss out - fill out the form here.
As this year’s ERA Government Affairs Fly-In comes to a close, the FTC’s view on testimonials and endorsements has been the hot topic. The following column addressing this issue first appeared in Electronic Retailer in March of 2007.
Disclaimer: Some readers of the following column may be amused and entertained; others may be put off by a perceived self-indulgent rant. Results may vary.
A few years ago, a client of mine who was sponsoring a car at the Indy 500 was gracious enough to invite me along. Just prior to the start of the race, a parade of stars was introduced. Who do you suppose elicited the greatest ovation from the crowd? Was it pop star and Proactiv endorser Jessica Simpson? Late night star cum racing team leader David Letterman? Jim “Gomer Pyle†Nabors singing “Back Home in Indiana†just prior to “Lady (thank you, Danica Patrick) and gentlemen, start your engines?†No, it was Jared Fogle. Jared Fogle? Yes, Jared–the Subway Guy.
I mention all this because as the Federal Trade Commission (FTC) begins the process of reviewing its policy on testimonials in advertising, Jared and the billowing pants he used to wear when he was 235 pounds heavier are about to endure the kind of scrutiny serial dieters reserve for their waistline. The FTC is examining whether highlighting such extraordinary cases of success within advertising creates expectations in the mind of the consumer that are misleading or even deceptive, even though they may be accompanied by a disclaimer along the lines of “results not typical.†Given the prevalence in health, fitness and even financial direct marketing of such endorsements, this may threaten a core device advertisers have long employed to spur couch potatoes to take action.
The Jareds of the world are aspirational catalysts who inspire others to change their lives. Does anyone really think that by working out at 24 Hour Fitness, they can ride a bicycle like Lance Armstrong? No, but by endorsing this chain, Armstrong may lead the target audience to healthier living. Similarly, a tearful weight-loss infomercial testimonial that causes a viewer to pick up the phone could be viewed as a public service. Given the rate of obesity in America, shouldn’t these authentic testimonials be framed in a positive light?
In a world with scant heroes, perhaps we shouldn’t be surprised that commoner Jared received the greatest roar at Indy. Subway has tried many different campaigns in the near-decade since our bespectacled everyman first “ate fresh,†but keeps coming back to the icon that represents the ability of the average person to achieve extraordinary results. And what of the role of personal responsibility in making choices (something I would think our government would want to extol)? Having sat through countless focus groups, I can attest that consumers pay close attention to those mouse-typed disclaimers, and comprehend every word. The FTC should give them more credit. Perhaps a more appropriate disclaimer for such testimonials would be: “Individual desire or will may vary.†Fat chance.
Rick Petry is a freelance writer who specializes in direct marketing. He can be reached at rick.petry@me.com.
For more information about ERA’s government affairs efforts, click here.
Consumers lured by advertisements promising rock-hard abs, sparkling white teeth and bulging bank accounts soon may get a reality check.
Updated guidelines on ad endorsements and testimonials under final review by the Federal Trade Commission—and widely expected to be adopted—would end marketers’ ability to talk up the extreme benefits of products while carrying disclaimers like “results not typical” or “individual results may vary.”
Instead, companies would be allowed to tout extreme results only if they also spelled out typical outcomes.
“For a good part of the last decade, we have noticed a problem, particularly with consumer testimonials,” said Richard Cleland, assistant director of the FTC’s division of advertising practices. “The use of consumer testimonials had become almost a safe harbor for companies as long as they threw in some sort of disclaimer about results not being typical.”
The changes are sending shudders through companies that worry about their ability to motivate consumers to buy their products if they can’t sell the sizzle.
“There would never be another Jared,” said Julie Coons, president and chief executive of the marketing trade group Electronic Retailing Association, referring to Jared Fogle, who became Subway’s spokesman after losing 245 pounds eating the chain’s sandwiches and exercising. “We’re all going to have to regroup” if the proposals stand.
The Electronic Retailing Association (ERA) was mentioned in a recent AdvertisingAge article for its work with the FTC on the proposed changes to endorsements and testimonials.
According to AdvertisingAge, “Results not typical” or “Experience may vary” used to be enough to protect marketers using testimonial ads to move their wares. But maybe not for much longer.
The Federal Trade Commission wants to toughen the rules for endorsements and testimonials by requiring evidence that results are likely to be typical — a move that would put pressure on purveyors of diet pills and exercise equipment, among others.
The FTC is proposing the change as part of a rewrite of its now-29-year-old guide for endorsements. In part, it’s an attempt to bring the rules up to date in order to meet some of the challenges of the internet and buzz-marketing age.
The biggest change: Advertisers that feature endorsers touting dramatic results will either have to demonstrate that consumers are “likely” to have similar success or describe in the ad what the “generally expected performance” is.
The Direct Marketing Association warned that the change could make it difficult for new competitors to advertise at all, and the Electronic Retailing Association and the Council for Responsible Nutrition said the change could make even well-documented claims difficult to make.
Want to have your voice heard on Capitol Hill? Then we invite you to ERA’s Government Affairs Fly-In on April 20-21, where you’ll have the opportunity to meet with members of Congress and let them know your concerns and opinions on this issue and many others affecting the direct-to-consumer, multichannel marketing industry. Click here for more information.
Late last week, the Federal Trade Commission (FTC) granted a request for a 60-day extension filed by ERA and other prominent advertising associations. Our request focused on the significance of the changes for direct marketers and for “new media.†These changes could dramatically affect both industries, so it is essential any changes are made with caution. The period for comment will now last until March 2, 2009. The previous deadline was January 30th. The vote for the extension was unanimous. This extension is only the first step in our advocacy efforts. Moving forward we will lead a coalition of trade associations to seek a solution that is beneficial for our member companies and for consumers. If you would like to learn more about this issue, please click here. Do not hesitate to contact me if you have any further questions.
Tomi Turner is ERA’s legislative manager. She can be reached at (703) 908-1022 or via e-mail at tturner@retailing.org.
Tomorrow, the Consumer Protection Subcommittee of the Senate Commerce Committee will hold a hearing entitled “Advertising Trends and Consumer Protection.†The hearing will consider several issues in advertising, including the use of the word “free†and Endorsements and Testimonials. This is part of a broader reevaluation of the FTC’s powers and funding. An explanation of tomorrow’s hearing is really not complete without an explanation of last week’s hearing. Last week, from the first opening statement to adjournment, the hearing focused on testimony from consumer groups and emphasized that consumers are targeted by scams and needed additional protection from the FTC (P.S.- You can watch this hearing and kind of see me in the background on C-SPAN here). On a panel of four, a lone dissenter, Tim Muris, former FTC chairman, claimed that the FTC did not need a major expansion in order to effectively protect consumers.
As you probably know, the FTC is planning to eliminate the safe harbor for testimonials with disclaimers. If you are concerned about these changes, make sure you sign up to receive updates from us on this issue. We will send occasional updates that will keep you up to speed. This is part of the grassroots effort we will be launching shortly and these updates will make sure you know about opportunities to get involved. Please make sure you don’t miss out - 
Disclaimer: Some readers of the following column may be amused and entertained; others may be put off by a perceived self-indulgent rant. Results may vary.
The 
Late last week, the Federal Trade Commission (FTC) granted a request for a 60-day extension filed by ERA and other prominent advertising associations. Our request focused on the significance of the changes for direct marketers and for “new media.†These changes could dramatically affect both industries, so it is essential any changes are made with caution. The period for comment will now last until March 2, 2009. The previous deadline was January 30th. The vote for the extension was unanimous. This extension is only the first step in our advocacy efforts. Moving forward we will lead a coalition of trade associations to seek a solution that is beneficial for our member companies and for consumers. If you would like to learn more about this issue, please 
