Yesterday, the Federal Trade Commission released its revised Guides Concerning the Use of Endorsements and Testimonials in Advertising. The Guides are more than 80 pages long, so we’re still analyzing the changes. However, there is no question that our extensive advocacy efforts have had an effect on the final iteration of the Guides. The commentary included with the changes explains that advertisements using consumer testimonials should be evaluated by the net impression of the advertisement. A footnote in the revised Guides also suggests that in some cases a disclaimer could be sufficient. A more comprehensive legal document will be circulated shortly, but it is clear from a preliminary review that our efforts have not been made in vain. The 35 advocacy meetings on the Hill, 40 constituent meetings at the Fly-In, the testimony before the Senate, two sets of detailed comments and our suggested language were all helpful in presenting our case to the FTC.
However, the new Guides certainly do present some challenges, both to traditional TV marketers and those in social media. ERA is already planning educational opportunities that will provide suggestions for compliance with these changes. We hope the FTC will seize the opportunity to improve the marketplace by presenting to these changes to ERA members at one of our conferences.
Members who attended the Fly-In, supported the Leadership Reception, participated in the Government Affairs Committee, helped to author and review our comments to the FTC, and of course, testified before the Senate, were all instrumental in mitigating some of the more harmful changes. We thank you.
It has been an exciting week in the world of net neutrality. This week, Julius Genachowski, the Chairman of the FCC, announced the Commission’s intention to enter into a formal rulemaking process to codify the four principles of net neutrality currently in use and to add two more principles. The additional principles include a statement that consumers must be able to access the lawful content of their choice, subject to reasonable network management. Essentially, ISPs cannot block traffic to say, NBC Video, just because they have a partnership with Hulu. However, they still may prioritize all video content over all file sharing in order to manage the use of the network. In addition, networks must be transparent about what they are doing to manage traffic. This would give small business and direct response marketers more information about how consumers are experiencing online offerings like video advertising. Specifically, if you are providing an application for wireless devices or making videos available on sites like YouTube, you will know if some of the network providers are slowing certain services during peak hours. You will then be able to adjust your content delivery accordingly.
Late last week Representatives Markey (D-MA) and Eshoo (D-CA) introduced a bill that would keep the Internet open by preventing Internet service providers (ISPs) from imposing “a charge on any Internet content, service, or application provider to enable any lawful Internet content, application, or service to be offered, provided, or used. In other words, they cannot charge you (as a content provider) more than the cost of service for your lawful content and any lawful applications you make available.
The bill also prevents ISPs from providing or selling any content, application, or service provider any offering that prioritizes traffic over that of other such providers. This addresses concerns that ISPs will sell premium access to some companies, which would have the end result of degrading everyone’s content. This is important to any company that is using video online, but is not interested in paying more than they currently do to ensure the quality of the video is not reduced. It’s not easy to be moved by advertising when the video is pixilated or freezes every three seconds.
Similar bills were introduced in the last two Congresses. However, the larger Democratic majority and President Obama’s stated priority of keeping the Internet open may mean there will be some movement on this bill. However, the House will be in a District Work Period (aka recess) until after Labor Day.
In the meantime, you can watch this video.
For more information on ERA’s government affairs efforts, click here.
If you are thinking about buying something online, one of your first steps in evaluating the product might be to see what kind of reviews the product has received. But what if the reviewer was paid to give a favorable review? This is a practice that clearly has some troubling implications. That’s why the FTC recently addressed this practice in the Guides Concerning the Use of Endorsements and Testimonials in Advertising (yes, this is the same proposal that would require evidence of typicality for some testimonials).
But, consider this: You want your product to appear on reviews because you believe it will help increase the visibility of the product or brand. You send a free sample to a well-known blogger and you explicitly tell them they should be neutral in their review and should disclose that they received the product for free. Under the FTC’s proposed changes you may have liability. If on the same day you also send your product to a product reviewer for a publication without any agreement requiring disclosure, and they do not disclose that they received the product for free, you do not have liability!
Product reviews online come in many forms. In some contexts consumers will expect that the product was given to the reviewer as a free sample. If a college student reviews a new game console every week, would anyone really think that he or she is spending thousands of dollars a month to share friendly advice? This is a complicated issue deserving careful analysis; the FTC must consider the nuances of product reviews before adding new regulations for bloggers.
Get involved! You can learn more and do something about these proposed changes here.
For more information on ERA’s government affairs efforts, click here.
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.
ERA hosted the 2009 Government Affairs Fly-In in Washington, D.C. on April 20 and 21. Over 50 ERA members came together in our nation’s capital to network and meet with members of Congress to highlight their concerns over the revised Federal Trade Commission (FTC) Guides on Endorsements and Testimonials. Attendees participated in over 40 meetings with members of Congress and their staff, enjoyed a dynamic keynote speech by Senator Mark Pryor (D-AR), and networked with the movers and shakers of the D2C industry at two cocktail receptions.
For more video testimonials, click here. To learn more about ERA’s government affairs efforts, click here.
On the evening of April 20 and all day on the 21st, ERA will be hosting the Government Affairs Fly-In. In addition to two fantastic networking receptions, a keynote address by Senator Pryor, and detailed issue briefings, you will have the opportunity to really let lawmakers know about how this issue affects your business.
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.
The FTC recently released revisions to its self-regulatory principles for online behavioral advertising. But, how might these changes affect your business? In these particular principles, the FTC is focused on “third-party†advertising, rather than contextual or “first-party†advertising. Basically, a website using behavioral advertising only for one website and not aggregating data across multiple sites will not be directly subject to these principles, although they are still subject to other applicable privacy laws. Similarly, advertising based on a specific web query or click will not be subject to the principles unless that data is stored and applied to future actions.
The FTC’s principles focus on increasing transparency and consumer control, reasonable security and limited data retention, affirmative express consent for material retroactive changes to privacy promises, and affirmative express consent or prohibition of the use of sensitive data.
• Increasing Transparency: The principles require a disclosure to consumers that data is being collected and give a meaningful opt-out opportunity. The FTC voiced the desire for strong self-regulation even where data is not personally identifiable if that data “could reasonably be associated†with a particular consumer or device. The FTC also encourages disclosure in places other than the privacy policy. This might include a disclosure on or near an advertisement. They also encourage the use of empirical data to test whether the consumer understands the disclosure.
• Data Security and Retention: The protections should be based on the sensitivity of the data and the nature of a company’s business operations, the types of risks a company faces, and the reasonable protections available to a company. The FTC added that companies should retain data only as long as necessary to fulfill a legitimate business or law enforcement need.
• Material Retroactive Changes: Consent must only be obtained if the change is both material and retroactive. This makes data collected under the old privacy policy subject the old standards and new data subject to new standards, unless affirmative consent is obtained.
• Sensitive Data: The FTC continues to promote “opt-in†standards that require affirmative consent from consumers.
Ultimately this is an attempt to encourage and direct industry self-regulation, but it does not have an independent enforcement mechanism.
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.
Yesterday, the Federal Trade Commission released its revised Guides Concerning the Use of Endorsements and Testimonials in Advertising. The Guides are more than 80 pages long, so we’re still analyzing the changes. However, there is no question that our extensive advocacy efforts have had an effect on the final iteration of the Guides. The commentary included with the changes explains that advertisements using consumer testimonials should be evaluated by the net impression of the advertisement. A footnote in the revised Guides also suggests that in some cases a disclaimer could be sufficient. A more comprehensive legal document will be circulated shortly, but it is clear from a preliminary review that our efforts have not been made in vain. The 35 advocacy meetings on the Hill, 40 constituent meetings at the Fly-In, the testimony before the Senate, two sets of detailed comments and our suggested language were all helpful in presenting our case to the FTC.
It has been an exciting week in the world of net neutrality. This week, Julius Genachowski, the Chairman of the FCC, announced the Commission’s intention to enter into a formal rulemaking process to 
Late last week Representatives Markey (D-MA) and Eshoo (D-CA) introduced a bill that would keep the Internet open by preventing 
If you are thinking about buying something online, one of your first steps in evaluating the product might be to see what kind of reviews the product has received. But what if the reviewer was paid to give a favorable review? This is a practice that clearly has some troubling implications. That’s why the FTC recently addressed this practice in the Guides Concerning the Use of Endorsements and Testimonials in Advertising (yes, this is the same proposal that would require evidence of typicality for some testimonials).
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 - 
After the Obamamercial, in which 
On the evening of April 20 and all day on the 21st, ERA will be hosting the Government Affairs Fly-In. In addition to two fantastic networking receptions, a keynote address by Senator Pryor, and detailed issue briefings, you will have the opportunity to really let lawmakers know about how this issue affects your business.
The 
The FTC recently released revisions to its self-regulatory principles for online behavioral advertising. But, how might these changes affect your business? In these particular principles, the FTC is focused on “third-party†advertising, rather than contextual or “first-party†advertising. Basically, a website using behavioral advertising only for one website and not aggregating data across multiple sites will not be directly subject to these principles, although they are still subject to other applicable privacy laws. Similarly, advertising based on a specific web query or click will not be subject to the principles unless that data is stored and applied to future actions. 
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 
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