What Ftc Guidelines Mean To Your Business?
The Federal Trade Commission has adopted Guides Concerning the Use of Endorsements and Testimonials in Advertising effective December 1, 2009
. This 81-page document is replete with footnotes, countless acronyms and many confusing phrases such as employing, therein and containing.The gist of the guidelines is that if an operator of a website or publisher of any kind accepts compensation in any form from the manufacturer or distributor of a product and then writes an endorsement or other kind of testimony about that product they subsequently must divulge that they received that compensation to their readers. This is even if the blog owner receives a free video game and correspondingly reviews it for his readers.
The significance of these new rules put forth by the Federal Trade Commission is that bloggers and websites that are affiliates of some other business must now make their readers aware that they have a financial interest in touting the products they are praising.
This probably won't affect readers in any way bottom line. Most people know when you visit a website and see a link to a Verizon signup page or an article that asks about The Starbucks Via Taste Test someone is getting paid somehow.
Many think that the Internet is self policing. If you have a website or blog that is too self-promoting and too commercial for readers they will stop coming too it and it will die from lack of traffic. So these new guidelines are probably unnecessary.
The FTC believes it is being an effective watchdog for consumers. The FTC states as their primary directive is that when the FTC was created in 1914, its purpose was to prevent unfair methods of competition in commerce as part of the battle to "bust the trusts."
Richard Cleland, of the FTC when asked about the new guidelines project stated: "We are not peeping in everyone's windows," and "some misconceptions have fueled worries of a witch hunt, especially involving the $11,000 fine that is only possible in unlikely hypothetical situations but is routinely cited as Big Brother's imposition."
He further stated: "The purpose was to take these established principles and see how they apply to these new forms of advertising. These guidelines really did not do anything more than apply an existing precedent to a situation that did not exist back in 1980."
There are plenty of bloggers that are up in arms about this new intrusion of Big Brother into their Internet world. Many bloggers and affiliates feel that it is unnecessary for this policing by the FTC. But likewise, a similar number believe that it is time for the FTC to step in and do something about claims such as if you buy a new heat pump you will save 50% on your electric bill or the promise of untold riches if you buy the latest Internet Marketing ebook. Usually, the way you get rich with that is if you get 100,000 other readers to buy it from you.
Also, sellers of a product or service cannot make unsubstantiated endorsements from fictitious or non-existent users of the product. Further they must have research to prove their statements about a product. In addition, marketers cannot state results of an item that are exceptional and then simply state a disclosure such as, "Results may not be typical" or, "These testimonials are based on the experiences of a few people and you may not likely have similar results". This would be insufficient to prevent that ad from being deceptive.
So will these new rules change the way Bloggers and Affiliates approach marketing and advertising on the Internet. It probably will. There will most likely be less unsubstantiated claims of success. At the least website owners will have to divulge they are being compensated to their visitors and readers.
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