Beyond the Hashtag: FTC Revises Guidelines for Endorsement Use in Advertising

The FTC recently made changes to its guide concerning the use of endorsements and testimonials in advertising. Scott Hervey and Jessica Marlow discuss these changes and their expected impact on the influencer marketing industry in this episode of The Briefing.  Watch this episode on the Weintraub YouTube channel here.   Show Notes: Scott: It's a new year, and some changes are in place for those in the influencer marketing business, whether it's on the brand side or on the talent side. We'll be covering recent changes to the FTC's guide concerning the use of endorsements and testimonials in advertising on this installment of The Briefing by Weintraub Tobin. Happy New Year, and thank you for tuning in to today's installment of The Briefing. I'm Scott Hervey of Weintraub Tobin, and today, I'm joined by a first-time guest to The Briefing, my law partner, Jessica Marlow. Jessica, welcome to the briefing. Jessica: Thank you, Scott. Happy to be here. Scott: So, Jessica, can you give us a little background on the FTC's involvement in endorsements and testimonials and the endorsement guide? Jessica: Absolutely. So, the FTC has the authority to investigate and bring cases related to endorsements made on behalf of an advertiser under section five of the FTC Act, which generally prohibits deceptive advertising. The endorsement guide is intended to give insight into how the FTC perceives various marketing activities involving endorsements and how the FTC's acts prohibition against deceptive advertising might apply to those particular activities. The guides do not have the force of law, but they are considered to reflect safe practices, meaning that if your marketing activities are inconsistent with the guides, that could result in law enforcement actions alleging deceptive advertising, which could include fines or restitution. Scott: That's a great summary. So, I understand that the guides have been around since, believe it or not, 1979, with the biggest update occurring in 2009, which addressed bloggers. Remember those celebrity endorsers and UGC user-generated content. Since then, the guides have continued to be updated to address the evolution of social media advertising. So, what's new? Or what's new in this most recent update to the guide? Jessica: Well, the FTC has provided some new guidance on what is an endorsement and who is an endorser. The historical definition of endorsement is any advertising, marketing or promotional message for a product that consumers are likely to believe reflects the opinions beliefs finding experiences of a party other than the sponsoring advertiser. So, the FTC has now included tags and social media posts in the list of things that can be considered. Scott: Endorsement and the FTC's position on who is an endorser. Now that changes. A reflection of the proliferation of AI influencers. The FTC now defines an endorser as that which quote appears to be an individual, group or institution. The FTC did make it clear that this language does not just apply to virtual or fabricated influencers. It also applies to writers of fake reviews and nonexistent entities that purport to give endorsements. So, let's talk about something that I'm sure everybody loves talking about. That's liability. Jessica: Oh, yes, liability. So, let's dive into that a little bit further. Everyone likes talking about how they can be sued. So, the previous language about advertiser liability said that advertisers are subject to liability for misleading or unsubstantiated statements made through endorsements. When there is a connection between the advertiser and the endorser, the FTC has deleted the wording. When there is a connection between the advertiser and the generally, there's a connection between the advertiser and the endorser because it is, after all, a marketing or promotional message. However, the FTC has pointed out that a connection is not always needed for an advertiser to be lia...