New Rules for Endorsing Products Online

The FTC has recently made some changes to endorsing a product online that will affect many online marketing practices, including the disclosure of paid product reviews. The recently published Guides Concerning the Use of Endorsements and Testimonials in Advertising enforces that you must disclose any “material connections” with products you endorse through social media marketing. The fines for not complying with the guidelines could be as much as $11,000 per incident, so these new rules should be taken seriously.

Here is how this might work with some common Internet marketing practices:

Blogging: If you’re being paid for endorsing a product or company in your blog, you now must disclose to consumers that you are being compensated for your endorsement. This is also the case if the company is sending you a free product or service in exchange for a positive review.

Facebook Fan Pages: In connection to blogging, being a member of a Facebook fan page might also render you as a person who is endorsing a product if you blog about it and are compensated. Say you’ve written a testimonial for a product on your blog in exchange for a free product from the company. If you are also one of the Facebook fans you could be liable to the FTC. It’s kind of similar to being a paid spokesperson for a product, except on a smaller scale. You now have to disclose the relationship with the product or company on your blog.

Twitter: Tweets are not immune to the new guidelines either. Basically, you also have to make the disclosure in your Twitter posts if you are being compensated for endorsing a product. To do this, you can simply add a #ad at the end of your Tweet.

How to Disclose: Companies should let reviewers of products know how disclosures should be made and reviewers should clearly state that they are endorsing a product online. For help with writing your own disclosure, you can use a disclosure policy generator here and adjust the wording as necessary. [http://disclosurepolicy.org/]

For an announcement about the guidelines from the FTC, which went into affect in December 2009, go here.

For a copy of the new guidelines, the PDF document is here. []

For more information about the FTC guidelines, check out my article: FTC Changes Guidelines for Customer Testimonials.