FTC Releases PDF of Guidelines for New Adv. Ruling

[HeySal]

Here's the link to the FTC guidelines for your advertising for anyone who's not sure of what they will and will not accept. I'm sure there are a few of us who still need to read this one, I know I'm gonna:

http://ftc.gov/os/2009/10/091005endo...esfnnotice.pdf

[George Wright]

Thanks HaySal,

I've been looking for something like that.

The new rules don't seem to be bothering the big advertisers on TV. Especially the health supplements and insurance. They are going on business as usual.

George Wright

[HeySal]

George - as I pointed out in some other thread in some other place (wherever the heck it was), the fines are topping at $11,000 dollars. That's not something that would even target or concern big business. They're after the little guys.

[George Wright]

Or maybe very small business also.

I wonder if there will be a market for some type of E and O insurance for small business.

George Wright

Originally Posted by HeySal

George - as I pointed out in some other thread in some other place (wherever the heck it was), the fines are topping at $11,000 dollars. That's not something that would even target or concern big business. They're after the little guys.

[Steve Crooks]

That's a really good point but surely the big businesses out there have to be seen to be complying with the FTC just for the sake of public relations. It would get a bit embarrassing for some big pharmaceutical company to be openly flouting the FTC rules.

Originally Posted by HeySal

George - as I pointed out in some other thread in some other place (wherever the heck it was), the fines are topping at $11,000 dollars. That's not something that would even target or concern big business. They're after the little guys.

[HeySal]

I would think that it would be a good time for anyone doing ANYTHING to grab an LLC to protect them from personal liability in case there are some loopholes for subjective prosecution - which I would imagine there are, but I haven't read the PDF yet so really can't make any educated statements. Even just the direction this is moving without reading the specifics, though, I'm thinking strongly of grabbing an LLC. Might do insurance later but just wanna protect my private assets for now. (private assets, oh hell LOL - I just got real funny!)

[HeySal]

Originally Posted by Steve Crooks

That's a really good point but surely the big businesses out there have to be seen to be complying with the FTC just for the sake of public relations. It would get a bit embarrassing for some big pharmaceutical company to be openly flouting the FTC rules.

Seriously? If losing 2.3 bil in a lawsuit for promoting off label usage of a drug that led to deaths of 1/4 of the drugs users didn't embarrass Phitzer (sp?) or pushing vaccines to young children when it reads right on the labels "18 or older" isn't putting a feather in their craws, I don't think violation of FTC guidelines is gonna really do it.

[Bill Farnham]

How about these passages from that PDF...

§ 255.5 Disclosure of material connections.

When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.

Additional guidance, including guidance concerning endorsements made through other media, is provided by the examples below.

Example 8: An online message board designated for discussions of new music download technology is frequented by MP3 player enthusiasts. They exchange information about new products, utilities, and the functionality of numerous playback devices.

Unbeknownst to the message board community, an employee of a leading playback device manufacturer has been posting messages on the discussion board promoting the manufacturer’s product.

Knowledge of this poster’s employment likely would affect the weight or credibility of her endorsement. Therefore, the poster should clearly and conspicuously disclose her relationship to the manufacturer to members and readers of the message board.

**********

We might need some additional space in our sig files for these new disclosures

KJ

[LB]

Originally Posted by HeySal

I would think that it would be a good time for anyone doing ANYTHING to grab an LLC to protect them from personal liability in case there are some loopholes for subjective prosecution - which I would imagine there are, but I haven't read the PDF yet so really can't make any educated statements. Even just the direction this is moving without reading the specifics, though, I'm thinking strongly of grabbing an LLC. Might do insurance later but just wanna protect my private assets for now. (private assets, oh hell LOL - I just got real funny!)

The FTC always sues the company and the person behind it.

If you look at any of their filings/complaints you will see they go after XYZ LLC and Joe Smith simultaneously.

There's lots of good reasons to have a corporate structure...the FTC doesn't care about that though.

[Steve Crooks]

Okay, maybe pharmaceutical is a bad example but my point is, big businesses have to be seen to be doing the right thing and not openly flouting laws. Especially when it comes to the public face of the company, i.e. their advertizing.

Originally Posted by HeySal

Seriously? If losing 2/3 bil in a lawsuit for promoting off label usage of a drug that led to deaths of 1/4 of the drugs users didn't embarrass Phitzer (sp?) or pushing vaccines to young children when it reads right on the labels "18 or older" is putting a feather in their craws, I don't think violation of FTC guidelines is gonna really do it.

[Bill Farnham]

Originally Posted by Steve Crooks

Okay, maybe pharmaceutical is a bad example but my point is, big businesses have to be seen to be doing the right thing and not openly flouting laws. Especially when it comes to the public face of the company, i.e. their advertizing.

Steve, I don't think the new guidelines have taken affect yet, but a lot of the trade associations had input into the new GLs, and their members are probably scrambling right now to reshoot a lot of the media they broadcast to be in compliance when the new GLs do kick in.

KJ

[Steve Crooks]

That sentence "the connection is not reasonably expected by the audience" throws a lot of ambiguity at it. How the heck do you determine the expectation levels of other people in a forum and also who is going to judge that? What has happened to common sense here?

Originally Posted by Killer Joe

How about these passages from that PDF...

§ 255.5 Disclosure of material connections.

When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.

Additional guidance, including guidance concerning endorsements made through other media, is provided by the examples below.

Example 8: An online message board designated for discussions of new music download technology is frequented by MP3 player enthusiasts. They exchange information about new products, utilities, and the functionality of numerous playback devices.

Unbeknownst to the message board community, an employee of a leading playback device manufacturer has been posting messages on the discussion board promoting the manufacturer’s product.

Knowledge of this poster’s employment likely would affect the weight or credibility of her endorsement. Therefore, the poster should clearly and conspicuously disclose her relationship to the manufacturer to members and readers of the message board.

**********

We might need some additional space in our sig files for these new disclosures

KJ

[Josiah]

Originally Posted by Killer Joe

How about these passages from that PDF...

§ 255.5 Disclosure of material connections.

When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.

Additional guidance, including guidance concerning endorsements made through other media, is provided by the examples below.

Example 8: An online message board designated for discussions of new music download technology is frequented by MP3 player enthusiasts. They exchange information about new products, utilities, and the functionality of numerous playback devices.

Unbeknownst to the message board community, an employee of a leading playback device manufacturer has been posting messages on the discussion board promoting the manufacturer’s product.

Knowledge of this poster’s employment likely would affect the weight or credibility of her endorsement. Therefore, the poster should clearly and conspicuously disclose her relationship to the manufacturer to members and readers of the message board.

**********

We might need some additional space in our sig files for these new disclosures

KJ

Haha, you're right!

Maybe another 20 lines?

[HeySal]

Interesting LB. One of the main reasons people grab LLCs is to avoid damage to personal assets in a law suit. Guess it would be fitting to take a browse at what sort of precedences have been set in such suits to this date.

[Steve Crooks]

Yeah probably.. As someone who is from the UK but does a lot of business in the USA I am really confused also how these new guidlines affect me.

Originally Posted by Killer Joe

Steve, I don't think the new guidelines have taken affect yet, but a lot of the trade associations had input into the new GLs, and their members are probably scrambling right now to reshoot a lot of the media they broadcast to be in compliance when the new GLs do kick in.

KJ

[HeySal]

The ruling takes effect december first. I already shot my tech a note to strip my salespages of all testimonials - just in case. I have no clue how I would ever be able to judge a "typical" result - especially in light of the fact I have no way to monitor to what extent my outlines are followed to the letter. This whole thing is just bizarre.

I don't want "examples" - I want a nail down of WHAT can and can't be done - to the letter. Any bridging assumptions necessary will allow for financial prosecutions, bias prosecutions, malicious prosecutions initiated by competitors, etc rather than just prosecution of slimy marketing techniques.

[Steven Carl Kelly]

Much ado about nothing, really.

[Steven Carl Kelly]

Originally Posted by HeySal

I don't want "examples" - I want a nail down of WHAT can and can't be done - to the letter. Any bridging assumptions necessary will allow for financial prosecutions, bias prosecutions, malicious prosecutions initiated by competitors, etc rather than just prosecution of slimy marketing techniques.

I can't imagine where you'd get something like that.

[Don Schenk]

Originally Posted by Steven Carl Kelly

I can't imagine where you'd get something like that.

You haven't read the document yet. There are many examples given in that .pdf.

In television it will be easy and inconspictuous when the advertiser places the disclosure in a small font, and flashes it on the screen in a long paragraph, for 4 seconds.

The only people who will know what it says are people who can read 5,000 wpm!


:-Don

[Steven Carl Kelly]

Originally Posted by Don Schenk

You haven't read the document yet. There are many examples given in that .pdf.

I've read the document many times, and in fact started a thread about how people are blowing things way out of proportion and breaking down parts of the document itself.

And if you will note, HeySal said she DOESN'T want examples. She wants someone to tell her exactly what is and isn't allowed. No one can supply that. Only the courts will decide that over time.

[Charann Miller]

Originally Posted by HeySal

The ruling takes effect december first. I already shot my tech a note to strip my salespages of all testimonials - just in case. I have no clue how I would ever be able to judge a "typical" result - especially in light of the fact I have no way to monitor to what extent my outlines are followed to the letter. This whole thing is just bizarre.

I don't want "examples" - I want a nail down of WHAT can and can't be done - to the letter. Any bridging assumptions necessary will allow for financial prosecutions, bias prosecutions, malicious prosecutions initiated by competitors, etc rather than just prosecution of slimy marketing techniques.

You're right, it's impossible to gauge what an average or typical result is. It's so ambiguous.

Say for instance if you pre-launch a product, get 50 people to test it out and on average they each make $1,000 in a 30 day period then is that not an average result?

Anything outside of controlled testing and monitoring is like blowing sand to the wind, too many variables to consider, there's no way of garnering such figures, especially if most people don't act upon your information then there's no way of getting a true representation.

[Steven Carl Kelly]

Originally Posted by Charann Miller

Say for instance if you pre-launch a product, get 50 people to test it out and on average they each make $1,000 in a 30 day period then is that not an average result?

They avoid using the word "average" because marketers are not expected to create a mathematical average. Instead, it is a generally expected result and based on circumstances, so yes -- you could list those circumstances and say that is a generally expected results in those circumstances.

[HeySal]

Originally Posted by Steven Carl Kelly

I've read the document many times, and in fact started a thread about how people are blowing things way out of proportion and breaking down parts of the document itself.

And if you will note, HeySal said she DOESN'T want examples. She wants someone to tell her exactly what is and isn't allowed. No one can supply that. Only the courts will decide that over time.

You are supposed to decide guilt and innocence in a courtroom. The law itself is supposed to be black and white. How do you rule against people for not constructing the correct bridging assumptions about what might be stepping over the line? It allows arbitrary prosecution. If we are supposed to work within the laws, they need to be able to provide those laws. What should remain to be judged is if you stepped away from those laws, and the intent of doing so - not whether you understood exactly what MIGHT be considered illegal or allowed to fly.

What if speed limits were set at "around 55"? Would you like to be the guy pulled into court for doing 58 and told they felt it wasn't close enough?
Law is supposed to be black and white - it is judgment that should allow for prima facae argumentation.

[Steven Carl Kelly]

Originally Posted by HeySal

The law itself is supposed to be black and white. How do you rule against people for not constructing the correct bridging assumptions about what might be stepping over the line? It allows arbitrary prosecution. If we are supposed to work within the laws, they need to be able to provide those laws. What should remain to be judged is if you stepped away from those laws, and the intent of doing so - not whether you understood exactly what MIGHT be considered illegal or allowed to fly.

Sorry Sal, it just doesn't work that way.

[HeySal]

Originally Posted by Steven Carl Kelly

Sorry Sal, it just doesn't work that way.

It was meant to. It used to. I'm sorry, too.

[Steve Crooks]

So in other words, we just make it up and that will satisfy the FTC. It's just madness!

Originally Posted by Steven Carl Kelly

They avoid using the word "average" because marketers are not expected to create a mathematical average. Instead, it is a generally expected result and based on circumstances, so yes -- you could list those circumstances and say that is a generally expected results in those circumstances.