FTC Proposes Updates to Endorsement Guidelines

Dec 03, 2008

Whether you are fond or sick of advertisements that that feature flashy testimonials with fine print that reads “results may vary,” the Federal Trade Commission wants to hear what you think. Last week, the FTC opened to public comment proposed changes to its Endorsement Guides Review, which includes new guidelines regarding testimonials and the use of spokespeople (celebrity or otherwise).

“These are guidance for advertisers as to how to make advertising claims using testimonials without violating section 5 of the FTC Act,” said Mary Engle, associate director for advertising practices at FTC. The guidance originally issued in 1980, is being updated with new examples that bring it into the 21st century.

The commission is concerned about the use of misleading endorsements, particularly in the area of weight-loss advertising with extravagant before and after examples that don’t accurately represent what consumers can reasonably expect to achieve with the product. Under previous guidelines, advertisers could deal with the situation with a simple disclaimer, such as “results not typical.” Under the new guidelines, they will be required to disclose what “typical” is.

“Casual Conversation” for Pay
Another area of the guide explains the need to disclose material connections between an advertiser and an endorser. This includes people who are encouraging the use of a product on their blog or celebrities who appear on a talk show hawking a product, but are actually being paid to endorse it. Under the proposed guidelines, everything must be disclosed.

“We are more concerned with the non-conventional ads, where it seems like a product might come up in casual conversation with a talk show host and it might not be obvious to the audience that the celebrity is under contract with the advertiser,” Engle said.

Pharma companies should pay heed to the section about expert endorsements. If a spokesperson is held out as an expert on a product or a related field, he or she must actually have expertise in that field, and is expected to back up any claims made about the product. Under the new guidelines, Pfizer’s controversial Dr. Jarvik ads probably wouldn’t make the cut.

While FTC generally defers to FDA about advertising guidelines for pharma ads, the two organizations tend to play nice, and FDA could enact similar guidelines.

“FDA has primary jurisdiction over prescription drug advertising and OTC labeling, so we would expect each agency to take its usual role. But we do coordinate with each other if we are opening an investigation in an area where the other agency has jurisdiction,” Engle said. “We have a liaison agreement that we operate under to make sure we aren’t duplicating efforts.”

Public comments are open until the end of January.