The use of bloggers to promote a product or event has become an
integral part of most marketing campaigns for action sports.
Blogging allows action sports companies to reach their target
demographic, often by relying on a celebrity endorsement. Laws and
guidelines governing advertising apply to bloggers' activities,
and sports marketers have to know how to comply so that the
reference to the latest product being used by Kelly Slater or Shaun
White doesn't lead to a lawsuit.
The Federal Trade Commission (FTC) recently revised its Guides
Concerning the Use of Endorsements and Testimonials, which provide
guidance to advertisers that ask others to endorse a product,
including bloggers. (The Guides are on the FTC website at http://www.ftc.gov/os/2009/10/091005revisedendorsementguides.pdf)
The Guides are "advisory" in nature – not
binding law – but the FTC uses them to evaluate whether
an endorsement or testimonial violates Section 5 of the FTC Act,
which prohibits unfair and deceptive or misleading practices.
The Guides define endorsements and testimonials broadly to mean any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings, or experience of a party other than the sponsoring advertiser. As the FTC said in recently posted Facts for Business, the Guides apply to bloggers receiving free products or other perks with the understanding that they'll promote the advertiser's products in their blogs, as well as bloggers who are part of network marketing programs where they sign up to receive free product samples in exchange for writing about them or working for network advertising agencies.
The Guides also apply to celebrity endorsers who write about
themselves, and the products they use, on their own blog, social
networking site, or using other social media such as Twitter. A
manufacturer's own website, where employees can blog about the
manufacturer's products, is covered by the Guides as
well.
According to the Guides, endorsements and testimonials must reflect
the honest opinions, findings, beliefs, or experience of the
endorser, and endorsements may not contain any representations that
would be deceptive, or could not be substantiated, if made directly
by the advertiser. In a famous lawsuit filed by the FTC against
baseball star Steve Garvey, the FTC charged Garvey with false
advertising relating to commercials that advertised the weight-loss
products Exercise in a Bottle and Fat Trapper. Fortunately for
Garvey, he had used the products and had lost weight, leading the
court to rule that his use of the product constituted an adequate
basis for his statements in the commercial about how much weight he
lost using the product. If he hadn't actually used the product,
or if he hadn't actually lost weight using the product, the FTC
probably would have prevailed in the lawsuit.
When there is a connection between the endorser and the seller of
the advertised product that might materially affect the weight or
credibility of the endorsement, the connection must be fully
disclosed. The FTC suggests that bloggers should mention this
connection each time they review a product, rather than posting a
one-time disclaimer saying that the blogger sometimes receives free
products in exchange for writing a review. The FTC recently
investigated a clothing retailer that invited bloggers to attend a
fashion show and gave bloggers gifts. Eventually, the FTC said it
would not charge the company with violating the FTC Act because the
company had a policy of telling bloggers that they must disclose
any gifts they receive.
A more difficult issue for advertisers is the Guides' position
on liability: if an advertiser requests that a blogger try a new
product and write a review, the advertiser may be subject to
liability for false or unsubstantiated statements made through the
blogger's endorsement. The FTC recently said that it usually
pursues the advertiser, not the blogger or endorser, when there is
a concern about false or unsubstantiated statements.
The FTC suggests that advertisers provide guidance and training for
its bloggers concerning the need to ensure that statements bloggers
make are truthful and substantiated. The FTC also suggests that
advertisers monitor bloggers who are being paid to promote their
products and take steps necessary to halt the continued publication
of deceptive representations when they are discovered. How much an
advertiser should monitor bloggers depends in part on whether
physical injury or financial loss might occur as a result of an
unsubstantiated claim. The FTC has specifically said that the scope
of the monitoring program depends on the risk that deceptive
practices by bloggers could cause consumer harm, such as physical
injury or financial loss. The higher the risk of harm, the more
active the advertiser should be in monitoring what its paid
bloggers are saying and the more aggressive it should be in
following up on questionable blog entries.
The Guides also apply to other social networking campaigns. In its
Facts for Business, the FTC provided the following example of an
athlete using Twitter to promote products: "A famous athlete
has thousands of followers on Twitter and is well-known as a
spokesperson for a particular product. Does he have to disclose
that he's being paid every time he tweets about the
product?" The FTC's answered by saying it depends on
whether his readers understand he's being paid to endorse that
product. "If they know he's a paid endorser, no disclosure
is needed. But if a significant number of his readers don't
know that, a disclosure would be needed. Determining whether
followers are aware of a relationship could be tricky in many
cases, so a disclosure is recommended."
The Guides also address word-of-mouth marketing: if an advertiser
provides free products or other incentives (such as points that can
be redeemed for prizes) to individuals every time they mention the
advertiser's products or services to their friends, these
incentives should be clearly and conspicuously disclosed, and the
advertiser should take steps to ensure that these disclosures are
being provided.
Conclusion
The rules and regulations that apply to bloggers are still
evolving. Sports marketers should understand how these rules and
regulations apply to bloggers so that the focus of promotional
campaigns stay on the action sports product or event and not legal
troubles.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.