Why the new FTC Guides are good for you (we promise).

In about a month, the FTC’s new Guides for using endorsements and testimonials in advertising will go into effect (read the press release or the full text in PDF). It can be easy to get sidetracked by a narrow understanding of endorsements, but these guidelines have implications for all kinds of marketers.

So, what’s the big deal? How will this affect customer engagement marketers?

(Keep in mind: we’re not lawyers, and we’re not giving you legal advice.)

• The new Guides throw out the old loophole that let advertisers get away with putting a cursory disclaimer next to an exaggerated claim (i.e. “Results not typical”). They stress that one way to avoid implying typicality is by providing the details of the situation—we think the best way to do that is a thorough, detailed case study!
• The revisions explicitly address new and social media, stressing that “consumers’ willingness to trust social media depends on the ability of those media to retain their credibility as reliable sources of information” (see page 11). Arguing for transparency and honesty, they make clear that both advertisers and endorsers can be liable for obfuscation or dishonesty.
• The Guides expand potential liability to the endorser, which makes sense in the context of blogs and customer communities. The key to avoiding the pitfalls of consumer-generated endorsement-confusion? Clear policies and processes.

So, are the new guidelines good or bad?

Of course, there are some tricky things about the Guides. You’ll want to make sure you have someone monitoring or managing your social media presence, blogs about your products, and customer communities. You’ll need to double-check that you have solid processes in place for reviewing and approving consumer-generated content. You’ll have to make sure that final editorial pass has legal and ethical issues in mind.

But ultimately, we think the revisions are pretty great. Social media, testimonials, and customer stories are only as powerful as the trust between companies and their clients. The FTC’s choice to weigh in (relatively) early, rather than in a few years, is only a good thing for those of us who know the real value of customers’ trust.