TINA.org Suggests Updates to How the FTC Regulates Endorsement Advertising

On June 22, 2020, TINA.org responded to the FTC’s request for comment on the Guides Concerning the Use of Endorsements and Testimonials in Advertising (referred to here as the Endorsement Guides or Guides). First passed in 1980, and last amended in 2009, the Endorsement Guides provide guidance to businesses, and others, to ensure that advertisements that use endorsements or testimonials comply with the requirements of the FTC Act.

Although the FTC’s Endorsement Guides cover the use of endorsements and testimonials in advertising across all media and platforms, TINA.org’s comment focused specifically on digital advertising. The comment’s recommendations primarily fall into three categories: new marketing issues that the Guides ought to address, updates pertaining to online ads that incorporate endorsements and testimonials and updates pertaining to consumer reviews.

As to new marketing issues, the comment highlights four social media marketing trends that the Endorsement Guides should address. First, TINA.org explains some potential legal issues with the use of virtual influencers (also known as CGI or computer-generated imagery influencers), and recommends that the Guides require various disclosures when virtual influencers are used by brands in marketing campaigns. Next, the comment raises the problems of regulating short-lived posts, such as Instagram and Snapchat stories. TINA.org’s own experience investigating DJ Khaled’s sponsored Snapchat posts endorsing various alcohol brands demonstrated that policing such content can be difficult, and TINA.org encouraged the FTC to consider addressing these type of disappearing posts in its Guides. The comment then focuses the Commission’s attention on endorsements in marketing targeted at young children. Notwithstanding that children under the age of five are a well-established vulnerable consumer group for whom disclosures do not work to eradicate the deceptive nature of the advertisement, some marketers will specifically target children. TINA.org encountered this issue during its investigation of Ryan ToysReview, and the comment encourages the FTC to address it in the Guides. Finally, the comment encourages the FTC to ban the deceptive tactic of using fake accounts to bolster an influencer’s social media presence.

The comment next offers several revisions to strengthen the effectiveness of the Endorsement Guides as they relate to social media endorsements. In particular, the Guides should incorporate various other FTC guidance documents in order to avoid confusing piecemeal information, require that advertisers substantiate the adequacy of their disclosures, explicitly extend the Endorsement Guides to previously published social media posts, and provide greater clarity as to the meaning of “Generally Expected Performance in the Depicted Circumstances.”

The comment also provides recommendations as to how the Guides can better address consumer reviews. Specifically, the Guides should unambiguously explain the requirements relating to consumers reviews that have been incentivized, include a disclosure requirement for websites that include incentivized reviews in their composite ratings, and ban the practice of review gating.

Finally, TINA.org urges the FTC to rigorously enforce the Guides both against the promoted companies, as well as against highly sophisticated and popular influencers. Only through direct enforcement against influencers will the Commission increase specific deterrence and influencer-awareness of the Endorsement Guides.

No doubt the FTC has its work cut out for it. (One hundred and eighteen comments have been submitted regarding the Endorsement Guides.) But TINA.org hopes the agency will do the hard work, use research and increased knowledge of online and social media marketing, and take this opportunity to update the Guides to be as effective as possible.

For more details, you can read TINA.org’s comment to the FTC here.