3 Tips to Keep You In Line with New FTC Endorsement Rules

This just in: If you rely on endorsements in your marketing, you might be up for a few unexpected run-ins with the Federal Trade Commission (FTC).

New guidelines published on the FTC’s Q&A on Endorsement Guides clarify the right ways to use endorsements in social media, advertising, and marketing. Fortunately, with the updated guidelines, there should now be less confusion when navigating FTC rules. Unfortunately, specific new policies can easily turn into a coming crackdown if you aren’t careful with your marketing activities.

To keep you from toeing the line, let’s run through a quick checklist of 3 tips to ensure you’re handling your endorsements and contests correctly.

Tip #1: Display your contest rules clearly.

According to a recent report, contest forms are converting at a rate of 35%. With this ROI, marketers are turning to social media contests to engage customers.

A recent study named YouTube as the top social media site to introduce a new company—offering a staggering 14% conversion rate. With this kind of influence, YouTube is a great platform for hosting a contest…as long as the rules are displayed front and center.

According to the FTC’s updated endorsement guides, all contest disclosures must be “clear and conspicuous.” This means contest rules should be placed close to the contest claims and should stand out from the background. If you’re running a video contest, rules should display for a sufficient amount of time or be super noticeable (think font and color). And all rules should be written in plain and clear language.

In 2014, the FTC flagged a Pinterest contest from Cole Haan on accusation of not clearly communicating the contest to participants. Entrants had to take a picture of their favorite place, posted with the tag #WanderingSole, in hopes of winning $1000.

Essentially, the FTC viewed the posts as unlabeled endorsements for the brand since there was no clear indication that they were part of contest. If you plan on running a social media campaign, make sure that your hashtag includes “contest” or “sweepstakes” in the interest of full disclosure.

#2: Be transparent about endorsements with social media personalities.

As with contests, endorsements on social media must be clear. If you’ve snagged a celebrity endorsement deal, make sure that deal is fully disclosed.

On TV, consumers realize that actors and athletes are being paid for their rave reviews in commercials. But on social media, it’s a bit different. It’s the responsibility of us marketers to make it clear when tweets, Facebook posts, and Instagram photos that praise a brand are the result of paid endorsement.

For example, imagine you’re running a Twitter contest with the reward being a personal training session with Jillian Michaels. If you want Jillian to tweet about her excitement to be a part of the contest, her tweet should also note that her excitement is an advertisement. Even if abbreviations are used, the endorsement should be clear to avoid violating FTC policy.

#3: Earn real Facebook likes from real people.

Last, but certainly not least, we need to consider how these new rules affect a particularly shadowy area of marketing: purchased Facebook “likes.” Many new brands buy a specific number of Facebook likes to give the appearance of activity, prestige, and reach on social media.

Of course, purchased likes are inherently invaluable. They aren’t backed by genuine, interested customers and, as such, are frowned upon in most areas.

The FTC doesn’t stop at just disapproval. The new regulations list purchased Facebook likes as fraudulent and in violation of endorsement policies. Both ends of the transaction—buyers and sellers—could soon find themselves having an unpleasant conversation with the FTC. Additionally, Facebook itself has announced a plan to purge its site of the fraud. The social media site is in the process of removing all fake accounts, which make up nearly 10 percent of Facebook’s total users.

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About Chris Lucas
Chris is the vice president of marketing for Formstack. He is passionate about setting the vision for Formstack’s marketing and sales departments, as well as discovering new ways to drive web traffic and leads. Follow Chris on Twitter at @chris_c_lucas.

One Reply on 3 Tips to Keep You In Line with New FTC Endorsement Rules

There’s some great information here and I love the approach of being transparent and open rather than “getting away with it” type advice I’ve seen elsewhere.

Still wondering about lauding contests in a post about authenticity. Aren’t contests just buying likes? Certainly Facebook ads and content with a like button are buying likes too, according to FTC advisories.

And why is that infographic here? Is it about this subject, or included as an unpaid ad?

My point is… we really don’t know what the FTC wants. I prefer to think they want to go after the abusers, but history proves that government does not get to discern intent. I try to be authentic and open, I’m not sure that’s enough 🙂

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