FTC testimonial amendments unnecessary, says CRN
In a joint submission to the FTC with the Electronic Retailing Association (ERA), CRN said the way disclaimers were used in testimonials and endorsements in new media such as blogs and social networking sites such as twitter and facebook may need regulatory attention, but amending the existing law was not the way to do it.
“Rules which will guide new types of marketing in emerging media should themselves be the subject of specific discussion and interchange with the advertising industry rather than added at the last minute to guides that are primarily directed at other issues,” CRN and ERA said.
CRN’s submission noted that “clear and well-endorsed rules” had been in place since 1980. It said the FTC had “pointed to no clear, compelling reason to change the rules now”.
Concerns about illegibility of disclaimers and a rethinking of the nature of ‘typicality’ in disclaimers were not enough to warrant an amendment, the groups said.
New media, new rules?
The mooted amendments come amid growing concern about the nature of endorsements and testimonials, especially in regard to TV advertorials and online media that host the likes of consumer product reviews.
Richard Cleland, the assistant director of the FTC’s division of advertising practices, has stated: “For a good part of the last decade, we have noticed a problem, particularly with consumer testimonials. The use of consumer testimonials had become almost a safe harbor for companies as long as they threw in some sort of disclaimer about results not being typical.”
He said word-of-mouth advertising is not exempt from rules about truth in advertising.
Under the proposed amendments, the FTC would require “the advertiser should clearly and conspicuously disclose the generally expected performance in the depicted circumstances.”
Members of industry groups such as CRN will address Congress staffers and FTC representatives tomorrow to voice their concerns.
Andrew Gordon, chair of the Electronic Retailing Associations Television Council, will attend the meeting. He said the proposed changes would drastically increase costs for marketers, limit the ability to use aspirational messaging in advertisements, and impede the use of truthful consumer testimonials.
"This is the most important issue that marketers have faced in a very long time,” Gordon said. “And it doesn't just affect direct marketers-consumer package goods marketers will be severely impacted as well. We all must band together to ensure the proposed changes are modified."
Other groups opposed to the changes include the US Chamber of Commerce, the American Advertising Federation and the Direct Marketing Association.
CRN was party to another submission to the FTC involving these groups, the ERA and several other advertising groups.
