FTC Issues Rules on Disclosure Requirements for Testimonials, Bloggers and Social Media
The Federal Trade Commission published new regulations on October 5th which requires bloggers, tweeters and “word of mouth marketers”, who promote or endorse the services of a company, to divulge their compensation agreements, even if they receive in-kind services. The new rules are effective December 1, 2009. To view the FTC News Release click HERE.
The FTC news release states: “The revised Guides also adds new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers.”
Endorsements will no longer be allowed to promote atypical results and simply write in small print that the results are not typical. Celebrity endorsement will also have to disclose their relationship: “The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.”
The rule further states that advertisers are potentially liable if they initiate the process or promotions in which the blogger uses misleading or false advertising.
Fines of up to $11,000 per instance could be levied against the bloggers and advertisers.
Examples are provided in the rule beginning on page 65.
One is provided below:
Example 7: An advertisement for a recently released motion picture shows three individuals coming out of a theater, each of whom gives a positive statement about themovie. These individuals are actual consumers expressing their personal views about the movie. The advertiser does not need to have substantiation that their views are representative of the opinions that most consumers will have about the movie. Because the consumers’ statements would be understood to be the subjective opinions of onlythree people, this advertisement is not likely to convey a typicality message.If the motion picture studio had approached these individuals outside the theater and offered them free tickets if they would talk about the movie on camera afterwards, that arrangement should be clearly and conspicuously disclosed. [See § 255.5.]
For a copy of the complete rule send an email to firstname.lastname@example.org
Clarification on the Provision Requiring Needs Assessment for Commercial Outfitter Services in Wilderness
In the recent article on the Red Rock Wilderness legislation, which seeks to establish 200 new wilderness areas in Utah, we wrote that the “needs assessment” requirement for commercial services was based on the prohibition on commercial service except as necessary for administration of The Wilderness Act. Although that provision is in the Act the “needs assessment” requirement for outfitting is based on the provision that states:
“(6) Commercial services may be performed within the wilderness areas designated by this Act to the extent necessary for activities which are proper for realizing the recreational or other wilderness purposes of the areas.
U.S. Travel Association Report Predicts Longer Road to Recovery - Recreation Stronger than Other Segments
Recreation visits to National Parks are up 5% year-to-date and visitation to National Parks is expected to break a record in 2009. Camping in National Forests is also up. “Back to nature” seems to be a favored travel opportunity in a weak economy. But those are among the few positive gains for the travel industry this year based on a report from the U.S. Travel Association. While you may not feel that recreation was a bright spot, compared to other segments of the travel industry, it actually did better than most segments. Our own data shows that shorter trips with a strong value proposition did better than other outfitting segments and in some areas were up over last year.
The International Air Tranport Association predicts that airlines will lose $11 billion in 2009. Airlines continue to contract their capacity now down 13% compared to the levels in the fourth quarter of 2000. Advanced domestic airline tickets sales for November 2009 are 15% below November 2008 sales, according to the Airline Reporting Corporation.
In lodging, revenues per available room (REVPAR) are down in every region of the country with the downturn the most dramatic in the Rocky Mountain states where the year to date change is 24%. REVPAR in the Upper Midwest is down 11% and down 15% in the Southeast and the Lower Midwest. While business travel is weak, 84% of business executives said face-to-face business meetings and conferences are by far the best way to generate new business. Some improvement is expected in 2010 but most researchers in the travel industry expect the recovery to take hold in 2011 and 2012.
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