Monday, October 5, 2009

Newly released US Federal Trade Commission rule affecting bloggers and celebrities makes sense

Earlier today the US Federal Trade Commission (FTC) issued a Press Release announcing new rules concerning advertising endorsements and testimonials. This new “Guides Concerning the Use of Endorsements and Testimonials in Advertising” updates the current version, last updated in 1980. Thus, when these Guides were last modernized, Cable TV was in its infancy, and the modern PC had not been invented yet. Thus, this update is badly overdue. This provides an interesting look at the ease with which American media spins virtually every story.

I first crossed paths with this story at a news aggregating and summarizing site called that I am a definite fan of. In the spirit of full disclosure, I am a registered member of the Newser community. At the same time, I receive no compensation of any kind from them.

This news report can easily be spun to make it sound like the new rules only target those who provide “reviews” of any product on blogs, Facebook or Twitter. Those who fail to disclose their lack of independence could face a fine of $11,000. Starting from this conclusion it is easy for commentators to digress into rants about the big, bad US Government picking on the little guy.

However, an examination of the pending Federal Register announcement shows that these new rules are entirely fair, reasonable and place new accountability expectations on advertisers as well. As the real-world examples included in the new rules show, advertisers are the major focus of these new rules. One provision makes it clear that advertisers are equally responsible for ensuring compliance with the rules, and are liable for any false or misleading statements made by either consumer or celebrity endorsers. This last provision is, in my opinion, very badly needed.

There will be those who will whine about the “unfair repressiveness” of these new rules, and how they are undermining the independence of the Internet and other new media. Such a response is inaccurate. From my perspective, the ethical approach to any product commentary starts with a revelation of the extent of any relationship between the spokesperson and the business supplying the product or service. If no financial or other relationship between the blogger and business exists, I feel the spokesperson needs to make this clear as well.

Why do I feel this way? Through the years, I have observed that voluntary product comments are far more accurate and reliable than those that are paid for. In the latter cases, there is a definite pressure to say only positive things about the product (or service) under discussion. As an example, say a nationwide network of weight loss clinics pays a reasonably well known musician to promote their services. Naturally the musician’s public comments will closely follow the sample text provided by the clinics. Further, if the “before and after” photos of the musician don’t exactly match the images desired by the clinics, well, hey, there’s always Photoshop (or some other photo manipulation software.)

Voluntarily provided comments by those who actually use – and genuinely like -- the products they are endorsing tend to be much better. As an example, consider the currently running “Mac vs PC” ad campaign on US television. To me these ads lack a sense of being genuine, of being heavily slanted either in the direction of the Mac or the PC. A far more effective approach would be for an ad agency to seek out unsolicited testimonials by actual Mac and PC users, in which they compare experiences they have actually had. This latter approach would provide more useful “food for thought” insights for potential purchasers to benefit from.

As a more concrete (and more personal) example, consider the following. Airing as I write these lines is yet one more ad for Lipitor, one of the newer Statin drugs for lowering cholesterol. In it is this supposedly older gentleman extolling its virtues and going on at some length about the positive difference it has made in his life. Crestor follows a similar theme, like all Statins.

I take issue with these claims because they aren’t always true. In 2003 my physician prescribed Crestor for me because he felt my cholesterol was slightly elevated. The PDR write-up on it acknowledges severe muscle pain as a common reaction/side effect. What the manufacturer-supplied information failed to disclose (and all Direct to Consumer advertising continues to fail to disclose) is that Crestor can cause serious heart problems, potentially leading to premature heart attacks.

I found it necessary to discontinue taking the drug after less than a week on it. As I later told my physician, before Crestor came along, when the weather was decent and I was in the mood, I thought nothing of walking from downtown to my favorite store a couple of miles away (one way) just to go shopping, and then walk another two miles (or so) back home. After less than three days on the Crestor, I could not walk more than two blocks without having to stop to regenerate enough stamina to traverse the next two blocks. This stark change happened factually over night, and its after effects lasted for several years.

Thus, were I to formally “review” Crestor, that review would be both negative and scathing in tone because I would delve in depth into my own experience, while stressing that my reaction must not be considered to be typical of everyone who takes it. Rather the represent a cautionary tale worth taking into account. Obviously such brutal honesty is possible only when no underlying financial (or other) relationship exists.

I applaud this very well written update (it is available as a PDF document in a link to the Press Release at the FTC’s website). Now, I really wish the FTC would do something about restoring sanity (and reality) to automobile advertising.

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