FTC Guidelines Examples of Material Connection
16 C.F.R. § 255.5.
Example 1: A drug company commissions
research on its product by an outside organization. The drug company
determines the overall subject of the research (e.g., to test the efficacy
of a newly developed product) and pays a substantial share of the expenses
of the research project, but the research organization determines the
protocol for the study and is responsible for conducting it. A subsequent
advertisement by the drug company mentions the research results as the
“findings” of that research organization. Although the design and conduct
of the research project are controlled by the outside research
organization, the weight consumers place on the reported results could be
materially affected by knowing that the advertiser had funded the project.
Therefore, the advertiser’s payment of expenses to the research
organization should be disclosed in this advertisement.
Example 2: A film star endorses a particular
food product. The endorsement regards only points of taste and individual
preference. This endorsement must, of course, comply with § 255.1; but
regardless of whether the star’s compensation for the commercial is a $1
million cash payment or a royalty for each product sold by the advertiser
during the next year, no disclosure is required because such payments
likely are ordinarily expected by viewers.
Example 3: During an appearance by a
well-known professional tennis player on a television talk show, the host
comments that the past few months have been the best of her career and
during this time she has risen to her highest level ever in the rankings.
She responds by attributing the improvement in her game to the fact that
she is seeing the ball better than she used to, ever since having laser
vision correction surgery at a clinic that she identifies by name. She
continues talking about the ease of the procedure, the kindness of the
clinic’s doctors, her speedy recovery, and how she can now engage in a
variety of activities without glasses, including driving at night. The
athlete does not disclose that, even though she does not appear in
commercials for the clinic, she has a contractual relationship with it,
and her contract pays her for speaking publicly about her surgery when she
can do so. Consumers might not realize that a celebrity discussing a
medical procedure in a television interview has been paid for doing so,
and knowledge of such payments would likely affect the weight or
credibility consumers give to the celebrity’s endorsement. Without a clear
and conspicuous disclosure that the athlete has been engaged as a
spokesperson for the clinic, this endorsement is likely to be deceptive.
Furthermore, if consumers are likely to take away from her story that her
experience was typical of those who undergo the same procedure at the
clinic, the advertiser must have substantiation for that claim.
Assume that instead of speaking about the clinic in
a television interview, the tennis player touts the results of her surgery
– mentioning the clinic by name – on a social networking site that allows
her fans to read in real time what is happening in her life. Given the
nature of the medium in which her endorsement is disseminated, consumers
might not realize that she is a paid endorser. Because that information
might affect the weight consumers give to her endorsement, her
relationship with the clinic should be disclosed.
Assume that during that same television interview,
the tennis player is wearing clothes bearing the insignia of an athletic
wear company with whom she also has an endorsement contract. Although this
contract requires that she wear the company’s clothes not only on the
court but also in public appearances, when possible, she does not mention
them or the company during her appearance on the show. No disclosure is
required because no representation is being made about the clothes in this
context.
Example 4: An ad for an anti-snoring product
features a physician who says that he has seen dozens of products come on
the market over the years and, in his opinion, this is the best ever.
Consumers would expect the physician to be reasonably compensated for his
appearance in the ad. Consumers are unlikely, however, to expect that the
physician receives a percentage of gross product sales or that he owns
part of the company, and either of these facts would likely materially
affect the credibility that consumers attach to the endorsement.
Accordingly, the advertisement should clearly and conspicuously disclose
such a connection between the company and the physician.
Example 5: An actual patron of a restaurant,
who is neither known to the public nor presented as an expert, is shown
seated at the counter. He is asked for his “spontaneous” opinion of a new
food product served in the restaurant. Assume, first, that the advertiser
had posted a sign on the door of the restaurant informing all who entered
that day that patrons would be interviewed by the advertiser as part of
its TV promotion of its new soy protein “steak.” This notification would
materially affect the weight or credibility of the patron’s endorsement,
and, therefore, viewers of the advertisement should be clearly and
conspicuously informed of the circumstances under which the endorsement
was obtained. Assume, in the alternative, that the advertiser had not
posted a sign on the door of the restaurant, but had informed all
interviewed customers of the “hidden camera” only after interviews were
completed and the customers had no reason to know or believe that their
response was being recorded for use in an advertisement. Even if patrons
were also told that they would be paid for allowing the use of their
opinions in advertising, these facts need not be disclosed.
Example 6: An infomercial producer wants to
include consumer endorsements for an automotive additive product featured
in her commercial, but because the product has not yet been sold, there
are no consumer users. The producer’s staff reviews the profiles of
individuals interested in working as “extras” in commercials and
identifies several who are interested in automobiles. The extras are asked
to use the product for several weeks and then report back to the producer.
They are told that if they are selected to endorse the product in the
producer’s infomercial, they will receive a small payment. Viewers would
not expect that these “consumer endorsers” are actors who were asked to
use the product so that they could appear in the commercial or that they
were compensated. Because the advertisement fails to disclose these facts,
it is deceptive.
Example 7: A college student who has earned a
reputation as a video game expert maintains a personal weblog or “blog”
where he posts entries about his gaming experiences. Readers of his blog
frequently seek his opinions about video game hardware and software. As it
has done in the past, the manufacturer of a newly released video game
system sends the student a free copy of the system and asks him to write
about it on his blog. He tests the new gaming system and writes a
favorable review. Because his review is disseminated via a form of
consumer-generated media in which his relationship to the advertiser is
not inherently obvious, readers are unlikely to know that he has received
the video game system free of charge in exchange for his review of the
product, and given the value of the video game system, this fact likely
would materially affect the credibility they attach to his endorsement.
Accordingly, the blogger should clearly and conspicuously disclose that he
received the gaming system free of charge. The manufacturer should advise
him at the time it provides the gaming system that this connection should
be Disclosed, and it should have procedures in place to try to monitor his
postings for compliance.
Example 8: An online message board designated
for discussions of new music download technology is frequented by MP3
player enthusiasts. They exchange information about new products,
utilities, and the functionality of numerous playback devices. Unbeknownst
to the message board community, an employee of a leading playback device
manufacturer has been posting messages on the discussion board promoting
the manufacturer’s product. Knowledge of this poster’s employment likely
would affect the weight or credibility of her endorsement. Therefore, the
poster should clearly and conspicuously disclose her relationship to the
manufacturer to members and readers of the message board.
Example 9: A young man signs up to be part of
a “street team” program in which points are awarded each time a team
member talks to his or her friends about a particular advertiser’s
products. Team members can then exchange their points for prizes, such as
concert tickets or electronics. These incentives would materially affect
the weight or credibility of the team member’s endorsements. They should
be clearly and conspicuously disclosed, and the advertiser should take
steps to ensure that these disclosures are being provided.
Links to Resources:
FTC Guidelines Endorsements and Testimonials: Detailed
Analysis
FTC News Release on Endorsements and Testimonials
FTC Complete
Guidelines Release
FTC Short Version Guidelines Release
FTC Examples of
Material Connection
FTC Regulation of Advertising
