As digital entrepreneurs we are in the business of promoting and selling products and services online.
Are You an Endorser?
Whether you realize it or not, in many circumstances your online activities make you an “endorser” under the FTC’s rules.
Often, we are promoting other people’s products or services and being paid in some way for doing so.
On our websites, social media posts, and in our emails we tout all the wonderful benefits of whatever product or service we are promoting. That’s all fine, as long as what we say is truthful, but . . .
What the FTC Requires
Under the FTC rules, if there’s a connection between you and the other company that a prospect would not expect and if knowledge of that would affect how the prospect evaluates your glowing endorsement of the product, you are required to disclose that connection.
According to the FTC the ad would be misleading unless that connection is clearly disclosed.
Under the disclosure rule, knowing that you are compensated by the company you are recommending to the prospect is important information for anyone evaluating your endorsement and that fact must be clearly disclosed.
The rules are more strict than you might imagine. This example comes straight from the FTC website:
Question: Do I actually have to say something positive about a product for my posts to be endorsements covered by the FTC Act?
Answer:Simply posting a picture of a product in social media, such as on Pinterest, or a video of you using it could convey that you like and approve of the product. If it does, it’s an endorsement.
You don’t necessarily have to use words to convey a positive message. If your audience thinks that what you say or otherwise communicate about a product reflects your opinions or beliefs about the product, and you have a relationship with the company marketing the product, it’s an endorsement subject to the FTC Act.
Of course, if you don’t have any relationship with the advertiser, then your posts simply are not subject to the FTC Act, no matter what you show or say about the product. The FTC Act covers only endorsements made on behalf of a sponsoring advertiser.
So, even if you just post a photograph or description of a product, if you have an existing relationship with the other company it’s an endorsement and your relationship to the other company must be disclosed.
It should go without saying that no matter how you convey information to your audience the message must be truthful.
If you’re trying to build a reputable business online, sneaky marketing isn’t going to work long-term anyway. You need to build trust with your potential customers and being open and honest is one way you do it.
So, where there can be any doubt in your audience’s minds, make the disclosure.
Now that you have this information, you can amuse yourself by noticing how many internet marketers regularly put themselves in jeopardy by non-compliance with this rule.