How Do The FTC Guidelines For Social Media Marketing Apply to Aussies

I’m getting a lot of questions from my Australian (and non US) readers about the new FTC Guidelines and how they apply to us.

Each of us are on a number of mailing lists and there is an awful lot of hype coming through – about how you will be fined if don’t meet the new FTC guidelines.

I can only speak from an Australian point of view – but I’m certain that my understanding covers most other countries, even if the legislative provisions are different.

The FTC is the Federal Trade Commission and it’s “role” is to “protect America’s consumers”.   This is the equivalent of the Australian Competition and Consumer Commission (the ACCC), which adminsters the Trade Practices Act.

From everything I have read, the new FTC guidelines appear to relate to the use Endorsements and Testimonials which may be considered deceptive or misleading and expand on the disclosure of when payments (in product, money or services) is received for endorsements.

The main issue is that many products are sold using Endorsements and Testimonials that show results that are NOT typical – that is the majority of the people who used the product or service, did not experience similar results.

This also relates to bloggers and recommendations we make from our sites and on our social networks.

So how does this relate to the Australian Laws and the ACCC?  The Trade Practices Act (1974) (TPA) specifically refers to Testimonials and Endorsements and to Deceptive and Misleading advertising.  The ACCC  states that:

Businesses must ensure that any representations or claims they make are accurate and truthful. The law prohibits conduct that may mislead or deceive customers.

For example, having a celebrity claim that they have used a particular product that they have never used, or even by claiming a celebrity has said something about a product that they have not said – is considered misleading or deceptive.

The ACCC guidleines are similar to those of the FTC, but in my opinion, the FTC is taking the guidelines for false and misleading advertising to the next level.

Essentially, the FTC guidelines require a endorsement or testimonial to reflect the typcial results experienced by users of a product or service.  It is no longer sufficient to show a testimonial saying a purchaser experienced a 1000% growth in income after applying the techniques shown in a guide – IF 20 out of 25 purchasers only experienced a 5% increase in income.  The 5% increase is considered typical.  Labelling an atypcial testimonial as ‘not usual results’ (or similar) is no longer sufficient….

Another aspect of the FTP guidelines is the extension of the examples provided for where a ‘material connection’ (sometimes payments or free products), that a consumer would not expect, exists between advertisers and endorsers.  The additional examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers.  Whilst decisions will be made on a case-by-case basis, if a blogger posts an article and receives cash or in-kind payment to review a product – this is considered an endorsement and should be disclosed to readers.

This would be true for affiliate marketers too – when reviewing a product or service and using your affiliate link, the FTC guidelines indicate that you should disclose that connection.

The Australian Trade Practices Act does not go to that level of disclosure (yet) – although, for services like the Financial Services and Insurance Industries, the fact that advisors may receive a commission for a sale must be revealed.

Personally, I think the guidelines are great.  I have always been a supporter as ‘say it as is’, removing the hype.  I also believe that if you want to be an affiliate marketer and sell products or services – try them first, or at least find someone you know and trust who has used the products or services – and be honest about them.

Creating a Disclosure Statement for your site, along with your Privacy Statement and Terms and Conditions is also appropriate – there is an excellent example of a Disclosure Statement on Lynn Terry’s Clicknewz blog.  This is a great idea for anyone and something that I will be implementing over the coming days.

The thing for Aussies to remember is to not make false claims or be misleading with our marketing or recommendations – write honest reviews and consider disclosing your affiliations.

What are your thoughts?