Thursday, October 22, 2009

The New FTC Guidelines Affect Sports Cards Blogs

The new endorsement guidelines presented by the Federal Trade Commission (FTC) take effect on December 1, 2009. The guidelines are not new laws, but they help explain how bloggers can avoid being investigated by the FTC for deceptive advertising.

After reviewing the guidelines and reading some other sites, I think the biggest effect to these guidelines will be the free box breaks. This will mostly impact the free boxes that card bloggers receive from manufacturers to review their product. I'm not an attorney and I only picked out the ones I think could be issues with card bloggers. If you're concerned, speak to someone who's a compliance expert.

Personally, I'm against free boxes from the card companies. I've talked about this on the Wax Heaven and Beckett blogs and via twitter with Mario and Chris Olds. However, if you're going to do it, here are some keys to keep you out of FTC trouble.

Area #1 - Testimonial Results
The FTC guides say that testimonials that discuss specific results should provide the typical results a customer could expect. Some kind of "odds of getting a XXX in a box are 1 and XXX. While this mostly targets "adds," could an "add" be a free product sent to a blogger for review and to show on the blog? The box of cards has value, so I think it could fit in this category. So when bloggers pull the 1/1 and other rare relics, they need to disclose that it isn't typical and what the odds are of it happening to someone who buys the product off the shelf. Be clear and obvious on your results and and what customers can expect. Don't mess with "the man."

Area #2 - Disclosures
You need to disclose anything that may affect your credibility of endorsing a product. Meaning, if you take payment from a card manufacturer and you review one of their products, then you need to disclose this relationship. This may even affect online forum posts. If someone pays you for ad space, and you promote their product on another forum without disclosing your relationship, this can cause you problems with the FTC. How do you disclose this? Check with an attorney, but I think a link to a section where you disclose your paid advertisers might suffice as long as you link to that in any box break video or review.

Area #3 - Blogger Endorsement
According to the FTC guidelines, if you take payment to write about a product, then that's considered an "endorsement." Small, free items like a box of cards could be considered an endorsement according to the rules. The guidelines don't mention how much value is considered an endorsement. Is a box of cards that cost $100 considered part of this? Does the box have to cost $500 or more? I don't know. If you went out to a local card shop, bought of box cards and reviewed it, that would be considered an "unsolicited review." I don't think you'd have to disclose anything.

The guidelines also discuss coupons for free products. If a company sends you a coupon for a free product, any review of that product would not be considered an endorsement. That's assuming the coupon is also available to people who do not have blogs to check out new products. Hmm.... that sounds like the voucher system I've been talking about all the time.

To be safe, I would recommend saying, "I received this box free from XYZ Company, they also pay for advertising on this blog, and here's what I think of their latest product." I would say it at the beginning and end of any video or blog box break. You should also clearly list the odds of pulling relics, 1/1s, etc. for the box of cards you opening.

Again, I'm not a lawyer or work in compliance. I don't believe getting a free box of cards to review is in the best interest of the consumer. If you do, please keep these areas in mind so you avoid FTC issues after Dec. 1, 2009.

Here are some helpful links about the new guides. I also referred to a Marketing Sherpa article as some source information.
FTC: Guides Concerning the Use of Endorsements and Testimonials in Advertising


Rob- AKA "VOTC" said...

The IAB Interactive Advertising Bureau is contesting these guidelines as unconstitutional. Check B2B Marketing's website for several articles and an interview with IAB Chairmen.

Anonymous said...

From Page 47...

The Commission acknowledges that bloggers may be subject to different disclosure requirements than reviewers in traditional media.

In general, under usual circumstances, the Commission does not consider reviews published in traditional media (i.e., where a newspaper, magazine, or television or radio station with independent editorial responsibility assigns an employee to review various products or services as part of his or her official duties, and then publishes those reviews) to be sponsored advertising messages.

Accordingly, such reviews are not “endorsements” within the meaning of the Guides.

Under these circumstances, the Commission believes, knowing whether the media entity that published the review paid for the item in question would not affect the weight consumers give to the reviewer’s statements.

Of course, this view could be different if the reviewer were receiving a benefit directly from the manufacturer (or its agent).