Those running promotions such as sweepstakes or contests on social media may seek to engage influencers, or individuals with significant social media followings, to enhance their promotions’ visibility and boost engagement. But before doing so, there are a variety of rules and regulations to consider and evaluate, including Federal Trade Commission (“FTC”) rules relating to misleading, deceptive, and unfair advertising, state-specific rules relating to promotions, and social-media-platform-specific rules, among others. This post gives a high-level overview of issues to consider before engaging influencers to boost your next contest or promotion.
Even before COVID-19 had turned each of us into an amateur epidemiologist, companies in nearly every industry had begun to recognize the magnetic appeal of health and wellness claims in consumer advertising. Marketers of everything from cleaning products to apparel to furniture to homes were suddenly making claims touting the health and wellness benefits of their products. It wasn’t just better, it was better for you and your family. It will surprise no one to learn that the pandemic year of 2020 only intensified this trend, as consumers focused as never before on the ways that their purchases might not only help them live better lives, but perhaps even keep them alive.
Predictably, competitors, regulators and the plaintiff’s bar have all taken notice of this trend, and moved aggressively in response. In 2020, for example, the BBB National Programs’ National Advertising Division (NAD), the nation’s premier forum for competitor initiated advertising challenges, recorded an extraordinary 50% uptick in challenges to health-related advertising. Similarly, the Federal Trade Commission (FTC), Food and Drug Administration (FDA), Environmental Protection Agency (EPA), and state regulators across the country have focused intense scrutiny on companies claiming to offer health benefits to consumers often desperate for help. It is natural to predict that class actions and Lanham Act activity will soon reflect these trends as well.
So with the undeniable power of these claims balanced alongside the risks of a misstep, how should brand messaging communicate the health and wellness benefits of a product in the “right” way? And what are the red flags to look for in the advertising of your competitors? Here are a few hints:
- Identify the Claims. Advertisement and marketing claims are intended to communicate characteristics of a good or service designed to entice a purchase. Claims are present in all forms of branded communication, from TV commercials, to print ads, radio announcements, pop-up ads, and social media influencer posts. Keep in mind it isn’t just about what you are saying, but what can be implied from the images, graphics and pictures.So whether looking to substantiate your own claims, or to challenge the claims of a competitor, the first step is to systematically identify the statements that actually qualify as a “claim.” For many marketers this can seem daunting, but in fact this initial analysis involves asking just a simple question: what exactly are you promising? Claims are promises and comparisons presented as facts: you should buy this product because it will improve your memory. You should buy this chair because it will reduce your back pain. You should use this cleaning product because (unlike the products sold by our competitors) it does not contain toxic chemicals. Performance claims, superiority claims, comparative claims – all of them are, in the end, statements which are either true or false, accurate or misleading. And it isn’t enough to say “everybody knows X is true” – all claims must be substantiated before you make them. And remember, it isn’t just what you say directly: you can be held accountable for what your spokesperson or influencer says, too.
- Substantiation. What kind of evidence would substantiate the claim? How much data is necessary? Do I need a clinical trial? Is my evidence enough?The simple answer is…it depends. The level of scientific evidence necessary to support a claim always depends on the claim that is being made. Moreover, specific regulatory requirements may apply depending on the claim. If the product claims to ‘sanitize,’ for example, then it is possible that EPA approval may be necessary or it must meet certain FDA requirements. Of course, if the product is not regulated, the standard may differ. This is where talking things through with your counsel is most critical: the same type of claim on a different kind of product may not be subject to the same requirements. In any event, the science must closely match the requirements of the claim language. Don’t let your claim outpace the science – anecdotes from happy customers, or enthusiasm for your product, can never substitute for systematic evidence.
- Magic Language. We all love puffery – and we all think we know it when we see it. But, that isn’t always the case. Statements that are specific, quantifiable or purport to describe objective facts may not constitute puffery, regardless of how over the top the language may seem. Claims about the ‘safest’, ‘best’, ‘highest quality,’ can all require substantiation under certain circumstances. Perhaps it is just enough to merely offer the “finest” of all puffery….
- Is this a Regulated Claim? Is it possible that the product “sanitizes”, has “antimicrobial” properties, or somehow prevents or reduces the likelihood of contracting COVID-19?These statements are important ones as they may transform the product from an ordinary consumer product to a regulated product. Sanitizing and antimicrobial properties may trigger EPA review and treatment or prevention of a disease may render a product a ‘drug’ regulated by the FDA. Of course, the FTC may also assert its authority particularly if these statements are disseminated on a product website or in other forms of advertisement. It is possible that the mere existence of these words invite enforcement activity.
- Is this a Comparative Claim? The most, the best, the mostest, the bestest, the… mostest bestest? We all want to be on top, but sometimes that means a “head-to-head” comparison is necessary to substantiate the claim. Even then, it is necessary to understand that an unqualified comparison may trigger a greater level of substantiation because consumers may understand it to mean “as compared to all leading products nationwide.” Our advice: “Think before you compare” and determine the basis for your comparison – don’t just assume that everyone will understand it in the same way.
While health and wellness claims are subject to an increasingly intense level of scrutiny by competitors and regulators alike, there is little question that consumers want to know whether the products they buy are in alignment with the health and wellness goals they have set for themselves and their family. A well-crafted campaign supported by properly substantiated claims is not only a way to stay out of trouble, but a way of building deeper and more lasting engagement with educated consumers.
In a world where social media influencers can wield more power over consumers than network media buys, the Federal Trade Commission’s (FTC) Endorsement Guides felt increasingly like a relic from an earlier era. While not wholly ineffective, the FTC’s formal guidance to businesses on the use of endorsements and testimonials in advertising was still a policy with roots in the limited media environment of the 1970s, the decade when the Guides originated. There were no Instagram influencers, no sponsored posts, and no hashtags in 1980, when the Guides were finally enacted, and even cable television was in its infancy. And despite important and well-intentioned 2009 amendments crafted during the early days of social media, so much has happened in the intervening years that the Guides never seemed fully engaged with the radical implications of a marketing environment where blurring the lines between advertising and reality is more often a feature rather than a bug.
The Federal Trade Commission (FTC) is not hitting “like” on your influencer engagement campaign, and is down-voting your disclosures.
Earlier this month, the FTC released important new guidance targeted at social media influencers, in language designed to be read by non-lawyers, framing an often confusing legal issue for the people who need to understand it the most: the influencers themselves. These new guidelines, “Disclosures 101 for Social Media Influencers,” were accompanied by a video “Do you endorse things on social media?”, and are designed to show influencers how and when they must disclose material connections to brands to their followers.