ASE09 Session: Hot Topics in Marketing Compliance and Enforcement

Session Description: Hear from regulators and industry insiders on critical legal issues facing affiliate marketers today, including advertising practices, affiliate liability, and enforcement priorities. The panel consisted of:

• Jeffrey Greenbaum, Partner, Frankfurt Kurnit Klein & Selz PC (Twitter @jeffgreenbaum) (Moderator)
• Leonard Gordon, Director, Northeast Region, Federal Trade Commission
• David Graff, General Counsel and Sr. Vice-President, Corporate Development, Epic Advertising
• Peter Marinello, Director, Electronic Retailing Self Regulation Program, Council of Better Business Bureaus

With all the talk about disclosure going on lately, I thought this session would be a great chance to learn more about how the FTC expects to enforce the over-zealous disclosure they’re now talking about requiring.  I was disappointed that there was no mention of it until the end of the session and that no one asked about it before I had to leave.  The session went long and I had to run to get to GeekCast Live.  It was definitely a wealth of information; I just wish Jeffrey hadn’t talked and gone through his slides so fast!

Bullet Point Review!

• Affiliates need to be careful about the types of endorsements they use.
• Affiliates can get into trouble using celebrity pictures and trademarks.
• Epic Advertising does their research to make sure testimonials used are legitimate and documented.
• There’s no silver bullet.
• Noncompliance is more lack of attention to detail than maliciousness.
• Even if a celebrity endorsement is true, you need their explicit consent to use it.
• What is Advertising?
  • Traditional Media
  • Company Sites
  • Public Relations
  • Spokespeople
  • Branded Content
  • Viral Videos
  • Product Placement
  • Review Sites
  • Facebook Pages
  • Blogs
  • Tweets
• What Rules Apply?
  • Federal
  • State
  • Local
• Deception
  • Tell the truth and don’t mislead.
  • Keep your promises.
  • You’re responsible for express and implied claims.
  • You must have prior substantiation to back up your claims.
• FTCv. CVS Pharmacy Case
  • Accused of misrepresenting how they were protecting customer privacy.
  • Found that discarded customer information was thrown into dumpsters behind the stores that were accessible by anyone.
  • Held accountable.
• Disclosures
  • Is qualifying information necessary to prevent a claim from being misleading?
  • Disclosure must be “clear and conspicuous”.
  • Mouse type probably won’t do the truck.
  • Is the disclosure in close proximity to the claim?
  • Disclosures are judged by a performance standard.
• No pre-checked boxes.
• Disclosures must be separate from terms and conditions.
• Endorsements
  • Must be real.
  • Honest, unbiased opinions.
  • Accurately reflect performance.
    • You can’t use an endorser to make a claim that you couldn’t make yourself.
  • Subject to FTCreview.
  • “Results Not Typical”
• Unfairness is about harm, not about deception.
• ERSP is a self-regulating body.
• No real punitive damages; can only recommend changes to be made.
• Clinically proven claims have to be reliable and competent evidence.
• Clinical Testing Data
  • Independently conducted (double blind study, placebo controlled).
  • Adequate sample size.
  • Conducted over a reasonable period of time.
  • Statistically significant results (95% confidence level).
  • Claims = data.
• Affiliate has the responsibility to confirm that the claims are true.
  • There are some obviously questionable categories of offers that should always be questions before run, like nutritional supplements, weight loss, etc.
  • You as an affiliate can be held individually liable for damaged in a lawsuit.
• FTC has two responsibilities – consumer protection and anti-trust.
• The Obama administration has put pressure on the FTC to look to protect consumers heavily affected by the economic downturn.
  • Extra scrutiny of loans, mortgage, jobs, debt consolidation advertising.
• Be careful when marketing to children as the rules are becoming more strict.
• Is it okay to collect data when a consumer consents?
  • Consumers don’t understand terms and conditions – the FTC thinks it’s borderline absurd to think that they do.
• Disclaimers should be written with the same panache as the ads themselves.
• Terms need to be crystal clear.
• Consumers don’t understand how online ads work.
• FTC doing more research of “green” ads and hope to publish more guidelines soon regarding claim standards.
• FTC is expecting to be partnering with the FDA more to regulate health and safety advertising.

I talked to another attendee of the session, Rebecca Madigan from the PMA, who said the session went on for about another 15 minutes after I just had to leave to get to my next speaking engagement on time.  I hope she posts more about the session somewhere!  Jeffrey, Peter, and David all had their own presentations, but the only one on SlideShare is Peter’s.  Here’s the presentation: