The Endorsement Game

by Jon Lee Anderson, Esq.

Want to (Be) (Look) (Play) As Good As Me? Just Buy... The Endorsement Game

Probably the most successful advertising in the world comes from product endorsement. You know the type, insurance peddled by septuagenarian actors, fast food gulped down by sports celebs, people that the general public trusts, assigning their faces and fame to a product. Even if the endorser isn't in any way an expert, as long as he or she has seems to have had similar experiences to the target public, and has used the product or dealt with someone who has assisted them in the service being sold, the masses gain immediate confidence in their recommendation, and the product gains immediate credibility. However, while there are no rules for friendly referral or recommendation (like when your best friend tells you the chicken shack down the street has killer curly fries) there are some pretty rigid requirements where the endorsement is found in a commercial or ad. The starting point for sorting out the do's and don'ts of the endorsement game can be found in The FTC Guidelines For Use Of Endorsements and Testimonials In Advertising. These Guidelines define an endorsement as "any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) which message consumers are likely to believe reflects the opinions, beliefs, findings, or experience of a party other than the sponsoring advertiser." It might be a mouthful of legalese, but it does cover the field pretty thoroughly. In layman's terms, it's the chicken shack recommendation from somebody you don't know at all, and with a whole bunch of strings attached. The general provisions governing endorsements are relatively straightforward, and make good sense because they basically reflect a consumer's typical reaction to the advertisement. Examples include:

A. The Honesty Requirement An endorsement has to reflect the honest opinion, findings, beliefs or experiences of the endorser. The endorser can't make claims about a product that cannot be substantiated by the advertiser.

B. The Context Requirement While an endorsement message does not have to be in the exact words of an endorser, it cannot be presented out of context or reworded in a way that actually distorts the endorser's opinion or experience. (For an example, think about book and movie critic's reviews here, and about how they appear in ads).

C. The Use Requirement If the endorsement indicates that the endorser actually uses or used a product, then he or she must have been a bona fide user at the time the endorsement was given. And, the advertiser can continue the endorsement ad only so long as they have a good reason to believe that the endorser remains a user of the product. (To that end, I wonder about little Miss Spears' endorsement of Pepsi, now that we've learned that she likes Coca-Cola).

If this wasn't challenging enough, the rules get a little more interesting when they distinguish among consumer endorsers, expert endorsers and organization endorsers.

For example, when an advertisement leads the public to believe that the endorsers are "actual consumers", then they must be exactly that. This is a frequent issue in "hidden camera" advertising. If the subjects are truly consumers, and their comments and opinions are actually spontaneous and honest, then the advertisement needs no additional commentary. However, if professional actors are used, then this fact has to be disclosed. In addition, consumer endorsements must reflect typical product performance or they must warn you that the endorser's results might not be representative of all users. This is almost an automated disclaimer in diet product advertising. Look at the superscript in the ads with Jared, the Subway guy. You know there are people who'd never lost a pound eating those sandwiches, and the advertiser has to tell you that, one way or another.

An expert must be qualified as an "expert" with regards to what he's endorsing. If he's standing there in a white coat, he or she had better actually be a doctor, pharmacist, scientist or medical professional of some kind. The field of expertise also has to match the purported knowledge as well. It doesn't work to have a Ph.D. if you're being represented as a medical expert.

When an organization endorses a product or service, the FTC views the endorsement as representing the judgment of a group whose collective experience exceeds that of any individual member. Therefore, before an organization's endorsement is proper, it must be reached by a process that ensures it truly reflects the collective judgment of the organization. Majority rules here, and if it can't be reached, the organization's "belief" can't be used to back a product. Then there is that tricky little element of material connections between the endorser and the advertiser. (Think $$$). If there is a connection between the two parties which might materially affect the credibility of the endorsement, and if you can't reasonably conclude that this is something the audience would already know, then this connection has to be disclosed. For example, it's generally understood that celebrity endorsements are made for money, so there is no real need to disclose it. Everybody knows that Gatorade pays Michael Jordan for his endorsement. It is a different matter however when the endorser is not a well known figure and is not represented in the ad as an expert. Here, if the person is paid, the ad should say so.

There are also some things for the professional endorser to consider before accepting an opportunity to become associated with a product. For the celebrity, there is a fine line between being a pitchman or spokesman for a product and being an endorser, and the risk can be significant. If you think back to the definition of an endorsement, a celebrity can easily qualify as an endorser while actually knowing very little about the product. Steve Garvey, the old Los Angeles Dodger baseball player was the subject of a tough lawsuit by the FTC as a result of an infomercial for Enforma Natural Products. The FTC contended that Enforma's claims for its "Fat Trapper" and "Exercise In A Bottle" were false and deceptive, and that Garvey, as a celebrity endorser, either knew or should have known that they were untrue. The court disagreed, finding that the FTC could not prove that Garvey had participated in the fraudulent marketing scheme of the company. He was not an officer, director, promoter or shareholder of the company, had little control over the script for the infomercial, and he testified that he and his wife had used the products and thought that they worked. The court also believed that Garvey was a consumer endorser, not an expert endorser, and thus was not expected to have extensive knowledge in the dietary supplement field.

Despite the results, this case should give celebrities pause to think about their endorsement arrangements. There is probably no real risk if a celebrity merely reads lines from a script over which he had no control or makes accurate statements about his personal experience with a product. But where the endorser has real expertise in a field, or where there is more active involvement with product development or marketing strategy, the risks mount. In that case, the celebrity's counsel should be concerned with more than just the money and conditions for the commercial's shoot.

Summed up poetically, George Foreman seems to know grills And Dan Reeves talks a lot about pills They may be sincere, But I truly fear Bottom line they're really both shills

© January 2003, Jon Lee Andersen All Rights Reserved.