Healthy Skepticism Library item: 9126

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Edwards J, Ebenkamp B.
FTC May Go After Celeb Endorsements
Brandweek 2007 Apr 2
http://www.brandweek.com/bw/news/packaged/article_display.jsp?vnu_content_id=1003566021

Full text:

Football great Dan Marino is just one of the celebrity spokesman the FTC wants to know a little more about.

NEW YORK — Celebrities and consumers making incredible-sounding claims in ads may soon get new scrutiny from the Federal Trade Commission.

The FTC, which some say has gotten more combative of late, is considering tightening the rules, which could affect everything from celebs’ claims about brands on talk shows to fact-checking assertions of weight loss in ads.

So far, marketers have had little input in the process. (Nor has anyone else-the agency’s only gotten three letters so far on the issue, all from private citizens.) None of the major industry lobby groups have submitted comments to the FTC on its rules review, and no individual companies have commented either. The FTC last month even extended the comment time through mid-June.

After the review period ends, the FTC will deliberate for weeks, or likely months, and then possibly issue new guidelines. The current guidelines broadly state that endorsements must reflect the “honest opinions” of the endorser and may not be in any way deceptive. If the endorser’s results with a product are not typical there must be a “clear and conspicuous disclosure.” When a star is connected with a product and the connection may influence a consumer, “such connection must be fully disclosed,” the guidelines state.

Lawyers who follow the agency believe the FTC is in a mood to make changes. “I think it’s clear from remarks by the chairman [of the FTC] at recent speeches . . . that they’re looking to revise the guidelines,” said Tony DiResta, a partner at Reed Smith in Washington, which represents the Assn. of National Advertisers.

In January, FTC chairman Deborah Platt Majoras asked the ANA in a speech at the group’s business law conference to take part in the review “or forever hold your peace,” DiResta said.

The FTC’s crackdown on weight-loss marketers, which resulted in a $25 million settlement from TrimSpa and Bayer Corp, among others, is seen as another sign of a more pugnacious FTC.

Marketers and their lobbying groups seem to be taking their time. The ANA and the 4As both said they planned comments. The Council for Responsible Nutrition, which represents dietary supplement marketers, said it was still considering the issue.

Yet Ron Urbach, a partner at Davis & Gilbert, a New York law firm that frequently represents ad agencies, worries that many marketers have assumed that mainstream marketers have nothing to fear. “It’s going to apply to everything,” he said. “You could characterize some [marketers] as being asleep at the switch.”

David Palmer, group director/event marketing, strategic alliances and entertainment at Team One in El Segundo, Calif.-where he handles the Lexus account-said he had not heard of the review and doesn’t think it’s causing a stir in Hollywood.

Nevertheless, a ruling on the issue could affect many. For instance, weight-loss brand Nutri-System is running a TV campaign featuring former Miami Dolphins quarterback Dan Marino and former coach Don Shula. Marino claims he lost 22 pounds on the diet and Shula claims 32. The ads say, “Results not typical,” but it is difficult for viewers to figure out what “typical” would actually be. Text in two ads viewed by Brandweek was displayed on the screen for about a second-and was thus unreadable.

In addition to the Marino-Shula endorsements, NutriSystem’s Web site carries testimonials from customers who say they lost between 30 and 101 pounds, but it doesn’t say what an average user can expect. The only indication of what a “typical” result might be occurs when a customer is ready to place an order. There’s a button that states: “I need to lose more than 10 lbs.” NutriSystem reps did not return multiple calls.

The few marketers who appeared worried about the ruling said more fine print in ads would inevitably hurt the pitch. “Obviously it’s going be a little less attractive if a lot more disclosure” [is enforced], said Mindy Gale, president of The Gale Group, a New York ad agency that works on fashion accounts. “When you do a deal with a celebrity there’s an expectation marketers have, and they depend on that blurry area-a lot of true value comes of that.”

But many echoed the sentiment of Phil Klein, a partner at New York law firm Klein & Liss, who said he didn’t think disclaimers or any other type of disclosure would lead brands to reconsider using famous faces. “It’s never gonna happen,” said Klein, who has represented Jay Z., Eminem and P. Diddy’s licensing ventures. “If there has to be an asterisk somewhere, so be it, but pop culture drives our society. For better or worse, celebrities are our culture.”