Endorsements Testimonials Comparative AdvertisingIs the Kyle Petty ad for STP an “endorsement” under the FTC Guides?What does that mean, in terms of Petty’s (a) belief in and (b) use of STP?Is Kyle Petty an “expert endorser”?What does this mean in terms of Petty’s use of the product?What does this mean in terms of Petty’s obligation to evaluate the product?If Petty was paid for doing the ad, does that fact have to be disclosed in the ad?If Petty owned a share of the company, would that fact have to be disclosed?What is the product claim implied in the advertisement?If either claim is false, is Kyle Petty liable in any way?FTC v. Steve GarveySlide 12Dorothy Hamill does testimonial ads for Vioxx as a treatment for osteoarthritis. Is she an expert endorser?What is the advertiser’s responsibility in this (consumer/celebrity) type of claim?Slide 15FTC v. Jenny Craig International. What kind of testimonials were involved?What was the problem?What disclosures were they required to make?InfomercialsHistory of the infomercialSlide 21Slide 22Infomercials todayInfomercials saturate some cable stationsThere are now channels just for infomercialsTV pitchmen have become pop culture iconsInfomercials a rapidly growing form of marketingWhat are the problems associated with infomercials?How did the government deal with the problem of deception?Slide 30Some early FTC cases:Slide 32Some recent FTC cases:Slide 34Are there too many out there for the FTC to chase them all down?Comparative AdvertisingSlide 37What is Comparative Advertising?Arguments in Support of Comparative AdvertisingHistory of Comparative AdvertisingSlide 41Early obstacles to comparative advertisingFTC Policy Statement Regarding Comparative AdvertisingSlide 44The Importance of Truthfulness: U-Haul v. JartranProblems with ad campaignSlide 47Comparative Advertising in a Global MarketplaceSlide 49Guidelines for Effective Comparative AdvertisingSlide 51EndorsementsTestimonialsComparative AdvertisingIs the Kyle Petty ad for STP an “endorsement” under the FTC Guides?“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.” 255.0 (b)What does that mean, in terms of Petty’s (a) belief in and (b) use of STP?“Endorsements must always reflect the honest opinions, findings, beliefs, or experience of the endorser.” 255.1 (a)“Where the advertisement represents that the endorser uses the endorsed product, then the endorser must have been a bona fide user of it at the time the endorsement was given.” 255.1 (c)Is Kyle Petty an “expert endorser”?“An individual, group or institution possessing, as a result of experience, study or training, knowledge of a particular subject, which knowledge is superior to that generally acquired by ordinary individuals.” 255.0 (d)What does this mean in terms of Petty’s use of the product?“An advertiser may use an endorsement of an expert or celebrity only as long as it has good reason to believe that the endorser continues to subscribe to the views presented. An advertiser may satisfy this obligation by securing the endorser's views at reasonable intervals where reasonableness will be determined by such factors as new information on the performance or effectiveness of the product, a material alteration in the product, changes in the performance of competitors' products, and the advertiser's contract commitments.” 255.1 (b)What does this mean in terms of Petty’s obligation to evaluate the product?“His endorsement must be supported by an actual exercise of his expertise in evaluating product features or characteristics with respect to which he is expert and which are both relevant to an ordinary consumer's use of or experience with the product and also are available to the ordinary consumer.” “This evaluation must have included an examination or testing of the product at least as extensive as someone with the same degree of expertise would normally need to conduct in order to support the conclusions presented in the endorsement.” 255.3 (b)If Petty was paid for doing the ad, does that fact have to be disclosed in the ad?When there exists a connection between the endorser and the seller of the advertised product which might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience) such connection must be fully disclosed. An example of a connection that is ordinarily expected by viewers and need not be disclosed is the payment or promise of payment to an endorser who is an expert or well known personality, as long as the advertiser does not represent that the endorsement was given without compensation. 255.5If Petty owned a share of the company, would that fact have to be disclosed?When there exists a connection between the endorser and the seller of the advertised product which might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience) such connection must be fully disclosed. 255.5What is the product claim implied in the advertisement?STP cleans fuel systemsA clean fuel system is better than a dirty fuel systemIf either claim is false, is Kyle Petty liable in any way?Expert endorsers held to higher standards than “consumer” or “celebrity” endorsersConsumer endorser needs to have used the product as basis for evaluationExpert endorser required to conduct independent evaluation of product based on own expertiseFTC v. Steve GarveyFormer LA Dodger starPaid endorser for Enforma Products“Exercise in a Bottle”“Fat Trapper”FTC took position that Garvey an expert because of status as former professional athlete thus liable for making unsubstantiated claims about productCourt held Garvey not an expert endorserWas a consumer endorser and claims about his own experience were accurate (lost weight)Dorothy Hamill does testimonial ads for Vioxx as a treatment for osteoarthritis. Is she an expert endorser?“An individual, group or institution possessing, as a result of experience, study or training, knowledge of a particular subject,