Natural Products Insider

NOV-DEC 2018

INSIDER is the leading information source for marketers, manufacturers and formulators of dietary supplements, healthy foods and cosmeceuticals. Since 1997, INSIDER has been serving the needs of the global nutrition industry.

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44 INSIDER November/December 2018 A celebrity endorsement on social media has the potential to go viral, boosting sales of a dietary supplement or cosmetic product far more effectively than through traditional advertising. But marketers must apply several principles when forging relationships with endorsers, cautioned lawyers who closely follow FDA and FTC regulations. "Social media infl uencers are mouthpieces of the company, so any regulator or possibly class-action plaintiff will perhaps rightly consider anything he or she says to be a statement adopted and endorsed by the company," said Ivan Wasserman, a partner in Washington with Amin Talati Upadhye LLP, adding that companies should implement "appropriate controls" to "ensure that they have directed the social endorser on what to say [and] what not to say." That doesn't always happen. In April 2017, FTC staff sent more than 90 letters to infl uencers and marketers after reviewing Instagram posts by athletes and celebrities, among others. The letters, FTC observed in a news release, reminded infl uencers and marketers that "infl uencers should clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media." Later that same year, FTC sent follow-up letters to 21 infl uencers, citing concerns over various social media posts. FTC has published nonbinding guidelines related to endorsements and testimonials in advertising. The guidelines "provide the basis for voluntary compliance with the law by advertisers and endorsers." FTC in 2017 also published a document that answered questions about the use of endorsements. "Whether you're [selling] a weight loss product or anything else, it doesn't mean it's not true, but the FTC says people have to know if there's a relationship between the endorser and the company so that they can decide what credibility or weight to give to the endorsement," said Justin Prochnow, a partner in Denver with Greenberg Traurig LLP. There is a limited exception to making such a disclosure: when the audience expects a connection. FTC guidelines suggest disclosures aren't necessary when a very famous person—someone "known to a signifi cant portion of the viewing public"—is promoting a product. Nonetheless, it can be tricky to determine when a disclosure is necessary. Is a YouTube celebrity famous enough to excuse a disclosure? How about a reality TV star on the Bravo network? In the case of Cindy Crawford, for example, consumers would understand the former model is probably being compensated for a Pepsi television commercial, said Claudia Lewis, a partner in Washington with Venable LLP. But the lawyer said it would be necessary t o disclose that an endorser is being compensated if, for instance, an endorsement was made by a famous person who wasn't considered a household name. The nature of the disclosure itself raises various questions, especially in an era where social media endorsements have proliferated. "Is there enough room on that for Twitter?" asked Lewis, highlighting one of the issues addressed in FTC's endorsement guidelines. "Where does that go? Do you put … the claim fi rst or the 'compensated endorser' disclosure fi rst? How does that work? And FTC has some very strong guidelines on what should and shouldn't be done." The industry, she added, "is catching up to what the rules of the road are on that." One tidbit of advice for disclosures on social media: Don't bury them. FTC doesn't specify where the disclosure should be placed, but the agency examines whether the ad is "easily noticed and understood." FTC also suggested disclosures aren't necessary when an expert is promoting a product if the endorsement relates to an area within the person's expertise. The agency cited the example of a physician appearing in an ad for an anti-snoring product. "Consumers would expect the physician to be reasonably compensated for his appearance in the ad," FTC guidelines noted. The guidelines, however, added a caveat: A disclosure would be required if, Legal: Endorsements Follow FTC Guidelines to Help Avoid Trouble from Endorsements by Josh Long This chart was created using information from FTC. The Do's and Don'ts of Social Media En dorsements ASSUMING followers are aware of an infl uencer's brand relationships Assuming disclosures BUILT INTO social media platforms are suffi cient Use of AMBIGUOUS DISCLOSURES like "Thanks," #collab, #sp, #spon or #ambassador Relying on disclosures that people will see only if they CLICK "MORE" Clear DISCLOSURE of fi nancial or family relationships between a brand and infl uencer Ensuring sponsorship disclosure is HARD TO MISS Treating sponsored tags, including tags in pictures, LIKE ANY OTHER endorsement Use of SUPERIMPOSED DISCLOSURES over images on image-only platforms like Snapchat FTC Recommendations Practices to Avoid

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