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I Said Your Product was Great, Now Gimme a Prize: The FTC Enforces Its Endorsement Guidelines

Yesterday, the FTC settled a deceptive advertising lawsuit against the creators and marketers of the Lumosity "brain training" program. For those of you not smart enough to know, the "brain training" program claimed to not only boost your performance at work or school, but also slow down those pesky cognitive impairments we all seem to experience as we get older.

What was I saying? Oh, yeah. As part of its marketing campaign, Lumosity ran an "Athlete Testimonial Contest" inviting entrants to share their story of how "Lumosity has helped them take their athletic abilities to the next level for the chance to win a Lifetime Subscription, the new iPad, and more!" (NB: Apple frowns upon giving away iPads.)

With this call to action, burgeoning athletes took time away from their snatch and jerks to post their stories online to gain entry into the (sic) "contest". (NB: I have a big pet peeve about calling a chance promotion a contest, and it's made worse by the fact that the court order continues this misnomer.) For instance, John P. from Fairfax, VA wrote that by using Lumosity's braining training program he can "go from muay thai, to wrestling, to jiu jitsu, back to muay thai." Wow! You go, John P.

The problem with this approach was that Lumosity never disclosed that these wonders of nature were solicited to provide these endorsements in return for entry into the sweepstakes. Consistent with the FTC's Guides Concerning Endorsements and Testimonials, the consent order enjoined Lumosity from "clearly and conspicuously" disclosing any "material connection" between any person providing an "endorsement" of Lumosity's product "including but not limited to the use of a contest with prizes to solicit such Endorsement." The order states that, in short, "clearly and conspicuously" means a disclosure that is "difficult to miss (i.e., easily noticeable) and easily understandable by ordinary consumers." An "endorsement" is 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) that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser." And a "material connection" is "any relationship that materially affects the weight or credibility of any endorsement and that would not be reasonably expected by consumers." Like entry into a contest or sweepstakes!

Practice Tips:

It's o.k. to ask consumers to write about your product in return for an entry into a contest or sweepstakes (NB: you can't have a chance promotion where the only way to enter is for the consumer to buy your product to be able to give his/her testimonial). But make it clear that this is what's going:

  1. Require entrants to include language in their postings, such as: #Ad. #Promotional Endorsement. #[name of]Contest or "Sweeps entry provided for testimonial."
  2. Disclose this requirement in Official Rules, ads and prior to entry.
  3. Disclose clearly on your hosting site that the endorsements/testimonials were provided in return for an entry into the sweeps/contest.
  4. If entry includes a video, the entrant must disclose the connection orally and clearly in the video itself.
  5. If you are posting or advertising winners and their testimonials, clearly disclose these testimonials were provided in return for an entry.

NB: "nota bene" from the Classical Latin meaning "take special note." I'm sure glad I passed the "brain training" program. #Endorsement.

Topics: Advertising, Contest, Endorsement, Sweepstakes