How will new FTC guidelines impact endorsements and product placement?

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How will new FTC guidelines impact endorsements and product placement?

Tue Oct 06, 2009 @ 12:17PM PST

By Eriq Gardner

Conan-obrien-coffee Talent lawyers take note: the FTC is taking a more watchful eye to the ways that advertisers use endorsers to pitch products.

Yesterday, the agency published new guidelines that might increase liability for everyone from celebrities and bloggers to producers of TV shows.

Examples of those being targeted:

  • An actor who goes on Conan O'Brien's show and favorably mentions a product without disclosing he or she is getting paid to endorse the product.
  • A celebrity who expresses appreciation for a product that he or she hates.
  • A blogger who receives cash or some in-kind payment for a website review and doesn't disclose the financial consideration.

In the past, the FTC mostly restricted itself to suing marketers who were dishonest in advertisements. Regulators have gone after celebrity endorsers on rare occasion — including an unsuccessful case against Steve Garvey — but now, the agency wants to let everybody know that endorsers will be held personally liable for dishonest or camouflaged product pitches.

Michael Mallow, a partner at Loeb & Loeb, believes that there's too much money at stake for celebrities to stop taking advertiser endorsements, but that the FTC won't allow anybody to "stick their head in the sand." 

The attorney also adds that the agency's new guidance could even implicate television shows, musicians, and film productions that accept undisclosed money for integrated advertising. This is something to keep an eye upon as branded advertising has been a financial boon inside the world of entertainment.

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The Hollywood Reporter, Esq. blog focuses on how the entertainment and media industries are impacted and influenced by the law. It is edited by Matthew Belloni with contributions from veteran legal reporter Eriq Gardner and others. Before joining The Hollywood Reporter, Belloni was a lawyer at an entertainment litigation firm in Los Angeles. He writes a column for THR devoted to entertainment law. Gardner is a New York-based writer and legal journalist. Send tips or comments to [email protected]

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