//What the Latest FTC Guidelines Mean to Pharma Marketers
July 23, 2015

What the Latest FTC Guidelines Mean to Pharma Marketers

By Jackie Walter | Category: Social Media |

As pharma marketers, we tend to listen closely when the U.S. Food and Drug Administration (FDA) issues guidance, such as their draft guidance on correcting misinformation online, and user-generated content. In June this year, however, it was guidelines from the Federal Trade Commission (FTC) that got our attention.

The updates — published via the agency’s frequently asked questions  and social media marketing guidelines  — focus primarily on testimonials and endorsements. With the rise in popularity of product reviews, the FTC is interested in ensuring consumers can clearly tell the difference between an honest third-party review and a paid endorsement. This has implications for pharmas who work with consumers and HCPs to provide paid testimonials or endorsements.

UPDATES TO ENDORSEMENTS AND TESTIMONIALS

In its first update to the social media marketing guidelines since 2010, the FTC released several guidelines on how to participate in social media when endorsing a product or service, or paying someone to do so on your behalf. The overall goal of the guidelines is to ensure consumers can clearly identify what is marketing and what is an authentic consumer review or endorsement.

The update could impact employees of a company who talk about their products or services online, as well as pharmaceutical companies that work with patient advocates, influencers or KOLs. The guidelines apply to both reviews of the product and any subsequent services, such as patient programs that those individuals may represent.

The updated guidance focuses on three key aspects of endorsements:

  • What an endorsement is and who an endorser is/can be
  • What the endorsement can and should include
  • How to represent yourself if you are an endorser

WHAT AN ENDORSEMENT IS

Within the update, the FTC clearly states what qualifies as a (paid) endorsement, as well as who an endorser is:

An endorsement means  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) … even if the views expressed by that party are identical to those of the sponsoring advertiser. The party whose opinions, beliefs, findings, or experience the message appears to reflect will be called the endorser and may be an individual, group, or institution.

For pharmaceutical companies, this could apply to patient advocates who represent the brand, employees of that company and/or any agency that represents them.

WHAT AN ENDORSEMENT SHOULD INCLUDE

Above all, the FTC requires that paid endorsements be accurate and honest. Anyone who is paid to endorse a product or service must be a “bona fide user” of that product or service at the time of the endorsement. Additionally, when a consumer is paid to endorse his or her experience with a product or service, they must cite substantial facts and figures that validate their experience. A paid endorser cannot make claims about a product that requires proof the company doesn’t have, and they must disclose that their experience is not typical.

HOW ENDORSERS SHOULD REPRESENT THEMSELVES

It is important to provide clear direction to your paid endorsers. Anyone paid to endorse or represent a product or service must “clearly and conspicuously” disclose any and all material connections to the company. Any connection between an endorser and the company that consumers would not expect and that might affect how consumers evaluate the endorsement must be disclosed. To make a disclosure “clear and conspicuous” :

  • For print or web, it must be:
    • Close to the claims to which they relate
    • In a font that is easy to read
    • In a shade that stands out against the background
  • For video ads, it must be:
    • On the screen long enough to be noticed, read and understood
  • For audio disclosures, it must be:
    • Read at a cadence that is easy for consumers to follow and in words consumers will understand

Disclosures should include any sort of payment received, including free products. However, this guidance does not require the endorser to disclose how much compensation they received.

UPDATES TO FTC FAQ

Also in June, the FTC made several updates and additions to its What People Are Asking page on its website. The page is intended to provide answers to questions about the FTC’s Endorsement Guides, which provide information and direction on ensuring product endorsements remain honest and do not mislead consumers.

The updates to the FAQ focus primarily on the implications of endorsements in social media and include an emphasis on character limits, contests and giveaways, sharing content (including images) on social networks, and video content. Pharmaceutical companies that work with patient advocates who use social networks should evaluate how they are promoting those advocates. Any paid influencers speaking on a pharma’s behalf must clearly and accurately disclose their relationship when they post, comment or share on social networks.

The full FAQ can be found on the FTC website here; below is a summary of the direction that most often affects pharmaceutical marketing.

  1. Know your medium. The FTC has clearly laid out guidelines for newer social networks not previously adressed, including Twitter and Pinterest. Character limitations on any social network, including the 140-character limit on Twitter, are no longer and adequate reason for not presenting users with all the information they need. Clear disclosure language must be present in any tweet from a paid endorser or any tweet promoting a contest or giveaway. Additionally, sharing a link on a social network via a Share button requires a disclosure if you are a paid influencer or employee of that company. This also applies to images that are shared without text, specifically those that are shared via the “Pin It” button for Pinterest.
  2. Evaluate video content. The FTC also updated guidelines on video content that features a paid endorser. Any video endorsements must have a “clear and conspicuous” disclosure within the actual video and not just in the description. The FTC defines clear and conspicuous as “on the screen long enough to be noticed, read, and understood.” For pharmaceutical companies that feature patient advocates in video marketing efforts, disclaimer language must be included in each individual video.
  3. Employees are endorsers, too. Employees of a pharmaceutical company, including any employees at ad agencies or PR firms that represent them, are considered paid endorsers if they are talking about the company’s products or services. Any employee doing so must clearly identify their relationship in each post, and a sentence in their social media profile is not sufficient disclosure. Pharmaceutical companies should develop clear social media guidelines for all employees and agency affiliations.

IMPLICATIONS

With the updates to both the social media marketing guidelines and the FAQ, the FTC clearly states what constitutes an endorser and how to treat communication that comes from them. This impacts pharmaceutical companies in several ways:

  • Pharmaceutical companies that run patient advocate and KOL programs should evaluate any communication these representatives make on behalf of the company. Pharma marketers should work with their agencies to provide direction — including clear language — for them to follow. This includes ensuring payment and connections between the company and patient are disclosed in any endorsement.
  • Pharmaceutical companies that produce videos and images and run contests through social media should review those programs to ensure they are in line with FTC guidance.
  • Employees of a pharmaceutical company are considered endorsers when they talk about a product or service online, even if they are not specifically paid to do so. They must disclose their relationship with the company when interacting online. This guidance also extends to agencies that represent the pharmaceutical company.

As communication and advocacy evolve in a social age, so must pharma marketers. Intouch Solutions will continue to monitor additional guidance and publish updates as appropriate.

For more information and ideas about working with influencers and advocates in a compliant manner, contact your Intouch Solutions representative.

The information contained in this document is for general guidance on matters of interest only. Intouch Solutions makes no representations as to the accuracy or any other aspect of information contained in linked websites. The information contained in this document is not, nor is it intended to be, legal advice.