Wednesday, May 5, 2010

Navigating the new FTC Advertising Guidelines

Late last year, the U.S. Federal Trade Commission (FTC) published revised guidelines for advertisers on how to keep endorsements and testimonial ads in compliance with the FTC Act. The guidelines address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The last time these guidelines were updated was in 1980—four years before Facebook founder Mark Zuckerberg was even born—so regulators felt updates were needed to incorporate social media and other new marketing platforms.

Last month, the IAAPA Government Relations Committee met with FTC officials to discuss the guidelines and their applicability to the attractions industry. Randy Davis, IAAPA senior vice president of government relations and safety, summarized the discussion, including the questions raised and answers given in a letter. The FTC replied to IAAPA’s letter, confirming the summary was correct, so members can now use the points raised in the letter to help craft their policies.

Here is a summary of the letter:

Media Days

In this situation, the traditional media, as well as “new media” (e.g., bloggers, social media users) is invited to a facility to participate in a special event specifically for the media. For example, a park is opening a new ride and invites reporters and bloggers to preview it and talk to the manufacturer and park executives. Invited guests do not pay for admission.

In our discussion, the FTC indicated this would be considered a news event and therefore the facility operator would not be required to inform attendees that they needed to disclose that they received free access.

Opening Day

Some IAAPA facilities host events on opening day for the traditional media, bloggers, and users of social media. The FTC understands how an “Opening Day” can be newsworthy, especially for facilities that may not have a new ride or attraction that year.

If your facility hosts an “Opening Day” and lets bloggers and users of social media simply have a day in the facility, they should include a statement similar to the following in their write-up: “I was invited to tour [X Facility].” This would be sufficient to indicate they did not pay admission, and would comply with the guidelines.

Monitoring Efforts

We raised the issue of the how extensive our members’ monitoring efforts need to be. According to the FTC, there is a test of reasonableness based on the cost of the monitoring versus the risk of consumer injury. Facilities need to have a monitoring process in place. This should include such things as monitoring the blogs or postings of individuals who they know to be influential, but they do not need to check everything blogged or posted by everyone.

If the facility checks a blog once and finds it complies with the guides, the facility does not have to recheck that blog. If monitoring reveals that the guides have not been followed, a facility does not have to contact the author, but they should consider steps such as not inviting them back.


Another hot topic for facilities is visits by celebrities. In the meeting, we raised the example of a celebrity contacting a theme park and asking to visit. The theme park in this example provides free admission to the celebrity. The FTC told us the issue in these situations is whether or not the celebrity is part of the park’s marketing campaign.

If a facility’s policy is to provide complementary admission to celebrities who are not spokespersons, there is no need for the celebrities to note that they were provided entry free of charge if they later discuss their visit in a blog or a tweet. If the park asked celebrities for a picture and distributed it to local media and social sites, there is still no requirement that free admission be disclosed. However, if the celebrities were part of an overall public relations strategy (i.e., if he or she was contracted as a “spokesperson”), they would need to make the relationship clear.

IAAPA members should familiarized themselves with the regulations and our letter, and make sure their internal policies are in compliance with the new regulations. As with all policies, members may want to check with an attorney with questions specific to their facilities. For general questions, please feel free to contact us.

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