ENDORSEMENTS AND TESTIMONIALS



Endorsements and testimonials are modes of advertising in which a business utilizes the statements and/or support of outside individuals or organizations in order to increase consumer interest in the product and/or services it sells. The term "endorsement" tends to be more frequently associated with advertising messages featuring public figures (such as celebrities) and organizations, while the term "testimonial" more frequently refers to advertising campaigns that utilize ordinary consumers and clients. These distinctions are somewhat artificial, however; endorsements and testimonials are treated identically by the Federal Trade Commission (FTC), which exercises primary regulatory oversight of business marketing and advertising practices, and the terms are often employed interchangeably.

Any advertisement that features an actual expert, celebrity, consumer, or organization expressing support for a company's products and/or services is considered an endorsement. This support can take the form of 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. Advertisements containing excerpts of reviews by unbiased third parties (such as film, theater, music, or book reviews) are also regarded as endorsements. Advertisements that clearly feature actors playing the role of consumers or fictional celebrities or organization spokespeople, on the other hand, are not regarded as endorsements.

Endorsements and testimonials can also be used in any medium, from television and radio spots to direct mail business fliers and magazine/newspaper advertisements.

TYPES OF ENDORSEMENTS AND TESTIMONIALS

Endorsements and testimonials can be broken down into four primary types:

Celebrity endorsements. These types of advertising campaigns feature individuals who have achieved a certain level of public recognition because of their achievements in the worlds of sport, entertainment, or some other aspect of media. This type of endorsement is most often employed by major companies engaged in multi-million dollar marketing campaigns. But it can also by utilized by smaller companies engaged in local or regional business activities. Celebrities that are typically utilized by these companies are recognizable in the community in which the firm does business, but they do not have as high a profile as celebrities utilized in national advertising campaigns. The services of these "second-tier" celebrities—local athletes, media personalities, people in the news, etc.—can be secured at a much lower expense than individuals that enjoy widespread national recognition.

Expert endorsements. This form of advertising highlights the opinions of acknowledged experts. An expert endorser must have evaluated the process using appropriate techniques, and he/she must be qualified in a relevant area. This type of endorsement should also provide supporting evidence in the form of tests, evaluations, and/or product comparisons.

Consumer endorsements. These endorsements feature actual users of the product or service being sold. Advertising utilizing customer testimonials must reflect the typical experiences of customers and the genuine feelings and findings of the consumer being highlighted.

Organization endorsements. Endorsements from organizations must reflect the consensus of the organization, and must comply with that organization's standards of formal endorsement. In addition, the organization in question has to be an independent one (rather than one created wholly or partially for the purpose of promoting the advertising firm's products or services.

LEGAL RESTRICTIONS ON USE

Numerous federal and state laws prohibit advertising that misleads or deceives consumers. The FTC is the primary law enforcement agency in the United States in this regard. Its powers range from issuing "cease and desist" orders in cases where "unfair or deceptive acts or practices in commerce" are found to arguing cases in various courts of law (these courts can hand down massive fines and other penalties to violators of endorsement restrictions).

The FTC offers several general considerations on endorsement/testimonial use. For example, it states that "endorsements must also reflect the honest opinions, findings, beliefs, or experience of the endorser. Furthermore, they may not contain any representations which would be deceptive, or could not be substantiated if made directly by the advertiser." The agency also stipulates that while the endorsement message does not have to contain the exact phraseology used by the endorser, "the endorsement may neither be presented out of context nor reworded so as to distort in any way the endorser's opinion or experience with the product. [In addition], an advertiser may use an endorsement of an expert or celebrity only as long as it has good reason to believe that the endorser continues to subscribe to the views presented." With this in mind, the FTC urges businesses to fulfill this obligation periodically and whenever a change in the product/service's function, performance, or material composition is made.

According to the FTC, advertisers also may not state that the endorser uses the product or service being marketed unless the endorser was in fact a user at the time the endorsement was made. "Additionally," states the agency, "the advertiser may continue to run the advertisement only so long as he has good reason to believe that the endorser remains a bona fide user of the product."

The FTC provides particularly strong protections to ordinary consumers utilized in advertising campaigns. Key stipulations of this type of endorsement include: 1) the consumer endorsement should be representative "of what consumers will generally achieve with the advertised product in actual, albeit variable, conditions of use"; 2) consumer endorsements should be clearly marked as such.

Finally, the FTC requires full disclosure of "material" connections. Under these rules, advertisers must disclose all compensation being paid to endorsers, and must divulge any potentially compromising relationships between themselves and the endorser (for example, family or employee relationships). "When there exists a connection between the endorser and the seller of the advertised product which might materially affect the weight or credibility of the endorsement … Such connection must be fully disclosed," explained the FTC. "When the endorser is neither represented in the advertisement as an expert nor is known to a significant portion of the viewing public, then the advertiser should clearly and conspicuously disclose either the payment or promise of compensation prior to and in exchange for the endorsement or the fact that the endorser knew or had reasons to know or to believe that if the endorsement favors the advertised product some benefit, such as an appearance on TV, would be extended to the endorser."

IMPLEMENTING EFFECTIVE ENDORSEMENTS AND TESTIMONIALS

In addition to adhering to existing laws and regulations governing use of endorsements and testimonials for advertising purposes, business experts cite several other considerations that should be weighed by business owners. Some of these considerations are unique to specific types of endorsements (i.e., celebrity or consumer testimonials, which are the two types most frequently utilized), while others are common to all four types.

For example, celebrity testimonials—while potentially valuable in attracting attention to a firm's products and/or services—also have a higher risk factor. For example, media attention on celebrity athletes, singers, and other personalities can turn negative quickly. In these instances, products or services with which the celebrity is associated can be stained by implication. For this reason, most companies include "opt-out" clauses in contracts so that they can end a business relationship quickly and without penalty if the celebrity's reputation is compromised.

Moreover, some analysts question the value of celebrity endorsements in increasing public allegiance to a product or service, especially if the public figure in question is of limited stature (generally, the only type of celebrity whose endorsement is within the financial grasp of smaller and mid-size companies). They instead urge companies to consider customer testimonials, which are widely regarded as more honest and believable, and less expensive and time-consuming to create. "Testimonials given by satisfied customers are far, far more effective than testimonials given by celebrities because the customer-to-be knows the celebrity is paid for their endorsement," stated businessman Murray Raphel in Direct Marketing. "Testimonials are easy to find. They are live, in person, and visit your place of business every day in person, on the phone, or through the mail, fax, or Internet."

Another element of consumer endorsements that needs to be addressed is assurance of legality. All types of endorsements need to be specified in written form. But unlike the celebrity, expert, or association forms of endorsement, in which contracts are expected to be long and detailed, customer testimonials are usually relatively short and simple release forms. "When we originally asked our lawyer for a 'release form' he gave us (literally) a five page single spaced document!," recalled Raphel. "That will scare any potential testimonial-giver, no matter how much they like you or your business." Small business owners, then, are urged to obtain legal advice that will enable them to adopt and utilize short, easy-to-understand contracts that will not intimidate customers.

FURTHER READING:

Berke, Conrad. Successful Advertising for Small Businesses. John Wiley, 1996.

Busler, Michael, and Brian D. Till. "Matching Products with Endorsers." Journal of Consumer Marketing. November-December 1998.

Carr, Robert E. "Are Athletes Still Top Marketing Tools?" Sporting Goods Business. March 25, 1998.

Fisher, Jerry. "All the Raves." Entrepreneur. May 1999.

Rabinowitz, David, and Helene Godin. "What to Do with a Fallen Star: Voiding Endorsement Deal Can Be a Legal Headache." Advertising Age. November 14, 1994.

Raphel, Murray. "Realizing the Strength of Testimonials and How to Utilize Them in Your Business." Direct Marketing. June 1997.

Small, Michael P. Advertising Essentials: An Entrepreneur's Guide to Success. 1st Books, 1999.



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