On the presumption that people are more likely to buy products other people, people they know, have already bought and liked, marketers the world over have used endorsements and testimonials to promote their products. People know celebrities and endow them with greater wisdom—how, after all, could someone become a celebrity and rich beyond the wildest dreams unless they were brighter, smarter, and more savvy? People also live vicariously live through the lives of the famous and wish to do as they do. Thus at least runs the marketing script. Therefore endorsements are associated with well-known figures. People also respect what their neighbors are saying—at least some of their neighbors. Testimonials are made by ordinary people, but advertisers chose such ordinary people because they resemble the "typical" neighbor, the "typical" sports fan, the "typical" purchaser of a riding mower, etc. A hybrid between celebrity and trusted source is the "doctor" endorsement—using actual doctors or figures in white coats. Doctors are a "generic" form of celebrity for most people. Finally, the trusted figure may be an institution widely trusted, e.g., the Centers for Disease Control and Prevention, the Food and Drug Administration, the Olympic Games, and similar entities.
Is all this true? And does it work? Very substantial sums of money have been and continue to be expended to see if advertising works in general and also on testing how it works in particular cases. Proving the effectiveness of advertising remains more art than science—and produces results similar to polling. It is certainly true that celebrities draw the attention of people watching TV, listening to the radio, and leafing through papers and magazines. It is certainly true that doctors, and experts in general, are held in high regard. It is also a matter of observation that in practice undecided buyers will tend to poll family, friends, and neighbors—which supports the effectiveness of testimonial-style advertising.
A CLOSER LOOK
Celebrities chosen to endorse products are almost always in some way linked to the product or service being sold. Famous male sports figures will not be endorsing facial creams; they'll be selling athletic shoes or clothing. People unfamiliar with a product category (e.g. snowmobiles) may have difficulty even recognizing the celebrities chosen to promote it—but insiders will know exactly who the celebrity is. For this reason, celebrity endorsement is not restricted solely to multi-million dollar ad campaigns but may be utilized by a small business in a local market—featuring, for example, a well-known local TV host or the regional winner of a beauty contest. The crucial element is that the targeted audience should recognize the celebrity and trust her or his endorsement. As Marketing Week pointed out advertisers benefit if the endorsement is genuine. Thus it is better to recruit a celebrity already known to use a product than simply to pay a famous face for mouthing some vaguely favorable opinion. Based on federal law, endorsements must be genuine.
The expert doing the endorsement should be an expert. Furthermore the expert must also have evaluated the product or service using appropriate techniques; he/she must be qualified in the relevant area. A surgeon is not by definition an expert on pharmacology. The endorsement should be backed up by tests, evaluations, and/or product comparisons. Many advertisements attempt to create an "air" of expertise in the presentation of a fictitious expert, but close examination will show that the ad does not meet the requirements of an expert presentation.
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 as further developed below.
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 independent (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 Federal Trade Commission (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, companies include "opt-out" clauses in most 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.
Cates, Bill. "Get It In Writing." On Wall Street. April 2001.
"Insight—Celebrity Endorsements: The benefits of keeping it real." Marketing Week. 16 March 2006.
Raphel, Murray. "Realizing the Strength of Testimonials and How to Utilize Them in Your Business." Direct Marketing. June 1997.
Stark, Phyllis. "Redneck Radio: Jeff Foxworthy Style." Billboard Radio Monitor. 8 July 2005.
Toutant, Charles. "Federal Regulators Fault Proposed N.J. Restriction on Attorney Ads." New Jersey Law Journal. 13 March 2006.
"Wall-Mart Ads Tout Surprises." Promo. 16 February 2006.