All about the tout: Takeaway tips from the FTC’s Sony-Deutsch settlements

Looking for PlayStation tips and tricks? We can’t tell you how ISA Vekta Special Forces Team Alpha can navigate the Akmir Snowdrift in Killzone 3. But for businesses – including ad agencies and PR firms – interested in keeping their practices out of the Pyrrhus Crater, the FTC’s proposed settlements with Sony Computer Entertainment America and ad agency Deutsch LA offer practical guidance.

The lawsuits charge that the companies overhyped the capabilities of Sony’s PlayStation Vita. Despite claims that “With Cross Platform Gaming, you can play your PS3 game, pause it, then pick up right where you left off,” the FTC says the performance of the handheld device didn’t live up to the promises.

What’s more, before the PS Vita launch, a Deutsch assistant account executive sent a company-wide email asking colleagues to post comments about the product on Twitter, using the hashtag #gamechanger. So Deutsch staffers wrote glowing tweets from their personal accounts, without disclosing their connection to the ad agency or Sony. The complaint challenged that as a deceptive practice, in violation of the FTC Act.

Of course, the proposed settlements apply just to Sony and Deutsch. But what can other companies take from the cases?

Ready, launch, aim?  Sony claimed the PS Vita would revolutionize gaming with a host of new features. For example, according to the ads, users could start a PlayStation game at home and then resume play on the Vita from another location. But there was an undisclosed catch. That feature was available only for a few PS3 games and the pause-and-save capability varied significantly from game to game. Furthermore, for the limited number of titles where that function even worked, Sony didn’t tell people they’d have to buy both the PS3 and the PS Vita versions of the game. The settlements remind companies readying a roll-out to make sure their “gamechanging” products live up to the hype. Put another way, don’t let your ads write checks your product can’t cash.

Validate your visuals.  Visuals can speak to prospective buyers just as persuasively as what you say. That’s why established principles of substantiation apply to depictions, too. Some Sony ads showed the popular PlayStation game Killzone 3 being played on the PS3 console, paused, and then picked up again on the PS Vita at another location. The problem was that Vita users couldn’t easily access data-rich games like Killzone 3 and Sony never enabled the “remote play” feature on that title. The lesson for advertisers? Consider the claims your words and visuals convey to consumers.

What’s the buzz?  Of course, marketers want to create buzz about their products, but truth-in-advertising principles apply on social media platforms, too. One notable example: If there is a material connection between an advertiser and a tweeter (or blogger or other endorser), it has to be clearly disclosed. What’s a “material connection”? According to the FTC’s Endorsement Guides, it’s a connection that might affect the weight or credibility a consumer would give the endorsement. It just makes sense, doesn’t it? Wouldn’t you evaluate a favorable recommendation from a consumer with no connection to a company in a different light from a rave review by someone who works for the seller?

“But we like it! We really like it!”  Some endorsers justify their failure to disclose a material connection on the ground that they truly like the product they’re touting. Of course, it’s important that endorsements “reflect the honest opinions, findings, beliefs, or experience of the endorser” – but that’s not the sole criterion for legal compliance. Genuine enthusiasm for a product doesn’t change the obligation to disclose all material connections.

Social studies.  To guard against a social media misstep, advertisers, ad agency execs, PR professionals, and endorsers should educate themselves about the dos and don’ts. To introduce your employees to the Endorsement Guides, show this video at your next staff meeting. Looking to dive deeper? The Guides include dozens of real-world examples. And The FTC's Revised Endorsement Guides: What People are Asking takes on some of your toughest questions.