Trade Association Settles FTC Charges of Misleading Advertising

Associations are as responsible for the advertising claims they make about services and products as for profit industry.  While many association "products" are training, peer professional networking, legislative advocacy, etc., some nonprofits also have services or products they sell to the general public.  Once they cross that line, they need to make sure they can support any statements about those products or risk the Federal Trade Commission stepping in.  See below.  Bunnie

Trade Association Settles FTC Charges of Misleading Advertising


by Jonathan L. Pompan, Esq., Venable LLP, Washington, D.C.

On January 26, 2010, the Federal Trade Commission (“FTC”) announced it had entered into a voluntary settlement, subject to final approval, with the Indoor Tanning Association (the “ITA”) over allegations that the ITA made misleading representations in its advertising and marketing for indoor tanning. Under the consent order, the ITA is restricted in the claims it may make in its future advertising, must send a notice to its members and recipients of its advertising materials, and must adopt a record keeping program.

The proposed order is significant in several respects. First, it makes clear an association’s obligation to adhere to advertising and marketing law. Second, the order illustrates how an association’s own advertising claims can result in obligations to disclose material risks. The FTC accused the ITA of failing to disclose facts related to health and safety risks that would be material to consumers in their purchase or use of the advertised product in light of the representations made. Third, the order focuses on point-of-sale and other consumer-facing advertising by the association that falls squarely in the commercial realm. The order does not cover representations made in non-commercial settings or contexts, such as communications to legislative or executive bodies.

Many associations advertise and market to develop and defend markets important to their membership. To help minimize legal risk, trade association staff should be well-educated in advertising and marketing law to ensure that their advertising claims are truthful and not misleading. In addition, claims must be substantiated, particularly when they concern health, safety or performance.

Association staff and legal counsel should consider the following pointers:

• Sellers are responsible for claims they make about their products and services. Third parties – such as advertising agencies or website designers – also may be liable for making or disseminating deceptive representations if they participate in the preparation or distribution of the advertising, or know about the deceptive claims.

• Stick to claims that can be supported. The type of evidence needed will depend on the product, the claims, and what experts believe necessary.

• Avoid disclaimers and disclosures that are difficult to notice, read or hear. However, a disclaimer cannot remedy a false or deceptive claim.

• Product and service demonstrations should show how the product will perform under normal use.

• FTC guidance suggests that association endorsements “must be reached by a process sufficient to ensure that the endorsement fairly reflects the collective judgment of the organization.”

• Certain regulated products and services trigger specific laws (e.g., Textile and Wool Acts, various consumer financial products and services) and regulations. Moreover, certain forms of advertising are subject to specific guidance (e.g., FTC Guide on Environmental Advertising, FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising).

• Competitors may challenge advertising claims under self-regulatory programs, such as the Council of Better Business Bureau’s National Advertising Division, as well as under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).

• Obtain appropriate insurance for advertising and marketing activity.

* * * * * *
Jonathan L. Pompan, an attorney in the Washington, DC office of Venable LLP, represents nonprofit organizations and others in regulated industries in a wide variety of areas, including advertising and marketing law compliance, as well as in connection with Federal Trade Commission and state investigations and law enforcement actions. Prior to joining Venable, Mr. Pompan was an in-house counsel at a trade association where he reviewed advertising and marketing in advance of publication. For more information, please contact Mr. Pompan at 202.344.4383 or jlpompan@venable.com.

For more information about this and related industry topics, see www.venable.com/associations/publications.




This article is not intended to provide legal advice or opinion and should not be relied on as such. Legal advice can only be provided in response to a specific fact situation.

Messaging Crisis for Nonprofits

In December I published a link to Nancy Schwartz's "2009 Tagline Report." Here it is again: http://nonprofitconversation.blogspot.com/2009/12/freebie-corner.html The Tagline Report is an important publication for nonprofits who so often are laboring under taglines that simply do not convey the heart of who they are.

Now Nancy has completed a survey on nonprofit messaging that you won't want to miss. It is enlightening and somewhat predictable. Marketing often takes a back seat in the nonprofit budget. Business understands that it must spend at least ten percent of its budget to market, but most nonprofits would never dream of allocating that much. Consequently nonprofits often fail to do the research they need to do in order to find out which "messages" connect with their constituency or they fail to spend time making sure each member of their staff is communicating a unified message.

I think this article is fabulous and I know you will too! Bunnie

Messaging Crisis for Nonprofits

by Nancy Schwartz, Nancy Schwartz and Company

The overwhelming response to our recent survey on nonprofit messaging reinforces how vital it is for your organization’s messages to connect with key audiences.

Relevance (i.e., connection) is a prerequisite for conversation and thus, for communications success. If your messages are off, your organization will fail to engage your base. And, without that engagement, there’s no way you’ll motivate them to act – give, volunteer, register or advocate.

So, based on our findings, it’s clear that strengthening messaging is a priority for many of you. I urge you to digest the findings below to learn more about the state of nonprofit messaging today, and how you can shape messages that do connect.

Here’s the survey if you’d like to review questions asked while digesting the findings.

Most Nonprofit Messages Don’t Connect Strongly with Key Audiences

Eighty-four percent of nonprofit communicators say that their messages connect with target audiences only somewhat or not at all. That’s 915 nonprofit communicators working with organizations of all sizes, issue focus and geographies who rate their messaging as failing to generate the conversations they need to.

Looking at the flip side, only 16% of nonprofits rate their messages as connecting well. This is a dismal success rate, especially since it’s not due to lack of effort. Survey respondents report working extremely hard to achieve their marketing goals: huge effort with minimal results.
That’s a very serious problem.

Behind the Disconnect: 86% of Nonprofits Characterize Their Messages as Difficult to Remember
Most nonprofits report that their messaging suffers from lack of inspiration (73%), poor targeting to audience wants and needs (70%), and difficult to remember (86%). Three strikes and you’re out.

Few communicators laud their messaging for its strengths: Only 13% of organizations characterize messaging as cogent while 8% describe their messaging as potent.
These comments from survey participants explain why their messages fail to connect:

“Our messages need to be more succinct to communicate how effective we really are.”
“We don’t move our base to action.”
“We have individual elements that are ok solo, but no unified path.”
“Our messages aren’t hard-hitting or targeted enough. So they fall flat.”
“We need to shape messages that are simple enough for staff to remember and feel comfortable in repeating it to others.”
“Too much jargon. I can’t even understand what we’re saying.”

Inconsistency Reigns Supreme, Leaving Confusion and Annoyance in Its Path

There are numerous tactics to craft more relevant messages. However, when aiming to increase relevance, it’s imperative to go beyond delivering a few relevant messages here and there. The real challenge is to consistently deliver messages that connect.

Here’s the rub: Less than 50% of nonprofits report consistent use of their core messaging (organizational tagline, positioning statement and talking points). That means that even though most organizations have taken the effort to craft messages, those messages aren’t used consistently across channels (website, direct mail, email), audiences or programs.

Inconsistency breeds confusion and annoyance. When your network has to decipher what organization is reaching out to them (because the messages are unfamiliar) and what you’re trying to say (because it’s new to them), you’ve failed. They just won’t do it in the noisy, cluttered message sphere.

Your Checklist for Messaging that Connects

Most nonprofit communicators (78%) see these characteristics as crucial for messaging that connects:

Clear
Focused
Concise
Engaging
Unique
Memorable

What’s Getting in the Way: Effective Messaging Stymied by Lack of Focus and Leadership Support

Survey respondents share many of the same barriers to (and frustrations in) improving messaging. Here are the leading obstacles to doing better:

Lack of leadership support
Too busy
Concerned about expense
Diverse audiences
Complex programming
Blinders, e.g. lack of external perspective
Colleagues, volunteers, members untrained as messengers.

Here are respondent comments about their barriers to creating messaging that connects:

Lack of Leadership Support and/or Understanding

“Funds are prioritized for fundraising, not marketing. Our leadership doesn’t understand how the two are halves of a whole. How can I build that understanding?”

Staff and Leadership

“Too many cooks. Each department and location has their own ideas and frequently don’t check in with marketing to see if it’s ok to use them.”
“Hard to engage, reach and train staff in our 41 locations.”
“Hard to shape a useful message development process, as board members have widely divergent perspectives and are very involved in communications. Help.”
“No time to train/educate/empower staff, board and volunteers to understand and deliver messages.”

Complexity of Issue Focus

“It’s tough to create effective messages for an anti-poverty project that focuses on education and long-term change over time in a foreign country that is not in ‘crisis’ mode (such as Sudan or parts of Africa), yet is still one of the poorest in the Western hemisphere.”

Diversity of Program Work

“How do we find a way to speak for more than 32 programs in a targeted way while maintaining consistent organizational messages?”

Lack of External Perspective (a.k.a. blinders)

“Our messages are typically crafted from the ‘inside out,’rather than shaping them to the wants and needs of specified audiences.”

There’s Huge Potential for Stronger Nonprofit Messaging: Three Steps to Take You There

These survey findings are incredibly useful in showcasing what’s critical in making messages work, and what it takes to get there.

Here are my recommendations for your first three steps to stronger messages.

Ensure that your organization’s strategy and goals are crystal clear

I can’t tell you how many times I’ve been hired to develop a message platform (tagline, positioning statement, talking points) for an organization but can’t get to ground zero because there’s no agreement on organizational direction and goals.

Without clear organizational goals, marketing goals can’t be defined but without them it’s impossible to define the right audiences to engage. If this is your situation, your problems are bigger than weak messaging. Get on it!

Build understanding and support of leadership and colleagues — You need their insights and reach

The three most-cited barriers to effective messaging (lack of leadership support, too busy, and concern about expense) underscore the degree of messaging crisis. Communications succeed only when it’s built on effective messaging. Refusing to invest the time and money it takes to craft those messages will undermine your entire communications agenda. It’s an investment your leadership can’t afford not to make.

But here’s what you’re up against: Nonprofit staff members most focused on making the most of their messages are communicators (58%), fundraisers (40%) and program staff members (21%) in order of survey participation level.

That’s important because it highlights that communicators have a lot of work to do to develop support for and input in the message development process. Cross-organizational participation is even more vital once your messages are ready to roll. Your colleagues are your primary on-the-ground messengers via their workday conversation and communications.

Start with your tagline — Less is more

It’s always harder to write something shorter than longer, and your tagline is as short as it gets. It is the absolute essence of your messaging.

Moreover, your steps in the tagline development process build the insight you’ll need to craft a potent positioning statement and key messages or talking points (the other two elements in your message platform).

Consistency is the Be All and End All of Messaging Impact

There are a numerous tactics to deliver more relevant messages. However, when we aim to increase relevance, we don’t mean that we simply want to deliver a few relevant messages here and there. Simply developing a compelling welcome email is not enough. The real challenge in email marketing is to consistently deliver relevant messages.

Make it easy for your network to recognize that a communication is coming from your organization by being consistent – in language and tone – in your outreach to each segment.

Tell Me about Your Messaging Hopes, Challenges and Strategies

Please email me on what you’re doing to strengthen your messages (at the organizational or program/campaign level) and what’s getting in your way.

I’ll be drilling down on messaging this year, and would like to share your experiences and guidance with your fellow nonprofit communicators.