First-person sponsor endorsements under FTC scrutiny; one case resolved

One of the most common types of sponsor message in podcast advertising is the host-read personal endorsement of a product or service. We hear these every day, advertising products (e.g. mattresses) and services (e.g. personal therapy) and a blend of the two (e.g. meal delivery). The value of those endorsements is based on the celebrated trust factor in podcasting — listeners listen to host endorsements and act upon them.

If you listen to a lot of radio and podcasts, you develop an impression that companies give away a high volume of samples as the basis of this marketing strategy, and that star podcasters are generously supplied with free products. An FTC investigation — started last year and completed last week — potentially pokes a hole in those presumptions.

In 2019 the government agency brought action to Google, iHeartMedia, and 11 other networks, based on allegations that first-person endorsements were not based on actual first-person experience. The action concluded last week.

The word “podcast” does not appear in the FTC’s summary, which appears to focus exclusively on radio endorsements, but naturally the legal principle applies to all spoken-word audio publishing which uses personal testimonials.

The investigation began in 2019, focusing the case on Google (the advertiser) and iHeartMedia (the publisher). It was alleged that iHeart hosts were personally endorsing Google’s PIxel phone, but Google did not actually supply the phones. The allegations counted 29,000 instances of that misrepresentation. The FTC ordered both companies to stop; Google and iHeart will pay $9.4-million in separate state judgments in the case.

Alyssa Myers wrote a summary here; we found it on Podnews.