(Read time = ~3 minutes) Following on its last May promise to further clarify Fair Trade Commission guidelines regarding disclosure rules and paid endorsements/testimonials, the FTC Monday issued notice of changes to its Guides Concerning the Use of Endorsements and Testimonials in Advertising, calling out behavior specific to blogger engagements and paid-per- tweet services.
The Guides are interpretations of law, intended to help advertising and companies comply w/the FTC Act. The Guides were last updated in 1980. Companies, bloggers and other “word-of-mouth” marketers are advised to disclose any “material connections” (payments or receipt of merchandise and/or service, in kind) that consumers would not expect.
Why Care: A Use Case of Accidental Endorsement
Because “paid endorsement” no longer is limited to hard cash, the line blurs quickly for many engaged in the larger conversation. Imaging you’re attending you’re attending the next industry tradeshow. Company A circulates a TweetUp! call and gathering at the second-floor bar. Drinks are freely poured while a product demonstration occurs and management touts the latest and greatest benefits and functionality. Impressed, you tweet the event and comment, ever so briefly, on the product demo, availability and/or functional improvements. A blogger (or two) in the crowd reports on the event and reactions. Have you unwittingly become a “word of mouth” conduit for endorsement? What are the disclosure rules that apply? Where is the line?
We may need a hastag colution to quickly/easily communicate the “sponsorship/payment” case. How about #$… #$$…. #$$$ depending on the amount of compensation? (thanx @spookwrite)
Transparency is goodness, and the policy is aimed at correcting deceptive practices, but it could easily become uncomfortable for those engaged in adding a voice to the larger, social conversation to think that a disgruntled response to a blog post, tweet or Facebook comment might escalate. And for marketers using or thinking of using on-line and social media strategies to push messaging and sustain the buzz, be wary… be smart. Are you at risk of being an unwitting “word-of-mouth” endorser, and therefore having behavior subject to FTC regulation?
Twitter is not specifically mentioned, but the Guides do call out “celebrity endorsement as relates to advertising regulation. TechCrunch in July, did a thoughtful recap of pay-per-tweet networks such as Izea, TweetROI, Twittad and Magpie. Very worthwhile for marketers to pay close attention. What are the implications for personal branding behavior?
The FTC did write that it will review cases one-by-one so evolution of the interpretation will occur. Consider also that In traditional journalism circles, produce reviewers are often provided product for investigation and perhaps public comment. Widely, the products are kept by the reviewer/service yet not always disclosed. This new FTC Guide seems to distinguish bloggers, in particular, as not being legitimate news resources and more simply advertising shill. An unfortunate conclusion.
Oh, and by the way… on-line services and bloggers, in particular,were first to bring the news public. If that’s not journalism, dunno what is… Several resources writing on the topic
- Louis Gray: a think piece/commentary 10/5
- AdAge coverage: today, 10/5
- Yahoo Finance coverage
- The Washington Post
- ITbusiness edge
- Cnet news
- Can “Good Blogging Seal of Apprlval” help Mommy Bloggers Avoid the Regulators?
Should all make for an even more interesting Blog World & New Media Expo beginning Oct. 15. Can’t wait.
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