Making sense of the confusing new guidelines for disclosure.
On December 1st the Federal Trade Commission's new Guides Concerning the Use of Endorsements and Testimonials in Advertising (pdf) went into effect changing the way that relationship disclosures are handled for bloggers, social media marketers, advertisers and celebrity endorsements. So far the new guidelines have been largely treated like a Maginot Line on the part of bloggers, with little compliance and doubts about the Commission's ability to enforce the new rules broadly.
Because the guideline has 81 pages I've touched only briefly on points significant to bloggers, but it would be in the best interest of anyone involved in blogging, advertising or social media marketing to read it entirely, along with the 12 pages of Revisions (pdf). The definition of an 'endorsement' is very broad and open to the discretion and interpretation of the Commission or investigating agency.
The new guidelines set forth by the consumer watchdog agency are designed to increase transparency in the relationship between advertisers and bloggers. From now on any material connection or relationship between them needs to be revealed by both parties, even if it was facilitated by a third party (agent, affiliate, marketing group,etc.) Material connection refers to monetary compensation, gratis review samples, additional free products, share of profits, or anything of value. Relationship refers to business, client, affiliate or personal.
If a blogger receives a free book as a review copy this must be disclosed as a material connection, regardless of whether the review is positive or negative. It is not necessary to have an expectation of a positive review in order for the review to be considered an endorsement. All that matters is that some 'thing' of value was exchanged between the two parties. The blogger must "clearly and conspicuously" disclose the advertiser as a 'sponsor' and define any compensation received.
These guidelines also include social networking sites. Any mention of an advertiser on Twitter, Facebook or a similar site must include a disclaimer as well. There has been debate on how to add a disclaimer on character-limited Twitter, but groups like cmp.ly are creating solutions that work not only in Twitter, but in SMS and RSS feeds as well. They have a list of standard disclosures that are simple and easy to use.
Third party marketing is addressed similarly. Receiving material or monetary compensation from an affiliate, agent, marketing agency or what is referred to as 'free samples' marketing, must be disclosed as it is still, although indirectly, received free from the advertiser.
The determination of who will be expected to comply with the new rules is sometimes contradictory and murky at best, but all complaints are open to investigation. "the Commission is setting forth a construct for analyzing whether or not consumer-generated content falls within the definition of an endorsement in Section 255.0(b) of the Guides. The Commission will, of course, consider each use of these new media on a case-by-case basis for purposes of law enforcement, as it does with all advertising." pg.8
It is possible to use a site disclaimer for blogs with paid content or affiliate marketing, but it needs to be clearly visible on the landing page of every advertising post.
There may also be unexpected benefits for non-pro blogs as disclosure becomes standard. Some savvy bloggers have already begun using disclaimers that state that they have no material relationship with the product manufacturer. They realize that, by acknowledging and following the guidelines, they may actually boost their credibility over reviewers carrying the 'paid content' disclaimer or no disclaimer at all.
Most of us who write product and service reviews consider our integrity to be our most important asset. We put our reputations on the line every time we make a recommendation. We covet our credibility because we expect consumers to hold us accountable for those recommendations. But over the last few years there has been an increase in 'paid for' advertising on blogs and social media sites, endorsements disguised as consumer opinions or uncompensated product reviews. And according to womma.org there is an expectation that this type of marketing will become a $3.7 billion industry by 2011.
The FTC has issued statements saying that they are not targeting bloggers. Their target is advertisers who pay for endorsements without disclosure or who deceive consumers by compensating bloggers for claims that exaggerate the benefits of a product. Most complaints are turned in for investigation by competition companies and disgruntled consumers. For this reason it would be unwise to think that the FTC is not going to begin strictly enforcing these new rules, holding bloggers who make false or misleading claims responsible for their part in defrauding the public.
In this video released by the FTC called 'Is the FTC planning to sue bloggers?' there is no such denial that bloggers will be targeted. Just a basic 'do the right thing and then you won't have to worry about it' statement.
Ignorance will not be accepted as an excuse for non-compliance by bloggers any more than it is by telemarketers or by credit card scammers. Questions about the new guidelines have been addressed in this series of videos released by the Federal Trade Commission entitled 'About the Endorsement Guides'.
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