The FTC is cracking down on deceptive marketing practices in the blogosphere. Tips for staying above board
THERE MAY BE NO MORE POWERFUL ALLY in the creation of positive word of mouth than a popular blogger with a large following who writes rave reviews about your products. Just a few glowing comments about the virtues of your brand can spark a domino effect that can result in tangible returns. Which is why over the past several years there has been a mad rush by many marketers to leverage the power of blogs by sending free product samples and inviting influential online diarists to press events and immersive product experiences. Problem is the practice has gone a little bit Wild West with some brands generating their own inauthentic blogs and quietly paying independent bloggers to write reviews and some bloggers not disclosing the true origins of their presumably objective opinions.
To bring some law and order to the blogosphere the FTC on Oct. 5 released a new set of guidelines designed to address social media and word-of-mouth marketers for the first time. The FTC’s “Guides Concerning the Use of Endorsements and Testimonials” has always required that advertisers disclose their relationships to its product endorsers. (Otherwise how else would we know if Suzanne Somers really loved her ThighMaster or was just being paid to say so?) The revisions which will take effect on Dec. 1 2009 require that blogs and other social media sites adhere to the same rules as traditional media properties. Go rogue and you could face up to $16 000 in fines—per day! So much for lassoing the impact of those “low-cost” authentic votes of approval from the bloggers you just introduced to your product right? Well maybe. Here a top-rated blogger and a former attorney for the FTC give us a closer look at how the new rules will affect your portfolio and what you need to know to stay out of trouble with the feds.
IT’S A QUESTION OF TRUST
“The problem is not deception it’s about the perception of the reader ” says Liz Gumbinner the editor-in-chief and publisher of one of the most popular blogs for parents on the web coolmompicks.com one of Nielsen’s 2009 “Power Mom 50” online influencers and a member of forbes.com’s list of 10 MommyHood Gurus. “It’s about consistent patterns of deception in marketing practices and about advertising programs being disguised as editorial.”
Unlike TV and print social media in large part is powered by the people. So for consumers who look to independent blogs for peer reviews or simply Google a product name and land on a personal blog site the assumption is that the blogger is offering an authentic opinion that is not driven or tainted by any kind of monetary incentive like free product samples. “With personal bloggers if they’re spending a lot of time talking about a product that helped them lose weight it’s assumed that she bought it with her own money and is telling you about a product that she’s purchased ” says Gumbinner. The FTC ruling will presumably add some clarity and help consumers recognize when opinions and claims made online are being influenced by a brand or advertising agency’s
relationship with that blogger or social media site.
“From the FTC’s perspective it’s about ‘what does the consumer reasonably understand the relationship to be ’” says Julie O’Neill counsel in the Washington D.C. office of law firm Morrison & Foerster and a former staff attorney for the FTC in the New York regional office. “This is like a warning shot that they’re interested in this area and they’re going to start taking action.”
Taking action against marketers and bloggers is a two-step process. The FTC will first impose an order that basically says don’t do it again and start complying with the rules. If you violate that order you will be subject to fines of up to $16 000 per violation per day something to be avoided not only because of the financial damages but the bad publicity too. “You don’t want that press release ” says O’Neill. “You don’t want to be the first endorsement guides case.”
O’Neill predicts that brands agencies and bloggers will start to see some crackdowns in the spring but it may take several months to work out the kinks. “Once we see some enforcement action out of the FTC we’ll have a better sense of exactly what it means for a blogger to be sponsored ” says O’Neill. “Does sending out one free product amount to a sponsorship? It’s not entirely clear.” In the meantime a few tips to keep you on the up and up.
HOW TO PROTECT YOURSELF
Make sure you have something in writing between your brand and any bloggers you work with “that sets forth an agreement that the blogger will disclose if it’s received some sort of compensation or free product ” suggests O’Neill. Make sure you also confirm where it will be published (name the URL in the agreement) so you can protect yourself by taking a look and making sure that the blogger complied.
With a written agreement in place (O’Neill says email exchanges will work but hard copy signatures are better) and an understanding between your brand and your bloggers she also suggests brands articulate some recourse if the agreement is broken also in writing. “Say that the blogger agrees that if the company says ‘you didn’t disclose that we sent you all this free product ’ he or she will remedy that ” suggests O’Neill. Making it right can include either taking down the offending statements or publishing something clarifying the relationship or the claim. “Without that second [recourse] piece I think the first part it’s nice. I just don’t think it goes far enough ” she adds.
Gumbinner says the vast majority of bloggers already voluntarily write disclosures with their posts and are operating well within the FTC’s guidelines but recently she went a step further and combined efforts with three other prominent bloggers to create the website blogwithintegrity.com where fellow bloggers can learn about the FTC rules and sign a pledge that states they will “disclose my material relationships policies and business practices” and that “my readers will know the difference between editorial advertorial and advertising should I choose to have it. ” Bloggers that sign can download a badge that can be displayed on their website.
When it comes to events Gumbinner sticks to the same disclosure policy. She was recently flown to a one-day press event at Kmart to learn about the retailer’s new design initiatives. She wrote about it in her blog but also disclosed that the brand had flown her up for the day. “I would rather tell my readers and have them understand the process than to find out afterwards and think that my recommendations were skewed because I went up there ” she says.
While O’Neill thinks it would be unusual to see the FTC do a sweep of bloggers she says “They’re really going to go for the companies because it’s the companies that have the clout and presumably the resources to make sure things aren’t going wrong.” She suggests a spirit of cooperation between both parties.
“A good way to present it to the blogger is to say ‘You’re on the hook too. If you don’t make that disclosure or make a claim about my product that I can’t back up you too are subject to liability so it’s in your best interest for us to work together.’”