Putting The Cards On The Table With The FTC Full Disclosure.

I would be remiss if I didn’t cover the latest guidelines released by the Federal Trade Commission as it relates to the liability and responsibilities of the blogging community so let’s take a look at the repercussions of this new policy, okay?

In January 2007, the Federal Trade Commission (FTC) decided to nudge their way into addressing the way that bloggers are covering and reviewing products provided by various companies. It has become quite apparent that bloggers are now officially recognized as legitimate sources of media and the government intends to find a way to regulate them to make sure that they are all on the proverbial “up and up” and protect the consumer from any false information. I think this is a great thing. In the end, we are all consumers and while there are bad products out there, we want to make an intelligent and informed decision as to what it is we are buying for our needs.

So what does the new FTC guidelines mean to you as marketers? It affects endorsements.

While the definition of “endorsements” maybe a bit vague to some, the FTC has apparently focused the definition on the message the consumers takes “from the speech at issue“.  As it relates to testimonial advertisings,

Advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect.

What this seems to mean for marketers is perhaps nothing really different from what you already see from customers that are featured already. But, did you know that endorsements by bloggers are also subject to this new rule by the FTC? It is now mandatory for those bloggers who are being paid or rewarded by companies to disclose that they are receiving compensation. However, enforcement of this provision is subject to a case-by-case basis, the fact that a blogger is receiving payment or in-kind payment to review a product is considered an endorsement – so be prepared for a blogger to disclose it.

This is probably common sense, right? For marketers, if you’re going to be seeking out bloggers to help review or promote your product/brand, they’ll typically disclose that they’re being paid by your company for some unknown value – whether it’s a review product or an undisclosed sum…in fact most influential bloggers in the industry should probably have some knowledge about disclosure, right?

What’s this about these guidelines being “administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves.“?

It does appear that these are not legally binding principles. So there will be no harm in simply avoiding them, right? Wrong! Once a complaint is filed with the FTC in violation of this Act, it appears that any offenders who have been judged to have willfully violated this Act will be charged $11,000 each time – this according to Brian Solis. In fact, in a blog post on Network Solutions by Michelle Cohen, a Certified Intellectual Privacy Professional, not only could the blogger be charged, but YOU as the advertiser could be fined for violation.

An advertiser may be liable under Section 5 of the FTC Act for a blogger’s misleading statements if the advertiser initiated the process that led to these endorsements being made. Moreover, both the advertiser and the blogger are subject to liability for misleading or unsubstantiated representations made in the course of the blogger’s endorsements. The FTC indicates that its law enforcement activities will continue to focus on advertisers.  However, endorsements by bloggers are now covered by the Guide and bloggers should be careful to review the revised Guide and the examples provided by the FTC.

While marketers may not see all bloggers as equals – with some with varying influence in their respective communities, according to Brian Solis, the FTC has acknowledged that they can’t blanket the entire blogosphere with this rule and have the policy apply to all equally. In Solis’ post, he lists a response from the FTC stating:

All bloggers aren’t the same and we are not saying that all bloggers are marketers. Most of them are ordinary folks musing or sounding off. The question as we put it in the notice we published today is whether, viewed objectively, the blogger is being sponsored by the advertiser. (We list a number of factors to consider.) Independent product reviewers, whether offline or online, would not be viewed as sponsored by the company whose products they are reviewing.

So this seems to mean that if you as the marketer are reaching out to bloggers or those who are reviewing your product, be they writing on a blog, posting a video response or perhaps still imagery, you need to be aware that you and the reviewer may be violating federal statutes.

Disclosure seems to be the main point in all of this. Make sure that all parties are protected and when you think it’s something that you might get in trouble for, it’s probably best to disclose it. If you’re getting paid or receiving some in-kind payment, you need to be up front and let people know so that they can make an informed and correct decision on the viability of your product.

It’s the ethical thing to do, it seems.

Related resources:

Leave a Reply

Discover more from Ken Yeung

Subscribe now to keep reading and get access to the full archive.

Continue reading