FTC has updated endorsement and testimonial rules since 1980

This is serious…. Bloggers who refuse to reveal disclosure of gifts or payments from companies reviewing their products/services moving forward will be subject to $11,000 fines per instance. This is part of the U.S. Federal Trade Commission’s revised guidelines entitled FTC Guide Concerning the Use of Endorsements and Testimonials in Advertising.

My guidance to my IBM colleagues remains, and as per our IBM Social Computing Guidelines : We are encouraging  a genuine word of mouth campaign vs a sponsored conversation approach.

The two most important conditions that I would recommend to follow   when using sponsored conversation are

1) sponsorship transparency
and
2) blogger authenticity

Sponsorship transparency means that both the marketer and the blogger must make it absolutely clear to the reader community that they are reading paid content – such as  Google Adwords “Sponsored Links.” Blogger authenticity means that the blogger should have complete freedom to write in their own voice. As long as those conditions of transparency and authenticity are met then sponsored conversation can be a powerful tool  right alongside our PR  efforts. However, blogger outreach with genuine word of mouth is far more impactful  than sponsored conversation. We still need to creatively activate the conversation. Blogging is not a chore that we must / can  lead or direct. Teaming up with the PR team on our blogging outreach programme  is a must, and this more than ever.

Some key points of this announcement :

New guidelines argues that any post of a blogger who receives “cash or in-kind payment to review a product” should be considered an endorsement
·    Because these posts are now officially considered endorsements, bloggers who receive freebies must now disclose this fact on their site.
·    Bloggers who fail to disclose they have received freebies when they write about a product can now be fined up to $11,000 per post.
·    While the FTC will obviously have a hard time enforcing these regulations, there can be no doubt that marketers regularly approach independent bloggers (and especially mommy bloggers) with freebies.
·    While bloggers who are involved in these schemes often tend to say that they would have reviewed the product anyway or that their reviews are often critical, there can be little doubt that payments and freebies influence these stories.
·    These new rules and rather large fines should bring some bloggers and marketers into line, though others will surely continue to push the ethical boundaries.
·    And blogging Payola is unlikely to go away completely because of these new rules.
·    The new rules also take on celebrity endorsements. If celebrities endorse a product and make false or unsubstantiated claims, or don’t disclose ‘material connections’ between themselves and the advertisers in ads and outside the context of the ads (talk shows, social media, etc.), these celebrities can be held liable under the FTC Act.

#full disclosure #blogging #ftc