Posts Tagged FTC

FTC Guidelines on Endorsements and Testimonials

If you’re a blogger getting paid to post, you’re now going to have to disclose it. The social Web is under Federal Trade Commission (FTC) scrutiny. I have worked with several mommy bloggers with very high integrity. A few, however, were running pay for post operations — printing product reviews in exchange for cash — without revealing payments. That is influence gone awry. Now the FTC has put bloggers on notice with a requirement to disclose payments or promotional consideration related to such reviews.

The Federal Trade Commission recently approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act.

The notice incorporates several changes to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980.

Under the revised Guides, 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. In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.

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Is that blogger review really a paid ad? The FTC wants you to know.

050727_mb_Payolacolor_tnThe Federal Trade Commission (FTC) is stepping into the practice of paid posts on the blogosphere and it’s about time. I have personally been solicited by several mommy bloggers who shall remain anonymous willing to write only for cash.  Pay-to-play schemes among mommy bloggers have been commonplace, it is akin to payola in the record industry, and it does a disservice to other bloggers.

Newsweek just wrote a story on the topic, “Trusted Mom or Sellout? How some mommy bloggers are being co-opted by corporate concerns.”

Decades ago there was a crackdown on payola in the music industry as record promoters paid off radio DJs to spin their records and popularize artists. The practice has largely been curtailed, although payments are still made under the table to DJs in major markets. Brands have been willing to shower freebees on bloggers in exchange for editorial coverage that fails to attribute the gifts and their influence. It stinks and it’s corrupting the blogosphere.

According to Consumer Reports:

“The FTC is updating its “Guides Concerning the Use of Endorsements and Testimonials in Advertising,” which were last refreshed in 1980. What this has to do with bloggers is a new form of advertising, called word-of-mouth marketing, in which advertisers pay your favorite bloggers to “review” their products. The bloggers get paid, for example, with free product samples; gift certificates for JCPenney shopping sprees; cash payments; or the loan of a $30,000 Ford Flex for a year.

The bloggers are supposed to write whatever they want about the product—pro or con—but the payments put into question whether they would be inclined to seriously bite the hand of a “friend” lending a car or giving other valuable goodies or cash.

Last December social media blogger Chris Brogan shared on his blog that he was taking cash from Panasonic to visit the Consumer Electronics Show (CES) as their guest. Chris, who I like, rationalized that it was OK to take that cash for travel, hotels and meals, because he liked the idea of attending CES “for free,” he was going to hang with other professional colleagues who were doing the same thing, and he was honest and open about it. Therefore, it was ethical. Of course and no surprise, Chris later blogged about Panasonic which felt like a quid pro quo to me. That’s the problem. If I am going to trust Chris Brogan as an unbiased source but he is taking cash from companies he blogs about, his credibility and reputation go in the trash can.

Years ago I took a reporter from Newsday for lunch to talk about my company. That reporter refused to allow me to pay even for a sandwich and a soda. Why? Reporters at Newsday are disallowed from taking  free anything from companies and their PR reps. Bravo!!!

The FTC is right to investigate and they should extend this investigation far and wide.

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