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FTC and blogger disclosures

On Monday, the FTC published updated guidance for advertisers using endorsements and testimonials such as blogs and word-of-mouth marketing via celebrities. The guidelines hadn’t been updated since 1980, so the need to get these updated is probably obvious as they had to take out all the references to parachute pants and fluorescent sneaker laces. What do the updates mean for marketers?

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First off, if you’re using any blogs or social networks, and you’re compensating people with freebies or other perks to promote your product, get back in touch with these content providers and make sure they know about the policy. With few exceptions, bloggers don’t generally have a legal staff, so many would appreciate boilerplate language from you as to how they should disclose any “material connections” to your company or product. I think suggesting some language for your marketing partners to use would generally be forward-thinking and usually appreciated.
Second, some people expect the FTC to start policing the blogosphere, although I don’t. It is much more likely that the FTC would look for patterns of undisclosed endorsements and target the companies paying for such. So if you’re not motivated already to make sure your compensation for recommendations is disclosed, perhaps the threat of a fine will provide some motivation. Note that the terms of the fine are per incident—so a single company paying for 10 bloggers to promote their product in an undisclosed fashion could easily be facing a six-figure fine.
Third, and best of all, there’s opportunity here. Some marketers are going to drop out of the word-of-mouth, blog-based endorsement game. That means that if this is a space you can play in—if you’re okay with disclosed endorsements and have a good story to tell about your product or service—then there are bloggers ready to work with you. Some of the bloggers will be losing deals with product or service providers who were paying for their endorsements before, but those bloggers still are ready to endorse other products. So get in touch now and set up your marketing while they’re ready to work with you, and the other players are gone from the scene.
I don’t know why the FTC chose to work on this particular policy at this time. Certainly disclosure is the ethically right thing to do, but rules can’t ensure ethical behavior. There are also many other venues that don’t require disclosure, such as traditional print media, and the FTC policy overlooks those. (How many theater reviews would be written if the reviewers weren’t given free passes to the show?) Both of these concerns are interesting to discuss, but a pragmatic marketer can take away a few key points from the FTC ruling: disclosure is best, the product or service provider is at risk as well as the endorser, and there’s opportunity here to get new partners for your word-of-mouth marketing campaigns.
Disclosure: The author was not compensated by the FTC for this post.

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