Yesterday, I gave you my take on how the potential new FTC guidelines for endorsements and testimonials might impact bloggers. Today we are going to look at the potential impact on companies.
A couple of things to keep in mind:
- The guidelines outline how the FTC intends to enforce the laws governing endorsements and testimonials in commercial speech. They are meant to be used as an aid to compliance. The new bit is that they are clearly extending the definition of commercial speech into certain social media activities.
- The FTC is still working on these new guidelines, but has said they’ll be out this summer. The new guidelines could change a little or a lot from what it outlined in the call for comments I reviewed, based on the comments received, lobbying and so on. I’m betting a little, but I could be wrong. Been known to happen.
How might companies change/have to change their blogger relations programs and practices to comply with the guidelines?
First, let’s review the three examples related to blogs. The citations are the direct quotes from the document; headlines and emphasis mine. Please note, I’ve changed the emphasis from yesterday’s post. It now reflects the impact on the company. Also, be aware that there is a fourth example specifically related to in-person word-of-mouth marketing, “street teams,” such as the work done by firms like BzzAgent. That’s not my area of expertise, so I’ll leave that one to WOMMA.
Number one: Liability for false statements in a sponsored post.
“Example 5: A skin care products advertiser participates in a blog advertising service. The service matches up advertisers with bloggers who will promote the advertiser’s products on their personal blogs. The advertiser requests that a blogger try a new body lotion and write a review of the product on her blog. Although the advertiser does not make any specific claims about the lotion’s ability to cure skin conditions and the blogger does not ask the advertiser whether there is substantiation for the claim, in her review the blogger writes that the lotion cures eczema and recommends the product to her blog readers who suffer from this condition. The advertiser is subject to liability for false or unsubstantiated statements made through the blogger’s endorsement. The blogger also is subject to liability for representations made in the course of her endorsement. The blogger is also liable if she fails to disclose clearly and conspicuously that she is being paid for her services. [See § 255.5.]
In order to limit its potential liability, the advertiser should ensure that the advertising service provides guidance and training to its bloggers concerning the need to ensure that statements they make are truthful and substantiated. The advertiser should also monitor bloggers who are being paid to promote its products and take steps necessary to halt the continued publication of deceptive representations when they are discovered.”
Number two: Disclosure of receipt of free product
“Example 7: A college student who has earned a reputation as a video game expert maintains a personal weblog or “blog” where he posts entries about his gaming experiences. Readers of his blog frequently seek his opinions about video game hardware and software. As it has done in the past, the manufacturer of a newly released video game system sends the student a free copy of the system and asks him to write about it on his blog. He tests the new gaming system and writes a favorable review. The readers of his blog are unlikely to expect that he has received the video game system free of charge in exchange for his review of the product, and given the value of the video game system, this fact would likely materially affect the credibility they attach to his endorsement. Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge.”
Number three: Anti-astroturfing. Requires disclosure of material interest when making an endorsement.
“Example 8: An online message board designated for discussions of new music download technology is frequented by MP3 player enthusiasts. They exchange information about new products, utilities, and the functionality of numerous playback devices. Unbeknownst to the message board community, an employee of a leading playback device manufacturer has been posting messages on the discussion board promoting the manufacturer’s product. Knowledge of this poster’s employment likely would affect the weight or credibility of her endorsement. Therefore, the poster should clearly and conspicuously disclose her relationship to the manufacturer to members and readers of the message board.”
Sponsored Posts/Blogs
There are a few flavors of sponsorship. The company might pay the the blogger directly for a post or as an advertising sponsor of the blog, it might pay a blog network like BlogHer for access to its members or it might work with a sponsored post company like Izea.
In the first case, when the company works directly with a blogger, for example by sponsoring a specific post or even the blog as an advertising sponsor, the relationship should be governed by an advertising contract that outlines the responsibilities of the parties, and the nature of the relationship clearly disclosed on the blog. This is just smart business for both sides.
If, however, the company is not working directly with the blogger and instead is working through an intermediary, described in the FTC doc as a blog advertising service, the company needs to perform an additional level of due diligence. It needs to be sure that the advertising service is providing guidance and training to its bloggers, and if free product or services are provided, requiring disclosure of the commercial relationship.
Note that there is no requirement that the blogger be receiving a payment. Or even free product. If a company uses a blog network to reach out, is paying the blog network for the access to its members, that seems to be sufficient for liability for false statements.
What kind of policy should you look for in a blog advertising network or sponsored post firm? A good example is BlogHer. It has done a nice job navigating this minefield. The blog network you use may not have exactly the same policies, which is fine, but you want it to have at least paid as much attention to its own policy. To understand and be sensitive to the impact on both the blogging community and the advertiser.
Is there an issue if you are working with a consultant or agency to reach out to bloggers on your behalf, but who has not promoted a blog network as a product? In this case, the vendor would be building an outreach list based on your criteria and probably its relationships, but it isn’t advertising a blog network service. I do not think the same liability exists, but usual disclaimer. Not a lawyer, don’t play one on the WWW.
{added 5/21 7:50 am}
After sleeping on it, I realized the above paragraph wasn’t clear. I don’t want to read too much into the examples, so be aware that this next thought is my interpretation, not a direct example from the FTC document.
It is the payment to the blog network combined with the explicit agreement that the bloggers will write that creates commercial speech, ie advertising. When blogger outreach is handled more like public relations, as it would be by a PR agency or an independent consultant like me, there is no agreement that the bloggers will write. Our job is to present a relevant story to a group of bloggers that we expect will be interested. If they write, it is editorial.
If free product is provided to them, the same disclosure provisions would apply. In both cases, whether there is agreement to write or not, best practice is to provide as much information as the blogger needs/requests, but no direction as to post tone, content or timing.
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Free product considerations
Many blogger relations programs include something for free. A product. A trip. Products to giveaway on the blog. While the FTC example doesn’t require you, the company, to do anything, I recommend that you act as though it does, and advise bloggers of the need to disclose.
Should you stop offering review product or developing blogger events? Absolutely not. Even with these new guidelines, honest customer experiences of your products and services are a great way to reach other customers. We all just need to understand that it is a new form of advertising and act accordingly.
A word about contracts. The temptation will be strong, particularly in your legal department, to pass as much liability onto the blogger as you can. My advice is to be reasonable. If the value of the goods received, either for loan or free, is high, you probably need a contract that spells out the responsibilities of the parties. But, if you try to pass on all the responsibility to the bloggers, be prepared for them to walk away. And if you’re just sending the blogger a few DVDs or product samples to try and perhaps give away on her blog, be realistic. A contract?
A form of astroturfing specifically prohibited
The astroturfing example warmed my cold cynical heart. Far too many companies and agencies have engaged in the practice of leaving positive comments on blog posts and forums without disclosing their interest in the product or service being discussed. This is an abhorrent, unethical practice. If the example above makes it into the final guidelines, this will be considered deceptive advertising subject to FTC enforcement. AMEN.
Better practice by far is to participate but disclose your interest. In most cases, you’ll be better off communicating with the site or forum owner first, privately, before jumping into a forum, community or ongoing blog discussion, but some will already have threads for vendor discussion. Once you’ve established a relationship with the community, you may even become a resource for it. Isn’t that what we really want? Robust relationships with our customers and influencers.
What’s the bottom line?
The potential new FTC guidelines change the playing field for social media outreach, but only slightly, and really, well within what we should be doing as ethical practice anyway.
The FTC’s job is to protect consumers from deceptive advertising. One of the ways it does this is to make sure that commercial speech — paid advertising in all its forms — is clearly marked as such. While it may make our jobs as marketers and bloggers a bit more complex, as consumers, we should be glad that we have this watchdog on our side.
Phoenix Advertising Agency says
interesting stuff