Once More, with Feeling: FTC guidelines, bloggers and companies

Every time I post about the FTC’s guidelines for endorsements and testimonials, I hope that, this time, the misinterpretations and disinformation will stop. So far, I remain disappointed, but ever optimistic, here I go. Once More, with Feeling.

Last week, Blog with Integrity hosted a webinar featuring Mary Engle from the FTC’s Bureau of Consumer Protection. We had the opportunity to ask Mary a number of questions about the guidelines. Here are  some highlights of the conversation:

• The FTC does not intend to pursue individual bloggers. Its focus is on the companies and advertisers who are engaging with word of mouth marketing in ALL its forms, not just blogs. This includes Twitter, Facebook, review sites and word of mouth programs that use street teams.
• The FTC wants the companies to provide guidance to the people working with them on word of mouth marketing programs.
• The guidelines do not carry penalties or fines.
• The guidelines affect all bloggers who directly participate in marketing programs, not just mom bloggers as has often been portrayed in the media.
• Disclosure statements need to be clear and prominent. A blanket statement might be okay, depending on the circumstances, but it shouldn’t be at the bottom of the page, as the reader might not get that far.
• If a blog operates like a magazine — with clear editorial guidelines, editors, assignments, etc., the FTC likely will treat it the same way as a mainstream media magazine.
• The contents of swag bags at conferences, distributed to all attendees, are more like the example in the guidelines in which the blogger received a grocery coupon for a free bag of dog food. Recipients aren’t selected individually and personally, so there is no relationship to disclose.
• The FTC cannot provide specific guidance as that might compromise ongoing investigations.
• The consumer’s understanding of the commercial message is the crux of the matter.  Mary’s final slide stated: “Does the reader/audience understand the relationship between the reviewer and the company whose products are being reviewed?” If not, disclose.
• The FTC will continue to add resources to its website to help consumers and companies understand the guidelines, and questions can be emailed to endorsements@ftc.gov

Bloggers and journalists

We didn’t reach as much clarity about bloggers being held to a different standard than journalists.  Mary tried to explain the FTC’s position, but from the questions both during and after the session,  folks are still reacting to this as a statement about an ethical difference between a blogger and a journalist. It’s not. It’s about the consumer’s understanding of the different channels. Here’s the text:

The Commission acknowledges that bloggers may be subject to different disclosure requirements than reviewers in traditional media. In general, under usual circumstances, the Commission does not consider reviews published in traditional media (i.e., where a newspaper, magazine, or television or radio station with independent editorial responsibility assigns an employee to review various products or services as part of his or her official duties, and then publishes those reviews) to be sponsored advertising messages. Accordingly, such reviews are not “endorsements” within the meaning of the Guides.  Under these circumstances, the Commission believes, knowing whether the media entity that published the review paid for the item in question would not affect the weight consumers give to the reviewer’s statements. Of course, this view could be different if the reviewer were receiving a benefit directly from the manufacturer (or its agent).

In contrast, if a blogger’s statement on his personal blog or elsewhere (e.g., the site of an online retailer of electronic products) qualifies as an “endorsement” – i.e., as a sponsored message – due to the blogger’s relationship with the advertiser or the value of the  merchandise he has received and has been asked to review by that advertiser, knowing these facts might affect the weight consumers give to his review. (page 47, Federal Register Notice)

I wrote about this at some length in an earlier post, and won’t repeat everything here, but I’d like to suggest that we stop worrying about the semantics of journalists versus bloggers, and instead turn our attention to the issue of form versus content. Discussing the issues in the context of mainstream media or blogs focuses on form. But forms are fluid. They change. We need to stay focused on content. Is it a commercial message? If so, and the commercial nature is not clear from the context,  it needs to be disclosed, regardless of form. An ad that looks like the front page of the New York Times is an ad, regardless of form. A website that offers editorial content mixed with advertisements is more like a magazine than a personal blog, even if it happens to be published using blogging software.

Was the FTC as clear as it could have been on this issue? No, but I am hopeful that its workshop in early December on the Future of Journalism will move it, and us, closer to a better understanding.

[11/17 – update on this issue below]

Affiliate marketing

Our discussion during the webinar also made it clear that we — consumers, bloggers, policymakers and regulators alike – need a much better understanding of affiliate marketing. Clearly, there is a commercial relationship between a seller and its affiliates, but there are many variations on the theme, and more than a few different types of affiliate ads, from entire websites that are nothing more than an advert to display ads on blogs to deep links within posts. There were many many questions about this both during and after the session. Understandably, bloggers want specific guidance from the FTC,  and that just isn’t going to happen. Blog with Integrity may do a webinar next year on affiliate marketing, and we would love your feedback on the idea.

Did you know – COMPANIES are liable under the guidelines too!

The FTC has been pretty clear where it thinks specific guidance should be coming from —  the advertisers. Companies also have specific disclosure and monitoring responsibilities. Unfortunately, that part of the guidelines hasn’t gotten nearly as much media attention as the blogger liability. Here are the specific examples, emphasis mine:

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 misleading or unsubstantiated representations made through the blogger’s endorsement. The blogger also is subject to liability for misleading or unsubstantiated 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.

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.

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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. Because his review is disseminated via a form of consumer-generated media in which his relationship to the advertiser is not inherently obvious, readers are unlikely to know 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 likely would 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. The manufacturer should advise him at the time it provides the gaming system that this connection should be disclosed, and it should have procedures in place to try to monitor his postings for compliance.

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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.

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Example 9: A young man signs up to be part of a “street team” program in which points are awarded each time a team member talks to his or her friends about a particular advertiser’s products. Team members can then exchange their points for prizes, such as concert tickets or electronics. These incentives would materially affect the weight or credibility of the team member’s endorsements. They should be clearly and conspicuously disclosed, and the advertiser should take steps to ensure that these disclosures are being provided.

In short, companies using word of mouth marketing and their agencies are required to:

• Disclose their relationships when posting, commenting or tweeting. Including reviewing products on websites. Let’s call this the anti-astroturfing provision;
• Provide guidance to people participating in their campaigns about their obligation to disclose;
• Monitor to ensure both compliance with the disclosure requirements and accuracy of information;
• Take steps to correct inaccurate or misleading information.

Are companies and agencies doing this? How about the big blog networks? If they aren’t doing it now, they’d better be by December 1, 2009, because that’s where we are likely to see the first enforcement actions. The FTC has said so more than once.

Bet that’ll get a little media attention.

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Some additional reading

Blogging Moms Wooed by Food Firms – My rambly two cents on the LA Times Article (Mom 101)
Using Bloggers as Means, Not Ends Unto Themselves (Jeremy Pepper)
Clarification and commentary on new FTC advertising and endorsement rules (The Practical Nomad)

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11/17 Update – We are forwarding post-webinar questions we get about the FTC guidelines to the endorsements@ftc.gov email address. I sent one this morning, and got an automated reply with five FAQs, including this one, which should clear up the blogger/journalist confusion:

3. “Aren’t you holding bloggers to a higher standard than people who review products for newspapers or on TV?” No, the Endorsement Guides apply across the board. The issue is – and always has been – does the audience understand the reviewer’s relationship to the company whose products are being reviewed? If yes, then a disclosure isn’t needed. If no, then a disclosure is needed. Here’s why that’s the case. For a review in a newspaper, on TV, or on a website with content similar to what you’d find in a publication or on TV, it’s usually clear to the audience that the reviewer didn’t pay for the product being reviewing. It’s their job to write reviews and no one expects that they paid for what they’re reviewing. But in other instances – for example, on a personal blog or social networking page – the reader wouldn’t expect the reviewer to have a relationship with the company whose products are mentioned or reviewed. Disclosure of that relationship helps the audience evaluate potential bias and avoid deception. That’s the long and short of what the Guides are all about. And, as usual, we’ll be focusing our enforcement efforts on the advertisers, not on individual endorsers.

Yup, that’s what I thought. Nice to hear it directly from the FTC.