Companies’ obligations under FTC endorsement guidelines

As I noted in last week’s post, companies using social media marketing tactics have an equal, if not greater obligation, than bloggers under the revised FTC guidelines. It just hasn’t gotten as much media coverage. In part because the story isn’t as  provocative as “Bloggers are Shills! Big fines!” and in part because it’s not news. The advertiser has ALWAYS had liability under the deceptive advertising statues.

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.

What does this mean in practical terms?

Companies must revise their social media policies to require employees to identify themselves as interested parties when posting or commenting about the company and its products. This does not preclude the ability to post anonymously. It’s not the employee’s name that’s important. It’s the fact of employment. What you are — an employee — is more important than who you are — your name. The same requirement applies to agencies acting on the company’s behalf. If you work for Brand X’s PR firm and leave a comment on a review site, you’d better identify yourself. Companies also must train all employees about the disclosure requirements and their responsibilities.

Companies engaged in blogger outreach and word of mouth marketing programs must inform participants about the obligation to disclose. In my opinion, this advice must be specific to the program, not a generic statement about the need to disclose.

Updated to add: I think affiliate marketers are obliged to provide disclosure guidance to their affiliates, and expect responsible affiliate programs will be making changes to their agreements to reflect both the disclosure requirement and the affiliate’s (the blogger’s) responsibility. Assuming, as I do, that affiliate marketing will be under the FTC’s microscope, I would not be surprised to see non-compliance as grounds for removal from the program.

The company’s monitoring program must be fine-tuned to look for the proper disclosures as well as the mention of the brand. Processes must be developed to surface and correct inaccuracies and other misleading statements, including,  I imagine, missing disclosure statements.

And, of course, all of this must be carefully documented should it be needed as a defense in an enforcement action. You can’t just say you did it. You have to be able to prove it.