Blogging

Impact of potential new FTC endorsement guidelines on companies

May 20, 2009 by Susan Getgood

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.

{end insertion}

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.

The FTC is NOT gunning for mom bloggers

May 19, 2009 by Susan Getgood

Articles in the mainstream press, like this one today in BusinessWeek, give the impression that somehow the Federal Trade Commission is targeting mom bloggers for “enforcement.” Poppycock.

The FTC is doing a review of its guidelines on endorsements and testimonials. That’s part of its job — to protect the consumer from deceptive advertising practices. In 2007, it published notice of its intent to review these guidelines and solicited comments. Last year, it published this document, soliciting additional comments, which were accepted until earlier this year.

In the process, new media got added to the mix because word of mouth marketing, whether done by guerrilla marketing agencies or bloggers, is a new form of endorsement.

The question then becomes is it a commercial endorsement or not. If commercial — if it qualifies as advertising — then the guidelines may apply.

Why is this an issue for mom bloggers?

Not because the FTC is targeting them. It is not. However, consumer products companies are, big time. Bloggers are being asked to endorse products in a variety of ways, from sponsored posts to free product to big events and trips. So, what is the real impact of the possible changes to the guidelines?

A long time ago, when I wasn’t much older than my son is now, I thought I wanted to be a lawyer. Which may explain why I still get off on reading 86 page policy documents from the FTC. The good news is, I do, so you don’t have to. Today, I reviewed the FTC call for comments on the guidelines, the most recent public document we have. Here’s the scoop.

The bulk of the 86 page document focuses on deceptive use of testimonials in advertising, largely for weight loss, baldness and other pharmaceutical (and quasi pharmaceutical) products. Disclosure of the relationship among the parties and substantiation of claims are the main themes.

There are only three examples related to blogs. The citations are the direct quotes from the document; headlines and emphasis mine.

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.”

So what’s the big deal? Doesn’t this all make sense?

It will come as no surprise to readers of this blog, but apparently to some: businesses do not always act in the best interests of consumers. Sometimes they even lie. That’s why we’re in a recession.

The FTC protects us from deceptive practices in advertising, and extending the policies to social media that qualifies as commercial speech makes sense. If you are a blogger, that may include some of your writing. But please don’t over-react. The FTC is not interested in honest reviews of products by bloggers.

It is interested in protecting the consumer. Us.

What should bloggers do?

Well the document I read today merely outlines the direction the FTC was taking. The final guidelines could be slightly or even very different. Nevertheless, I’ll stand by my original post on this topic (Bloggers liable for statements about products? Maybe says FTC ) and say that the key issues will be compensation and disclosure. To what extent is the blogger a proxy for the advertiser?

In that context, here’s my advice. Keep in mind: I am not a lawyer and I do not play one on the Internet.

1. Whether you write paid posts, go on paid trips or take free products for review, or not, review your blog disclosure policies. Are you clear about your interests and affiliations?

I have three blogs, and each has a slightly different policy. Marketing Roadmaps accepts no advertising whatsoever. Snapshot Chronicles, my personal blog, runs BlogHer ads and is an Amazon affiliate. Snapshot Chronicles Roadtrip, my new family travel blog, accepts review product and advertising with the policies clearly spelled out.

For reference, here’s the general policy for the Snapshot Chronicles.com domain and for the Getgood.com domain that hosts the Marketing Roadmaps blog. Every blog I build for a client has a similar policy. Every one.

If you feel better having a lawyer review your policy, go for it. Especially if you are making money from your blogging or you are in partnership with other bloggers. It’s your business. Protect it.

2. If you accept compensation for a blog post, disclose the payment. If the post was written as part of a blog network, even if you are not compensated directly but the network is, disclose. When in doubt, disclose.

3. If you accept free product, whether or not there is an explicit agreement for a review, if you do the review, disclose. Also, as Erin Queen of Spain pointed out on Twitter today, don’t forget your tax liability for free products. Personally I think it far more likely that the IRS will come knocking than the FTC. Cover yourself.

4. Be careful about claims you make about the products. In the skincare lotion example, there’s a big difference between saying “This cream cures eczema” (Wrong) and “This cream really helped my eczema.” (Specific, probably acceptable). In advertising, commercial speech, general claims must be substantiated.

5. It would be nice, wouldn’t it, if the FTC would say something like free product over $x dollars is subject to the guidelines, but under, it is not. Abandon that hope. It won’t happen. Absolute numbers are a policy mistake, and one that I do not see the FTC making in this case.

Use your common sense. If you take a book or DVD or baby sling to review, something you might purchase anyway, the FTC probably isn’t going to spend any time worrying about deception in your review. Sorry.

A new car? A free trip? A suite of brand-new appliances? Uh. Yes. These are levels of compensation that may get some scrutiny. Should that prevent you from participating in a blogger program? Absolutely not. Assuming everything about the program is kosher, that would be stupid. The FTC is focused on deceptive practices, not honest reviews.

Stay on the side of the angels. You’ll be fine.

This post has focused on the blogger side of the blogger relations equation. In the next few days, I’ll share some thoughts on how the proposed changes might impact what companies and agencies do.

Just what is blogger relations anyway?

May 11, 2009 by Susan Getgood

(Warning- long post)

Call it blogger relations or blogger outreach or social media outreach. Whatever we call it, the shorthand version is that it involves engaging with bloggers, with programs and promotions that they will wish to share with their readers.

I’ve been writing about blogger relations on Marketing Roadmaps for quite a while now, and in my opinion, we are in the midst of a fairly important change. Some for the better. Some not so much.

The best way I can find to summarize it is: the more things change, the more they become the same.

Big brands embracing bloggers in a BIG way

Consumer and technology brands have been dabbling in social media for a couple years, but lately it seems like there’s a new BIG campaign aimed at bloggers every week, if not every day. Consider the mom blogging segment. In the last month alone we’ve had Hanes ComfortCrew trip to Disney, Let’s Fix Dinner from Stouffers, a Disney-sponsored mom blogger weekend at DisneyWorld, HP’s NY meet-up with Dara Torres and just last week, the launch of Frigidaire’s Motherload promotion.

Now, big blogger events are nothing new, but the sheer volume of them is. Is it still possible, given such volume, for firms to build real relationships with the influential bloggers in their space through these big promotions?

Or, good as these promotions are — and some of them are superb, with excellent micro-sites and contests, has the product of the outreach, i.e. the blog posts, simply become a new form of advertising?

We don’t dislike advertising. We dislike bad advertising.

Advertising is both useful and necessary. It lets companies offer their products for our consideration in a controlled fashion, to which we supplement trial, word-of-mouth, reviews, blogs and whatever else we use to make a purchase decision.

These big budget blogger events are creating a new form of advertising, similar to sponsored posts in many, but not all, respects.

Let’s distinguish big budget outreach from sponsored posts. In a sponsored post, there is an explicit agreement that the blogger will write something about the product or service but (generally) there’s no direction given about the content of the post. Compensation is paid, to either the blogger directly or a blog network.

In big budget outreach, there is no explicit agreement about posting, although there may be a contract outlining responsibilities of the parties if goods of significant value change hands. No cash compensation is paid.

I do believe, however, that the company and the blogger have an implicit understanding that the blogger will write about the event, and the higher the value of the goods/services, the more certain that is. Assuming the experience is a good one, to not write would set up a highly dissonant state for the blogger. He or she would have taken something of value from the company and not returned the favor.

In fact, it’s a pretty safe bet that the blogger will write; it’s up to the company to provide a good experience that leads to a positive post. So far so good. We’re still in the realm of opinion. Here’s how it drifts into a new form of advertising.

Most big budget blog promotions include the mainstays of traditional advertising – branded badges for the blogs, slick microsites, sweepstakes, etc. Odds are damn good the bloggers will use, link to or tweet about them. As a result, the blogger’s opinion is bracketed by the company’s advertising.

Walks like a duck, quacks like a duck? It’s a duck.

In the midst of all this, the FTC is revising its guidelines on endorsements and testimonials, with the distinct possibility that new guidelines due this summer will hold bloggers, and companies, liable for false statements on blogs.

Disclaimers and ethical transparency certainly go a long way to protecting both the company and the blogger, but in the end, if it looks like advertising or reads like advertising, the FTC is going to call it advertising, regardless of what we might label it ourselves.

As I’ve said before, I believe the key issues will be compensation, whether cash or product, and the amount of direction given to the blogger. To what degree is the blogger acting as a representative of or proxy for the firm?

I would not be surprised to see an either-or-both situation. In other words, even if there is little or no direction given to the blogger about what or when to write, if the value of the goods or services received is significant, the FTC may impose the advertising guidelines. Ditto for paid and sponsored posts, even if the pay is shit.

Signal:Noise – Too much static

You can’t stop the signal, but it is getting harder and harder to pick it up. It’s just too much when every other tweet in the stream seems like an ad, whether for a commercial or “personal” brand.

I think we are edging ever closer to a backlash against commercialism in the blogosphere. We — the collective we — rebelled against mass market command and control advertising by turning to social networks and blogs, yet now we are inundated again. How many posts do we really want to read about Brand X’s big party or Brand Y’s new influencer program before it all starts to blur? Before we stop reading or caring?

Before blogger relations jumps the shark?

It’s a shame. Somewhere in this ever escalating blogger outreach, it seems we’ve lost the element that made the whole thing so appealing, effective and efficient in the first place — the ability to have an honest conversation with your customer about the things, including your products, that both company and customer care about. Instead of relationship and reach, it’s become ALL about reach.

Don’t misunderstand. I don’t have a problem with “blogvertising.”

Some of these recent big budget campaigns are superb examples of how to authentically use new media to reach out to your customers through your customers.

And some will suck, because this new form of advertising isn’t going to be any different than the old. Some good promos. Some not so good. Some excellent writers who write creative and unique posts about the products. And some hacks who repurpose boilerplate and press release content wholesale.

I just hope people don’t get the idea that a big program or sponsored posts are the only game in town. The only way to reach your customers through blogs and other social media. Here’s why.

How do you get them back on the farm once they’ve seen Paris?

Big programs aren’t sustainable. No matter how successful. What happens when the next Frigidaire program doesn’t give away appliances? Or Hanes can’t allocate budget for a getaway for the next group of influencers? Big programs are setting expectations that are impossible for smaller companies to meet, and not even terribly realistic as a long term play for the big consumer brands. Heaven forbid if the big program is a flop. That company won’t be doing any reaching out any time soon.

More importantly, these big programs seem very transactional — here’s the offer, do you want to play? The relationship component of blogger relations, which is sustainable, seems far less important.

Big companies with big brand budgets can do BIG programs. Smaller companies can’t.

For example, the Frigidaire program. Just guessing, but I’d be willing to bet they took a piece of the advertising budget associated with the product launch, and moved it into the blogger program. Sure, it’s a lot of money to give away appliances to bloggers, but in the context of a display ad in Good Housekeeping or a tv commercial during Oprah? Not so much.

Smaller companies don’t have that luxury. They have to be more creative, more clever with smaller budgets, but generally the same scrutiny and expectations of success. They can’t do the extravaganza. They can reach out to establish relationships with influencers, but if no one can hear them for the din around the big campaigns, I fear they will get discouraged and miss the opportunity for engagement.

Worse, they’ll be tempted by the seemingly simple route of spamming bloggers with press releases. Because that’s what we all need right? More crappy pitches in our in-boxes.

What’s the solution?

I’m not suggesting that the big brands stop doing BIG programs with bloggers. There’s huge opportunity on both sides in these programs. I am however hoping that companies of all sizes think strategically about the long term relationships with their online customers when they build their blogger relations programs. Don’t just have big launches and big parties. Engage with your customers in small ways as well.

For example, say you are an appliance manufacturer; in your monitoring, you learn of a blogger who just got laid off and then the microwave exploded. Send a new microwave. It’s not part of a big splashy campaign, but I guarantee that simple act will go just as viral, and contribute just as much to your brand, as the big splashy campaign.

Don’t limit your generosity to just the top bloggers in your space. By all means include them in your programs, but keep in mind that a blogger with fewer readers might be much more engaged in your offer or brand, and in fact, do more for you than the one with thousands of readers. As the saying goes, be nice to everyone on your way up because you never know who you’ll meet on the way down.

Going a bit zen on you, it’s the difference between dropping a big rock in the pond and skimming a pebble across the top. The big splash may be satisfying in the moment, but the small ripples fan out longer and further. Be a pebble.

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Additional reading:

PR Newswire Blogger Outreach Webinar

May 6, 2009 by Susan Getgood

I was doing a little housekeeping and realized I never posted the link to the replay of the blogger relations webinar I did for PR Newswire last month.

Want one of your very own? I’ve developed 1/2 day workshops of my content in both intro and “beyond 101” versions.

Intro covers the basics of blogger relations with an emphasis on measurement. Beyond 101 covers how to find the shared values with your customers and influencers, and is most effective when we are able to use your examples or projects as a starting point.

I’d love to do it for your company or agency. Call me – 978 562 5979.