Ethics

FTC Update: Operation Full Disclosure; Disclosing a compensated trip

October 1, 2014 by Susan Getgood

Last Thursday, the Federal Trade Commission issued a press release about its Operation “Full Disclosure.”

The most important thing for bloggers to know about Operation “Full Disclosure” is that it has NOTHING to do with sponsored posts on blogs. It was aimed squarely at national television and print advertisers that failed to make adequate disclosures in their ads. More than 60 companies received FTC warning letters, largely focusing on disclosures that were in fine print, easy to miss or hard to read.

The FTC Guidelines apply to ALL advertising claims and endorsements – traditional media, social media, even direct word-of-mouth. While its publications and hearings over the past few years have focused on defining and clarifying the guidelines’ impact on social and online media, the FTC clearly hasn’t lost sight of its mandate to protect the consumer from ALL misleading advertising.As the press release clearly summarizes:

“The FTC’s longstanding guidance to companies is that disclosures in their ads should be close to the claims to which they relate – not hidden or buried in unrelated details – and they should appear in a font that is easy to read and in a shade that stands out against the background. Disclosures for television ads should be on the screen long enough to be noticed, read, and understood, and other elements in the ads should not obscure or distract from the disclosures.

The staff letters advised advertisers that to meet the “clear and conspicuous” standard, their disclosures should use clear and unambiguous language and should stand out in the advertising – consumers should be able to notice disclosures easily; they should not have to look for them.”

The purpose of the FTC guidelines is to avoid consumer confusion about advertising messages. By making sure that advertising does not contain misleading statements or hide important facts or conditions, and that any interest, such as compensation or affiliation with a company, an endorser might have in a product she recommends be clearly disclosed.

Store these 3 principal FTC requirements permanently in a room in your mind palace:

Disclosure is required when you are compensated, and you endorse (write or speak about) the entity that compensated you. If you are not compensated, either in cash or goods, there is nothing to disclose.
Claims must be true and the source disclosed (my opinion, scientific research showed…, the company said….)
Disclosures should use clear unambiguous language that stands out and is positioned close to the claim or endorsement.

Speaking of confusion….

There seems to be some confusion in the blogosphere of late as to how the guidelines apply to compensated trips. Here’s my take.

If you are PAID to go on a trip, you must disclose whenever you endorse/write/speak about the entity that compensated you. Compensation can be cash, product or service. In your blog posts. In your tweets and Facebook posts. You write about the sponsor, you disclose you were sponsored.
If part of a compensated assignment includes a certain number of social shares about the experience but not necessarily about the sponsor, and you are asked to use a specific hashtag and/or link to a website for the sponsor, you must disclose. Including the hashtag or link is a promotional activity for which you were compensated.
If you want to tweet about the sunset, or say how tasty the orange juice was at venue that is NOT the sponsor, or whatever, you don’t need to disclose. You are not endorsing the sponsor, so you don’t need a hashtag or a disclosure. Where there is no compensation, no disclosure is required.
That said, if you write an unrelated blog post about elements of the trip that does not include the sponsor, you should still disclose that you were sponsored. Not because the FTC requires it, but because you should give your sponsor the love.
When in doubt err on the side of disclosure.

Here is an example, completely made up.

SuperChic Hotel sponsors you on a trip to the Mexican Riviera. They pay your airfare, comp your hotel, restaurant meals and rental car, and give you an allowance for sightseeing and incidentals. How should you disclose:

Any time you mention SuperChic Hotel, your readers should know you were sponsored. Blog posts, Twitter, Pinterest, Facebook, Instagram, videos. Whatever. Even if you were not specifically compensated for an activity, such as a pinning. Disclose.
Mention the airline, the car rental company, restaurants and boutiques not affiliated with SuperChic Hotel, sightseeing attractions? Unless SuperChic Hotel provided specific instructions on where to go/vendor to use, you do NOT need to disclose a compensated relationship with the vendors. Your relationship is with SuperChic, not with them. That said, as a best practice, I recommend you disclose that your overall trip was sponsored.
Want to tweet about the sand on the beach or the gorgeous sunset. Unless your sponsor is the beach, which is possible, or the sun, which is not, no disclosure required.

This scenario gets a little more complicated if the sponsor is the regional tourist authority, especially if it plans the details of your trip. In that case, I would make the call that anything in the region is supported by the tourist authority, and the relationship should be disclosed with every endorsement. Even the beauty of the beach.

What about a compensated speaking engagement that also pays your way — any or all of fee, comped registration, airfare, hotel? Your presence on the roster of the event is a clear notice of your affiliation with the event. Any reasonable consumer of the conference content understands that you have a relationship with the conference.

The amount of your compensation is not relevant. When it comes to FTC disclosure, it doesn’t matter if it is a liptstick or a Lamborghini; a free lipstick is the same as a car, comped airline ticket or $1000 fee. In my opinion, to double down on disclosure, if you decide to write a glowing post about the conference, or tweet props to the conference organizers, you should disclose your affiliation, but you don’t need to preface every tweet about the conference content with the hashtag #ad unless you were specifically compensated to promote the conference content.

A note about hashtags in social posts: Never use #spon. It is not at all clear. Use #ad or #hosted or #sponsor or #sponsored, and don’t bury the hashtag at the end of your social post. I prefer to see them in context if possible or at the very front of the post if not.

Examples:

Having a great time on trip to Mexico #sponsored by #SuperChic.
Rooms at #sponsor #SuperChic are gorgeous. Now off to the spa.
#ad Don’t miss the regional tasting menu at #SuperChic restaurant

Lastly, a word of advice. The FTC guidelines are pretty simple. Disclosure is required so the consumer of the advertising can put your endorsements in the proper context. It’s common sense — Wouldn’t you want to know if the writer of a glowing blog post about a product you intended to buy was compensated by the company? If it was someone you trusted, you’d still take the advice, but you would want the context of the compensation. The FTC provides guidelines and advice about proper disclosure, and will from time to time go on the record about what it considers inadequate disclosure (like #spon), but it doesn’t dictate a specific way to disclose. When you read articles or blog posts that report that there is a specific, correct way to disclose, take them with the grain of salt. What you are reading is someone’s interpretation of the guidelines cast as an absolute.

FTC Endorsement Guidelines Update: Disclosing a Sweeps or Contest Entry on Social Media

April 1, 2014 by Susan Getgood

Disclosure: Not a lawyer. Don’t play one on the Internet. But I’ve studied the FTC endorsement guidelines. A lot.

Yesterday news broke that the FTC had issued a warning to shoe manufacturer Cole Haan, notifying it that the disclosures used by consumers in its Wandering Sole contest on Pinterest were not sufficiently clear as to the potential material connection between contest entrants and the company. Said the letter (as quoted in MediaPost):

“We do not believe that the “#WanderingSole” hashtag adequately communicated the financial incentive — a material connection — between contestants and Cole Haan,” Mary Engle, FTC associate director for advertising practices, said in a letter sent to the retailer’s attorneys on March 20.

This represents an evolution in the FTC’s thinking with regard to disclosure of a sweepstakes or contest entry. In the early days, it did not explicitly require such a disclosure when a blogger mentioned a brand in a post to enter a sweeps or contest. In part, because there was no material relationship between the parties, so there was nothing to disclose. And, for the most part, back then (2010!), in text-based formats like blogs and Twitter, sweeps and contest entries were often disclosed as part of the entry instructions. Hence no confusion. [Facebook only allowed contest entries on pages recently.]

So what has changed? The endorsement guidelines are grounded in two basic concepts:

is there a material (compensated) relationship between the parties, and
is there a possibility of consumer confusion about the relationship?

In my opinion, the FTC’s thinking has evolved due to the prevalence of contest and sweepstakes entries, particularly on the highly visual Pinterest, that mimic organic endorsements, and do not have clear disclosure that they are a contest or sweepstakes entry. In other words, that the posting is motivated by a commercial incentive, not an organic interest in the product. Quite simply, all these sweeps and contests were causing too much consumer confusion.

The resolution is pretty simple, and follows the same simple guidelines that normal disclosure does. When possible, use natural language to disclose the relationship (Pinned for the Blah Blah Sweepstakes) and use clear hashtags (#sweepsentry) or @ addressing (@BlahSweepsEntry) to make it crystal clear. Using the hashtag or @ addressing is useful even if you also require a natural language disclosure as it makes it easier to track the entries. IMPORTANT: Make the proper disclosure part of the requirements to enter the sweeps or contest.

Shining a Light on the Native Advertising Debate

January 20, 2014 by Susan Getgood

Disclosure: I am Vice President, Influencer Marketing at BlogHer. Advertising and social media marketing programs are a significant source of revenue for my company and for the bloggers in our advertising network.

In December, the FTC held a workshop on Native Advertising, the practice of embedding/including advertising messages in editorial spaces. Prompted by concerns that publishers are not disclosing sufficient information to consumers, the workshop was mostly focused on native advertising on publishers’ sites and portals. Although there are some implications for sponsored content on independent blogs, there was nothing in this workshop that replaced or changes the endorsement guidelines updated in 2009.

The FTC regularly holds public workshops to discuss and document the points of view on a topic for which they might issue a regulation. Nothing really new comes to light, but the workshops are a good way to understand the current market thinking on a topic. How it works in a nutshell:

Participants file a public comment on the matter with the FTC in order to be “invited” to the workshop (and not all are given speaking slots).
During the workshop, the participants clarify and defend these previously established positions.
Often participating organizations time related press announcement to the workshop date to maximize the reach of their point of view. For example, the IAB released its Native Advertising Playbook on December 4th, the day of the workshop.
Following the workshop, the FTC may (or may not) eventually issue regulatory guidelines.

If you aren’t on the hot seat, FTC Workshops are excellent policy wonk theater. From the coverage, this one did not disappoint. Seen on Twitter, largely paraphrasing commentary by columnist Bob Garfield:

raju: “We are all trying to make money” Yes, but with a “boatload of shit.” Arguments fly in US @FTC hearing on #NativeAds bitly.com/1bid3ie

sulliview: “A conspiracy of deception. A hustle. A racket. A grift.” And other kind words for native advertising:adage.com/article/media/… h/t @raju

If you were looking for a conclusion or a ruling, though, you would definitely be disappointed at the outcome (to-date) of the workshop. As is often the case, FTC workshops end with everyone realizing just how a) far apart the various protagonists/antagonists are on the issues and b) how confusing the topic is, both organically and as manufactured by the protagonists and antagonists.

Among other issues, the different players in the online media industry are using the term “native advertising” to mean multiple, often disparate things. Many of which already existed in somewhat similar form, online and off. At best, this makes conclusions about concrete action difficult for the regulators. At worst, it makes it obvious that sometimes the lack of clarity is deliberately intended to confuse consumers about the paid nature of the content and implied endorsement. Online and offline, sometimes it is just hard tell where the editorial ends and the advertising begins. Blurred lines (the name of the FTC workshop) indeed, and certainly why the FTC intends to keep a sharp eye on native advertising in the coming year.

I’m watching the ongoing debate with some interest. In part because HULLO ethics policy wonk here! but also because these discussions about native advertising impact my work with brands and influencers at BlogHer. We’ve been doing sponsored content for years, both on BlogHer.com and on the blogs of our Advertising Network members, and have long been a proponent of clear and prominent disclosure of sponsored relationships, even before the revised FTC endorsement guidelines.

Sponsored posts are considered a form of native advertising. I’d argue that sponsored posts are the original native advertising, and many of the newer portal- and publisher- based forms are attempts to mimic the word-of-mouth potential of an authentic influencer endorsement. Other native ads are advertorials that blur the lines between the native editorial of a publisher — the magazine content — and advertising. For example, did the sponsor simply fund the space, and the article was written with the usual editorial objectivity of the publisher, or did the advertiser place the article fully written? Both types of post have their place in the content ecology, but sponsorship and in the case of my example, the level and degree of sponsorship, must be disclosed so consumers can make an informed decision.

On one side of this debate, we have the advertising and publishing industry that wants to expand the opportunities to reach consumers with marketing messages. And on the other, we have the watchdogs who are concerned that consumers aren’t getting adequate information upon which to base their decisions.

No one denies the need for disclosure. The sticking point seems to be what is an acceptable, meaningful disclosure.

We are arguing about the wrong thing. We are having a debate when we should be having a conversation. And not about the best way to disclose. Shaded boxes versus color cues, or whether we call something an ad, advertorial or sponsored, trap us in the minutiae of old media models.

One of the most interesting topics discussed during the workshop was a study conducted by the McCarthy Institute for IP and Technology Law. Among other things the study found that 50% of respondents did not know what sponsored advertising meant. The study also suggested that consumers don’t care that much. Reported website emedia|vitals:

One question looms even larger than how publishers label the native ads that run on their site: Do consumers care? One-third of respondents in the McCarthy Institute study said they are not concerned about the difference between ads and editorial and that they would actually be more likely to click on something they think is an ad.

“So the important baseline question is, what are we protecting the consumer from?” asked Franklyn [McCarthy Institute Director David Franklyn]. “A growing number of consumers enjoy the hyperstimulation of the work that advertisers and publishers do. They don’t care whether it’s paid or unpaid – they may just want to be entertained.”

Should consumers care? Does it matter? It seems that consumers aren’t nearly as fussed about whether a message is paid or unpaid as long as they can trust its credibility and the message is relevant and interesting. This shouldn’t surprise us — it is the foundation upon which social media, and social media marketing, is built. That said, it is extremely important to note that while the consumer may not care whether an endorsement is paid or not, it is still vital that she know whether it was paid or not. Without disclosure, there is no foundation for the trust upon which social media engagement relies.

Trust and Relevance.

Rather than get bogged down making advertising look like editorial because we think it increases its trust value if it looks “native,” let’s take a deep breath and realize that the consumer doesn’t care whether it is paid, owned or earned. Shareability is the new social currency.

I have written about this before so I am no less guilty of using the FTC workshop as a soapbox than any of the participants. But it bears repeating: Developing a story so good that consumers are driven to share is the real goal. It’s not an either/or — either you use paid media OR you use earned media OR you use owned media.The best marketing strategies rely on all three tactics.

Shared Media: Social’s New Currency
Source: BlogHer

And don’t shortchange disclosure in an attempt to make the message more appealing. It’s not necessary, and when you do so, you begin your relationship with your customer based on a lie. And really, that never works out well. In life or in business.

FTC .Com Disclosures Guidance: What’s new for bloggers and social media influencers

March 15, 2013 by Susan Getgood

Disclaimer: Still not a lawyer

Earlier this week, the FTC released an updated version of its .Com Disclosures guidance for digital advertising, originally published in 2000. While there is some new information here for bloggers and social media influencers who produce sponsored content for advertisers (and I will get into that below), the document’s principal goal is to provide guidance for proper disclosure of advertising claims in digital, and especially mobile, advertising in light of new technologies. Much like the changes in the endorsement guides in 2009 that were prompted, in part, by the rise of social media and blogs.

Simply put, the FTC is making sure that, as ad delivery technology changes, claims are properly disclosed and not “lost” in the translation from web to mobile displays.

From the social media perspective, most of the information related to accuracy of claims and disclosure of relationships is the same as is covered in the 2009 Guidance on Endorsements and Testimonials. In other words, there isn’t all that much new here. You still need to disclose material relationships with brands, in a clear and conspicuous manner proximate to your endorsement, and both you and the sponsor have an obligation to be accurate in your claims about a product. Read my detailed analysis of the examples in the 2009 guide if you want more detail.

Is there anything new here for bloggers? Why yes. It’s not a lot but it’s very nice. The .Com Disclosures document includes new examples that will make it easier for people creating sponsored content to comply with the FTC Guidelines, as well as clarity on the proper ways to disclose additional required information about product claims.

The examples:

Where and how to disclose. As far back as 2009, the FTC was already publicly recommending that disclosures not be buried at the bottom of a post or on a separate page (Once More With Feeling: FTC guidelines, bloggers and companies). Now, however, we have an explicit example.

Takeaway: Do not put your disclosure solely at the bottom of your post.

Recommendation: Include a brief disclosure at the top and if necessary, provide additional details at the bottom.

Note that the FTC also explicitly stated that the form of the disclosure should match the content. If it is a video or sound file, the disclosure should be done in the native format — ie in the video or recording, not simply included in a post or annotation on a social site. The disclosure needs to travel with the content.

However, the exact words you use to disclose? Still up to you.

How to disclose in short-form environments like Twitter. The FTC has always said that the disclosure must be proximate to the endorsement. While common sense would indicate that this means in every sponsored Tweet or Facebook post in which an endorsement appears (and that’s certainly how we handle it at BlogHer), that’s not what was happening on Twitter. Not by a long shot. So, the .Com disclosures have a series of terrific examples of the wrong and right ways to disclose on Twitter. Key points:

The disclosure must be in every Tweet. You can’t tweet a single disclosure that covers the whole conversation; there is no guarantee that readers will see the disclosing statement.
The hashtag #spon is not sufficiently clear.
The word “ad” is sufficiently clear, but needs to be in a prominent place. The FTC also suggests not using a #ad hashtag after a URL or shortlink as it could be overlooked.

Recommendation for a best practice:

Do include an “umbrella” tweet or post that explains the sponsored content you are about to tweet/post. It is good information for your followers, but as above, not sufficient in itself. For example: “So excited to be here as a guest of #BIGHOTEL at the Super Duper Event #ad”
Use #ad to disclose along with any hashtag the sponsor has requested, but NOT proximate to any URLs in your tweet/update. Make sure the disclosure stands out.

The .Com Disclosures also included one other tidbit that was clearly aimed at advertising disclosure of claims, but is valuable for bloggers as well. When an advertising claim merits a longer disclosure than is practical for the format, a hyperlink to additional information is acceptable, provided that anything material, or “triggering” is included in the original advertisement and the link is clear and conspicuous. In other words, you cannot bury CRITICAL disclosures in hyperlinked pages, but you can provide additional details.

“Hyperlinks allow additional information to be placed on a webpage entirely separate from the relevant claim. Hyperlinks can provide a useful means to access disclosures that are not integral to the triggering claim, provided certain conditions (discussed below) are met. Hyperlinked disclosures may be particularly useful if the disclosure is lengthy or if it needs to be repeated (because of multiple triggering claims, for example).

However, in many situations, hyperlinks are not necessary to convey disclosures. If a disclosure consists of a word or phrase that may be easily incorporated into the text, along with the claim, this placement increases the likelihood that consumers will see the disclosure and relate it to the relevant claim.

Disclosures that are an integral part of a claim or inseparable from it should not be communicated through a hyperlink. Instead, they should be placed on the same page and immediately next to the claim, and be sufficiently prominent so that the claim and the disclosure are read at the same time, without referring the consumer somewhere else to obtain this important information.” — from the .Com Disclosures Guide. Emphasis mine.

This could be extremely useful for sponsored programs for products and services in highly regulated industries. The sponsored post would still have to meet all the requirements for accuracy, with any critical product claims disclosed in the post, but bloggers wouldn’t have to include all the “fine print” in their posts.

So, some nice clarity for some critical areas. But nothing to get too worried about.

Unless you are creating deceptive mobile ads for weight loss products or jewelry!

Additional resources:

FTC FAQ on the Endorsement Guides (2010)

Eleven Urban Myths about the FTC Guidelines

Pinterest changes TOS, allows commercial use: What does this mean for you?

November 19, 2012 by Susan Getgood

Last Wednesday, Pinterest changed its Terms of Service (TOS) to allow commercial use.

Wait. What?

You mean commercial boards and sponsored pinning may have been in technical violation of Pinterest’s TOS all these months?

Yes indeedy. Given the importance of widespread commercial adoption of the service to its ultimate ability to monetize, it is highly unlikely that it would have cracked down on the commercial activity, but until last week, the TOS prohibited both commercial use and encouraging commercial use by others unless the activity was pre-approved by Pinterest.

So, what do you need to do if you are planning to use Pinterest for commercial purposes?

You must comply with the Pinterest Terms of Service and the FTC’s Guideline for Commercial Endorsements. Here’s how:

You need to have a business account and agree to the Business Terms of Service. If you already have an account, it is easy to convert it to a business account, and if you do not, you simply open it as a business account. Both can be done at business.pinterest.com. HubSpot did a nice tutorial with screen shots if you need a little guidance. Important: ANYONE using Pinterest for commercial purposes, even an individual, needs to have a business account to be in compliance with the Pinterest TOS. The pages don’t look any different but Pinterest has released some tools for the business accounts and has promised more, which is an incentive above and beyond the simple ethical consideration of complying with the TOS!
You need to develop your policy for proper disclosure of commercial activity on your Pinterest account to comply with FTC requirements for commercial endorsements. If you are a commercial brand and your account has a company name, your boards likely will be presumed to be commercial content, so you should be fine from a disclosure standpoint. However, if you are an individual, you must make sure that your affiliations are clear. I recommend:

As a best practice — put a clear statement in your bio about your affiliations.
To comply with the FTC, label any boards and pins related to commercial activity in the description. For example, “My Golfer’s Paradise board is brought to you by GOLF BRAND” on the pinboard description, and on the pins themselves, a sponsor statement such as “Sponsored by GOLF BRAND” or “Love this putter from GOLF BRAND. #sponsored.”

Next — and this part is optional, not a Pinterest or FTC requirement, but I personally recommend developing your own guidelines for your use of Pinterest to best leverage the platform and ensure consistency of your approach over time. Plan the work and work the plan!

If you represent a brand, you want the boards to fit the ethos of Pinterest, and help build awareness, interest, consideration and purchase. Don’t just slap up boards with pictures from your catalogs or details of the latest promotion. Think about how you can make your content valuable to the community so they will repin it and help you spread the word.

If you are an individual, you want your sponsored Pinterest content to be consistent with your non-sponsored personal pins. Your taste and interests are why people have followed your boards, and you don’t want to disappoint. Bottom line, if you have any sort of following, brands will be approaching you. Best to have your own strategy lined up so you know which opportunities are worthwhile, and which ones are not.

Ethics

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