Features

The FTC steps into the social media fray – so what do we do now?

Written on
May 25, 2009 
Author
Richard Jalichandra  |

blogs_small.jpgADOTAS — It seems we in the ad industry are not the only ones noticing the increase in paid blogging (and here’s an example that makes us all cringe).

By now, we’ve all seen the FTC’s proposed updated set of guidelines for testimonials and endorsements. There won’t be a decision until this summer but, to put it simply, marketers and the bloggers will soon be liable for what the FTC calls misleading claims. The FTC may even ask those who continue to engage deceptive practices to compensate consumers. Is this really needed? Maybe, maybe not.

However, given the current financial industry disaster, this is not an administration that’s in the mood to trust businesses to self-police. (See: U.S. Signals More Scrutiny of Mergers, Antitrust.) Consumers have taken a beating this year, and the administration will likely be more proactive than those past in doing what they feel will protect the consumer.

Admittedly, much of this is a grey area, and may be challenging to enforce. Consider: products are featured in print magazines all the time. Where do the magazines get them? From the companies’ PR people. The bloggers we talk to resent the implication that they are swayed by products, while their print counterparts are not. Frankly, it’s ridiculously subjective to even consider a distinction. At what point does successful PR stop and endorsement start?

This could go two ways.

The good:

A clear, consistent, across the board distinction between sponsored content and advertorial, and opinion and product reviews. Consumers have a higher level of trust in the blog content they consume. Bloggers and consumers frustrated by paid posts masquerading as content welcome the changes.

The bad:

The regulations create fear among bloggers to review products – at all — and fear among marketers to move in to the blogosphere. If you are a small company or a blogging team of one, will a run-in with the FTC drain all of your resources? Worse, will bad acting companies lose the checks and balances of having bloggers call out the bad actors?

Moving forward:

We’re working with brands every day on advertising campaigns across the Technorati Media network – and on blogger outreach programs. Here’s what we’re telling them.

For bloggers:

Tell your readers exactly what it is that they are reading. The majority of high authority blogs are clearly marking paid content as sponsored. For editorial, or for what you could call product placement: what is the relationship? Did the company lend you the product or give you the product? Are you working with them in other ways, such as a freelance copywriter? You’ll need to make all of this very clear. This is obviously more important when the product in question is a laptop or digital camera than when it is a bottle of detergent.

For marketers:

Provide bloggers with full and accurate product information. Encourage bloggers to disclose their relationship with you. Then, follow up to make sure they got everything right. Also important: don’t balk at labeling paid content as such. The important thing is that your message is being seen in an environment of high engagement and credibility. Your brand, and the bloggers you are working with, will have more credibility the more transparent you are.

Let’s say you make your best effort, but something incorrect is posted. How do you follow up in the long tail of the blogosphere? The good news is, from what we see on Technorati, these aren’t the posts that go viral. Linking is arguably the truest measure of a blog’s influence, and more importantly, in a world without filters or controls, linking is the control. If a blogger publishes information that is unprofessional, untrue, or a blatant (unlabeled) promotion other bloggers don’t link to it. Unless of course there is a negative backlash where, most times, it’s other blogs that are doing the calling out.

Here’s an example: we worked with Sony to distribute digital cameras to bloggers attending the South by Southwest conference. The bloggers were encouraged to use the camera to upload video and photos from the event to their blogs. It was made very clear that there were no strings attached: bloggers were not required to post a product review or to post positive mentions of the camera.

They did anyway: One of our bloggers said “this camera made me a rockstar at SxSW! People came up to me to talk about it”. Another blogger said “people had heard about the program from Technorati and eagerly wanted to see the camera. They couldn’t believe how small it was, HD capable, and costs less that $200.”

The guidelines may be tough to wade through, and tough to enforce, but the actions for bloggers and marketers are simple. The qualities marketers need to embrace to succeed under the FTC’s new guidelines are inherent to the blogosphere: transparency and trust.

– Express your opinion, comment below.





Richard is the CEO of Technorati. Under his guidance, the company acquired BlogCritics.org and the AdEngage self serve advertising platform and launched Technorati Media, which now reaches an audience of more than 96 million.

Prior to Technorati, he worked as an M&A and strategy consultant for several Internet properties and investment firms, and also served as SVP of Corporate Development for Exponential Interactive, Tribal Fusion’s parent company.

Previously, he was SVP of Business Development for Fox Interactive Media, and was the Vice President of Business & Corporate Development at IGN Entertainment (acquired by Fox Interactive), where he led the company’s M&A, business development and international activities.

Before joining IGN, Richard led national accounts sales at Lycos, was Vice President of Business Development at Neopost Online, served as Senior Vice President/Managing Director of Answerthink, and founded K23 Creative Services in Singapore.

His early career included management roles for Ford, IBM and Siemens.

You can find Richard at www.jalichandra.com and twitter:@jalichandra.

Reader Comments.

Interesting – I suppose we should expect more and more regulations in our Web 2.0 world.

Regarding the good and the bad – it seems across the board, the outcome stems as much from the purpose of the regulation as much as it does the actual regulation itself. By this, I mean the underlying reasons behind WHY the regulation is being put in place drive the good and bad implications as much as the regulation produces on its own.

Let’s not just hope, let’s push the regulators toward sound business decisions as the government begins its foray deep into this space, in earnest.

Posted by kevinmhuff | 3:01 pm on May 19, 2009.

If the government was a business it would be Bankrupt, just think about that any time you support government intervention. There is already regulation in this area, it is called the judicial system. If someone makes a claim that is untrue it should be handled through the courts.

Posted by surething | 11:53 am on May 20, 2009.

Thanks on the good info.

Posted by John | 11:17 am on December 8, 2010.

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