Is the government coming for you?

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hiring.jpgDM CONFIDENTIAL — Given the marketing tactics that currently drive so much of the volume in the performance marketing space, articles headlining with “FTC Looks to Regulate Blogger Credibility” or “FTC Change in Endorsement and Testimonial Policy” should make any in our space’s heart palpitate a little faster and sit up straighter.

The FTC Guides Concerning Use of Endorsement and Testimonials in Advertising is not new. Much of the document dates to the first publication of it in 1975 with a revision in the 1980’s to create the standards by which marketers, particularly television commercials could use endorsements and testimonials. And, while television still plays a large role in marketing, the Internet’s influence has reached a critical mass, i.e. the FTC has received a large enough pool of complaints regarding certain practices that they feel it necessary to dictate allowable behavior.

In this case, the format in question revolves around blogs and bloggers. That the FTC might look to regulate bloggers in a revision to their guidelines is also not new, with mentions beginning in November 2008 with proposed changes being published and picking up again at the very end of April 2009 and throughout May. The topic has gained momentum in the past few days because of a recent AP article that was revisited on Cnet.

The AP article begins, “Savvy consumers often go online for independent consumer reviews of products and services…” “to help them find a gem or shun a lemon. What some fail to realize, though, is that such reviews can be tainted: Many bloggers have accepted perks…” and “Bloggers vary in how they disclose such freebies, if they do so at all.” It’s important because it would be the first time that FTC has proposed any sort of rules for bloggers specifically.

For the individual blogger this can sound scary. A classic example comes from an ex-coworker who started a beauty blog, and as it started to gain a little bit of a following, she started receiving not just requests to cover a product but incentives for a review, the implication being that she would write positively. Such one offs aren’t unusual. Entire companies even exist to help advertisers receive coverage from bloggers. PayPerPost for example has created an entire marketplace whereby companies can find bloggers who will write about their products or services with the advertiser having final approval of whether they will pay for a particular post.

Intellectually, this is an interesting and important topic. As mentioned in one of the articles, “If you walk into a department store, you know the (sales) clerk is a clerk,” said Rich Cleland, assistant director in the FTC’s division of advertising practices. “Online, if you think that somebody is providing you with independent advice and … they have an economic motive for what they’re saying, that’s information a consumer should know.” And unlike more traditional media where those reporting are held accountable for what they say (the exception being Fox News), in the solo journalism world of blogging, no such code of ethics and enforcement exists. Yet, as we see day in and day out, people believe bloggers.

The ones most worried about the changes are not surprisingly the people who rely on the incremental the most, the stereotyped single mother who earns $1000 per month through blogging, now concerned that she might make an accidental mistake to get her in trouble. It makes for an emotionally charged example in theory suggesting caution in adding the oversight but doesn’t represent reality. The FTC is not the music industry, willing to sue an individual for $20,000 per song for downloading and sharing 20 songs. Things start to get screwy, though, if bloggers can’t link to books, movies, etc. using affiliate programs. As to the specific changes, they haven’t been finalized but should be later this year.

It’s hard to say what changes will be made to existing language but clearly much effort focuses less on the medium, i.e., that it now would include enforcement over blogs, and more on the nature of testimonials and endorsements – what can be said, what can’t, and what disclosures are necessary. Two recurring themes emerge, one summarized by this statement on the November 2008 document, “Businesses are entitled to compete based on truthful, nonmisleading advertising claims, but they are not entitled to use techniques that mislead consumers.”

The second theme will sound more than familiar to those who went through the changes in ringtone marketing – the use of “clearly and conspicuosly,” e.g., “the advertisement should clearly and conspicuously disclose either what the generally expected performance would be in the depicted circumstances or the limited applicability of the endorser’s experience to what consumers may generally expect to achieve.” The challenge has been and will be what is “clearly and conspicuously,” but a litmus test could be – if you’re trying to deceive, Then that’s a problem.

Not everyone will agree, but more than not do seem to think that FTC generally strikes an appropriate balance between “protecting consumers and allowing advertisers to communicate creatively and effectively to potential customers.” (When they raid your office without warning, seizing property, that’s another story.) When the new guidelines come out, it seems that the biggest change is that those using testimonials and endorsements, in the case of weight loss, will need to know not only what you can lose (the testimonial/endorsement) but what the average person would expect to lose.

Reading between the lines, what we think we see is an emphasis on areas that have truly quantifiable results, such as weight loss. You can measure pounds, but you can’t measure wrinkles. So, we’re likely to see a crackdown on weight loss and a shift in marketing towards those where no such scale exists. Who really wins, though? Your lawyer. You’ll need one now more than ever to comply.

For an indepth look at the new Guides with commentary, see:
http://blog.seorevolution.com/2009/05/30/ftc-change-in-endorsements-and-testimonials-policy/

 Courtesy of DM Confidential editor

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