Last October, the Federal Trade Commission published a guide on endorsements and testimonials. For bloggers who accept payments or free products, the bottom line is clear. Cash and in-kind payments must be disclosed. The associate director for advertising practices at the Federal Trade Commission, Mary K. Engle, said that the overall idea behind the guidelines was not new. What was new was the explicit reference to blogs and other forms of social media.
The revised Guides … add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers–connections that consumers would not expect–must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.
An article in a recent New York Times article explains why this is important.
Reporter J. David Goodman cites the example of Absolut Vodka offering freebies like vodka and cameras to several independent bloggers in connection with the annual blog festival called Brooklyn Blogfest 2010. Several bloggers accepted. Of those who wrote about Absolut, some disclosed the gifts and some did not. Of those who disclosed the connection, only a few provided full disclosure. Then a marketing memo appeared online and critics began calling the festival a “shilfest,” Goodman writes. He said it exposes the “thorny ethical territory” that exists when bloggers accept compensation from those they write about.
As blogs take their place alongside traditional media, their writers must grapple with how to take advantage of moneymaking opportunities, steer clear of federal regulations — and remain their ornery independent selves. The promise of a blog lies in its unfiltered voice.
Chances are the government won’t have the resources to track down every single bottle of vodka sent to a blogger. But even if the law doesn’t catch up bloggers who don’t disclose their payola, their readers might, as Goodman’s article points out.
To find out more, you can read Goodman’s article in the New York Times, or this post on the Federal Trade Commission website.
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