In December 2009 new Federal Trade Commission (FTC) guidelines on the use of endorsements and testimonials in advertising took effect. The revised guidelines concern blog posts and other social media word-of-mouth marketing. The purpose of these FTC guidelines is to help advertisers, and now bloggers, stay in compliance with the FTC act.
The FTC has long held that “material connections” between advertisers and endorsers must be disclosed. If a blogger receives cash or some other in-kind compensation, for example, free products or conference registration, in return for writing about a product or service, that is considered an endorsement and must be disclosed to the public. Porter Novelli published a helpful six-page summary that includes historical context and recommended best practices.
Why has the FTC cracked down? Companies know that word-of-mouth is the most effective marketing, particularly when it’s from someone you trust. A blogger with a large readership might receive a basket of products or an all-expense paid trip from a company looking to reach her audience. In return for these favors, the blogger might write glowingly about the company’s product. Her readers trust her and buy the product — win-win for the company and the blogger. However, many of these bloggers weren’t disclosing the payola. Their readers trusted their endorsements without knowing the whole story. That is deceptive advertising.
As with all regulations, the interpretation of these guidelines will likely evolve as the FTC decides to pursue some cases and not others. However, the most ethical (and legally prudent) thing for a blogger to do is to disclose any freebies, no matter the cost, whether it’s a car, conference registration or meal at a restaurant. We’re human. ‘Free’ puts us in a mood to be kind, but not necessarily credible; your readers deserve to know that. Don’t deceive anyone by telling less than the whole story.
If you receive free products or services, how do you handle it? I’ll let Mary from the FTC tell you.
Porter Novelli also recommends that bloggers who work with marketers create a disclosure policy.
Associations who partner with bloggers on outreach campaigns should also read the Porter Novelli summary and Maggie McGary’s post on the “slippery slope” of blogger outreach. Bloggers can certainly provide access to target audiences that associations may not be able to reach on their own, but everyone should be up front about expectations and ethics.
I wonder, are print media reporters, columnists and reviewers also required to make such disclosures? Anyone know?
Association Brain Food 
Hey–thanks for the link love!
I’m pretty sure that traditional reporters are not expected to make the same disclosures–I know I’ve seen a blog post or article about this somewhere but of course can’t find it now.
On the very rare occasion that I get something for free and blog about it, I definitely disclose–and even find myself doing “reverse disclosure” when I blog about something I DIDN’T get for free and want to make sure it’s clear that I’m not raving about whatever it is because I got it for free. I think this is sort of overkill, but also necessary for “influencers.” Let’s face it, when a hugely influential blogger raves about something it’s a huge boost for whatever brand/etc…and it only serves to reason that people will wonder whether the blogger got paid for that shout-out.
LikeLike
You’re welcome. Too bad it wasn’t in the copyright post, huh?
Ha ha, I have seen you and other blogger friends disclose their lack of relationship. I always appreciate that. It means that you’re a true raving evangelist and entirely believable. I remember those types of endorsements if they’re for a product or service that I’d be interested in.
LikeLike
This poses a real challenge in short form media (Tweets, Facebook status updates, or Foursquare check-ins). Here at CMP.LY we have been on the forefront of these issues. We have developed an emerging standard that makes compliance and disclosure straightforward.
The guidelines may be complex, but the solutions can be simple. For examples, see a great example of a disclosure that was posted earlier today:
http://cmp.ly/6/uep9w6
and, of course, my disclosure:
http://www.cmp.ly/4/co2loq
LikeLike
Interesting. So if a blogger chooses to disclose in this way, a reader would have to click a link to read a page on what the blogger received? I wonder how many would click? I prefer the blogger to be more straightforward and tell me directly in the text of the post, yes, they lent me this car for three months, or they sent me this basket of products.
LikeLike
Oh, nicely done promotion on my page, by the way. Not.
LikeLike
I am sorry. I did not mean to self promote. Just thought you would be interested in the first provider of solutions for advertisers in Disclosure & Compliance for Social Media.
CMP.LY has developed the only comprehensive disclosure method that addresses a marketer’s specific needs and liabilities under the revised FTC guidelines for all social media today (including blog posts, Facebook updates and tweets). We have worked very closely with the FTC to review and establish compliance standards for advertisers. We work with several Fortune 100 companies on their blogger outreach campaigns and their paid endorsements. Its really up the reader if they want to click on the link, CMP.LY was developed to protect the blogger and advertiser and provide full analytics in case of FTC audits.
Please accept my apologies for any confusion.
LikeLike
I still think I rather see a blogger be up front about what they’re receiving in return for their post, rather than hiding it behind a link. If they want to do both, fine, but they should be up front about it in the post itself.
LikeLike
I like CMP.LY for tweets (not that I’ve ever had anything to disclose in a tweet, but I like the idea) but I agree, in a blog post, there’s ample room to spell out exactly what material relationship there is, if any.
LikeLike
Thank you both for your input and I completely agree. CMP.LY is extremely useful in Tweets as well as Blogs and all social media outreach campaigns to aid in full transparency and compliance. And Absolutely a blogger should very very clear on their relationship with a product – but that is not the case most of the time. And even if they disclose, Its hard to track where and when that blog/tweet/etc starts going viral for the marketer to track. Thats how we help.
Appreciate the conversation here. Thank you!
LikeLike