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.

click to go to FTC site to watch 17-second video

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?