FTC to Close Loopholes in Blogger-Marketer Relationships

Late last night, I came across an AP article that indicated a long awaited smackdown was coming from the FTC regarding paid reviews on blogs. Digging deeper into the article, it seems that the issue is not so much paid reviews as it is proper disclosure and verifiable claims.

In the blog world, we are subject to increasing amounts of “freebies”, particularly as our individual or demographic influence grows stronger. Companies want to get involved and get bloggers on their side, spouting their reviews and influencing opinion. As a disclosure, I participated in a Sears promotion, have been provided VMWare software on a “view” basis and was given a pair of Joe’s Jeans. Early on, I was also provided a cell phone from Sprint. That’s about the extent of the freebies I received. In terms of reviews, my policy has already been defined.

In some sections of the blogosphere, it’s reached a tipping point.

Meanwhile, some readers of Outside the Beltway see the move as indicative of future malfeasance by the federal government.

The problem is, this enforcement measure is just that – enforcement. There already are fair trade regulations on the books that dictate appropriate ways for businesses to engage in commerce – whether marketing, communications, disclosures, advertising, etc. These regulations already exist to protect the consumer. As with many industries, new media was a disruptive introduction and businesses are left trying to figure out how to compete in a new landscape.

The medium changes, but the business does not.

Businesses are still subject to FTC regulations that protect the consumer from the overrun of over-capitalistic companies trying to beat the competition at the expense of the consumer. This new regulation will simply update existing regulations to more specifically clarify that, hey, yes, companies have to play by the same rules when it comes to bloggers too. Companies should be enforcing their legal requirements on anyone peddling their goods in a quid pro quo or financial exchange. This is fair trade.

Deeper in, we see the same kind of attention and connection to affiliate marketing – the online business tool that allows a blogger to sell a product or service on behalf of someone else, and make a commission on it. While I don’t endorse eliminating affiliate marketing, I do find it borderline seditious and would not mind stiffer requirements on it’s use. For example, there should probably be an LLC or other legitimate business entity behind the use of affiliate marketing to ensure that paper trails and accountability can be traced.

Either way, this sort of thing requires some kind of enforcement, I think. It doesn’t feel right. On the flipside, this feels completely right from an ethical standpoint.

Update: Caroline McCarthy of CNET has more. Everyone keeps talking about the freebies. I want to know more about the affiliate crap.

Trends in Publishing, Advertising and Paid Subscription Model

The economic downturn is hitting everyone hard. Online content models and advertising is one of the harder hit areas. Long before the beginning of the market freefall, advertising revenues began declining. Evidence shows that, while print and television advertising is declining at an incredible rate, online advertising is not faring much better. The saving grace in online advertising is that, while it is declining, it is declining at a lower rate than offline advertising.

However, it is still declining.

The days of making money online via advertising would, by most accounts, seem to be over and with it comes the question, “How exactly do we make our industry profitable again?”

Conventional wisdom suggests that there are two models. The first is the advertising model. The second is a paid subscription model. Though we have been brainwashed to expect free at every turn, part of me wonders if a paid subscription model would work better. Surely, readers are willing to pay a small fee for access to valuable content?

For my part, I am considering a switch to a paid model. It is my belief that the content found here is worth paying a small fee for. In exchange, such a model would eliminate advertising and would probably be in the neighborhood of $5 a month. But I want to talk to you first.

Does this make sense to you? Would you be willing to support the emergence of a new model that benefits the larger community and how content business models evolve for a low price?