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.

12 Replies to “FTC to Close Loopholes in Blogger-Marketer Relationships”

  1. I would never read Gottleib’s site because of her gushing effusiveness but don’t see any problem with her accepting a test drive period with a Lexus. Not only does she disclose that fact in the very first sentence of the post but it’s pretty much standard practice even in professional auto journalism circles, no? Or does “Car and Driver” buy cars for their staff and then sell them after the review?

  2. Wow. Exactly right. I mean, business IS business and bloggers and companies can scream “but we.they aren’t journalists!” all they want- however business is being conducted and should be subject to the same regulations.

    Not to mention, it’s not HARD to disclose. One line. One line that covers the blogger, the company and the rest of us out here looking bad because of the people who can’t seem to manage to include that ONE line.

  3. Thanks for pointing me out.

    1. I accepted a 48 hour test drive. I loved the car, lucky me.
    2. I have had much shorter test drives with other cars and not written about them, becuase I didn’t have time to decide anything about the car.
    3. I was not paid for that review. It cost me a fortune to park the car in NYC, if anything it was a loss.

    You can hold me up to the light, I will pass any disclosure test you offer.

    1. Sorry, you’re just on my radar right now. Unfortunately, the entire practice is too common for my liking and no, I don’t think you should have posted a review on your blog about the Lexus. So they gave it to you. Was it under the pretense of a review? Positive or negative? I’m sure that if it was to pass the fair trade sniff test, Toyota Legal would have to be involved.

      Either way, it doesn’t matter.

  4. I agree that a simple notice of disclosure is not too much to ask. But I disagree with the contention that, in the presence of the disclosure, it is unethical to accept the merchandise or other consideration in exchange for the review.

    There is a balancing mechanism. Once a bias becomes evident in the reviewer (I’m thinking of some in the computer business), their credibility hits the skids. From that point forward, their reviews become somewhat less valuable than a faded sign on a faded barn along a seldom-used road.

    There are some reviewers whose integrity has been discounted so many times that their positive reviews automatically steer me away from what they are promoting.

  5. WOW! That is incredible… Ultimately, my thoughts are that this shouldn’t be regulated unless it’s deceptive, but then again – where do you draw the line. Ultimately, any blog owner should be smart enough to include this information in their policies – however, I think this is taking it a little far… The government has enough things to regulate and spend tax payer money on – people need to be accountable to themselves more often and use common sense when spending their money. However, I think that products and services that are deceptive should be researched thoroughly upon complaint in order to protect consumers…

  6. This is quite a proposition that the FTC has put upon us. Looking at this from multiple angles, it definitely leaves a bad taste in my mouth. Like many rules, and regulations I agree with the spirit behind it. But the implementation is what scares me, and I have my extreme doubts about if the FTC is adequate enough to do a good job doing it. In essence, I don’t think the ends will justify the means.

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