Soon, Bloggers Must Give Full Disclosure

On Monday, the FTC said it would revise rules about endorsements and testimonials in advertising that had been in place since 1980. The new regulations are aimed at the rapidly shifting new-media world and how advertisers are using bloggers and social media sites like Facebook and Twitter to pitch their wares.

The FTC said that beginning on December. 1, bloggers who review products must disclose any connection with advertisers, including, in most cases, the receipt of free products and whether or not they were paid in any way by advertisers, as occurs frequently. The new rules also take aim at celebrities, who will now need to disclose any ties to companies, should they promote products on a talk show or on Twitter. A second major change, which was not aimed specifically at bloggers or social media, was to eliminate the ability of advertisers to gush about results that differ from what is typical — for instance, from a weight loss supplement.

For bloggers who review products, this means that the days of an unimpeded flow of giveaways may be over. More broadly, the move suggests that the government is intent on bringing to bear on the Internet the same sorts of regulations that have governed other forms of media, like television or print.

“It crushes the idea that the Internet is separate from the kinds of concerns that have been attached to previous media,” said Clay Shirky, a professor at New York University.
Richard Cleland, assistant director of the division of advertising practices at the FTC, said: “We were looking and seeing the significance of social media marketing in the 21st century and we thought it was time to explain the principles of transparency and truth in advertising and apply them to social media marketing. Which isn’t to say that we saw a huge problem out there that was imperative to address.”

Still, sites like Twitter and Facebook, as well as blogs, have offered companies new opportunities to pitch products with endorsements that carry a veneer of authenticity because they seem to be straight from the mouth — or keyboard — of an individual consumer. In some cases, companies have set up product review blogs that appear to be independent.

One such case involved Urban Nutrition, a seller of supplements, that ran Web sites like WeKnowDiets.com and GoogleDiets.com. The National Advertising Review Council, which governs the industry’s self-regulatory programs, said the sites were “formatted as independent product-review blogs.”

Jonathan Zittrain, a professor at Harvard Law School and co-founder of the Berkman Center for Internet and Society, said, “the rules are looking ahead to a quite possible future when there is a market to buy ‘authentic’ public endorsements.”

Some marketing groups fought the changes. “If a product is provided to bloggers, the FTC will consider that, in most cases, to be a material connection even if the advertiser has no control over the content of the blogs,” said Linda Goldstein, a partner at Manatt Phelps & Phillips, a law firm that represents three marketing groups, the Electronic Retailing Association, the Promotion Marketing Association and the Word of Mouth Marketing Association. “In terms of the real world blogging community, that’s a seismic shift.”

Goldstein added, “We would have preferred the FTC to work closer with the industry to learn how viral marketing works.”

Guidelines

The new guidelines were not unexpected — the commission gave notice last November that it would take up the matter. They will affect scores of bloggers who began as hobbyists only to find that companies flocked to them in search of a new way to reach consumers. About three-and-a-half years ago Christine Young, of Lincoln, Calif., began blogging about her adventures in home schooling.

It led to her current blog, FromDatesToDiapers.com, about mothers and families.  The free products soon started arriving, and now hardly a day goes by without a package from Federal Express or DHL arriving at her door, she said. Mostly they are children’s products, like Nintendo Wii games, but sometimes not. She said she recently received a free pair of women’s shoes from Timberland.

Young said she had always disclosed whether or not she received a free product when writing her reviews. But companies have nothing to lose when sending off goodies: if she doesn’t like a product, she simply won’t write about it. “I think that bloggers definitely need to be held accountable,” said Young. “I think there is a certain level of trust that bloggers have with readers, and readers deserve to know the whole truth.”