Who's paying whom?
The Federal Trade Commission Act allows the FTC to act in the interest of all consumers to prevent deceptive and unfair advertising acts or practices. While traditional advertising claims usually draw the FTC’s attention and enforcement, government regulators are now turning their attentions to a class of unlikely advertisers – blogging moms and citizen journalists.
That’s right. The FTC has begun investigating if online mothers (and, perhaps, any well-read bloggers and other online / amateur reviewers) who accept free goods and services then blog about the same freebies, are subject to the same regulations that govern traditional advertising and endorsements. The end result probably will be a much-needed New Media update of the FTC’s standing guidelines for advertising and endorsements.
Readers of Communi-K may have seen Mary Meek McNelis’ recent postings on “The Mommy Market.” There’s no doubt that blogging moms and their readers are proliferating in popularity and influence. The FTC has accepted public comment on proposed revisions to its advertising and endorsement guidelines which were first published in 1980. Future guidelines adopted may require moms and any other bloggers to be fully transparent and disclose their relationship with advertisers (and if they are being compensated) when voicing opinions about companies and their goods and services.
Rich Cleland, staff attorney for the FTC, recently said that “the presumption is that we can apply traditional advertising principles like transparency and accountability to social media the same way as it would apply to traditional media.”
But, in a recent BusinessWeek article, Thomas Cohn, a lawyer representing the American Association of Advertising Agencies, Interactive Advertising Bureau, and other ad industry groups, said proposed rules changes “really raise more questions than they answer.” Cohn said he advocates self-regulation by bloggers.
IMHO, this hasn’t worked in practice, and many blog readers are getting advice, reading product reviews, and making purchasing decisions without knowing if the blogs they’re reading are being influenced by compensating the author in some way – free diapers or cash for word, for example. But the FTC must consider that any future endorsement guidelines have the necessary clarity so everyone involved understands the ground rules.
In response to the FTC’s request for comment the Public Relations Society of America (of which I serve as chair-elect of the technology section), “shares the view of the FTC that the public is best served by fully open and transparent information offered to consumers….however, the PRSA maintains that key provisions of the proposed rules are not sufficiently clear to prevent confusion and uncertainty that will leave communications professionals without adequate clarity to advise the clients who rely on them for guidance in creating promotional campaigns for their products, services and organizations.”
Thus, with more and more consumers turning to the Internet for advice and opinions, and in our new age of transparency, it may not be such a bad idea to require anyone being paid in cash or goods to disclose their online relationship with advertisers. For example, after the previous Wall Street research scandal, talking head market analysts that go on TV must now disclose if they or their firms have a relationship with the companies and the stocks they discuss. And, as the late U.S. Supreme Court Justice Louis Brandeis said, “sunlight is the best disinfectant.”
