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Posted by: David Spinks - 7 October 2009 / 10:05
If you haven’t already read up on the new FTC guidelines, you can find the official announcement here. This line from the announcement explains the guidelines in a nutshell:
“…advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect.”
If you don’t disclose such an arrangement, you can be fined up to $11,000.
Chuck Hemann of Dix & Eaton, Sonny Gill and I have collaborated on this post to take a look at the possible effects of these new guidelines.
Will the new guidelines be effective?
- “Goal is to Educate” sounds like we don’t know how to stop you, but we want you to know it’s wrong. The guilt factor will only go so far. Everyone already knows it’s wrong…some just don’t care and this probably won’t change anything.
- Likely to set an example. Once/if a prominent blogger is fined by the FTC for non-disclosure, it will resonate deeply within the blogosphere and others will be sure not to be caught in that situation. Though, if making an example of a few didn’t work for preventing music pirating, will it work for this?
- “[and] if somebody reports violations then we might look at individual cases…” So even if someone reports a blogger, the may or may not look into it.
If it is effective, what are the pros?
- Lend credibility to the industry. It will not entirely eliminate “blogola,” but when a blogger discloses a material connection with a company or its products it allows the consumer to interpret the information with all of the facts in hand.
- Blogging will become reliable. Removing the bloggers that aren’t honest will build more respect for blogging as a whole, and bloggers will be considered more reliable.
- Social media as a whole will become more reliable. These guidelines apply to facebook and twitter as well.
- Some oversight is good. Anybody that’s been around the block will tell you that too much regulation stifles growth while not enough leads to corruption. The FTC is searching for the appropriate balance that will help all.
- Adds transparency. Social media prides itself on transparency, yet there is the very real possibility that we (the readers) are unaware of material connections. This helps eliminate that “wall.”
What are the cons?
- Unclear and unreasonable outside of blogging. The guidelines are now said to include both facebook and twitter. For blogs, disclosing is easy, but how do you disclose sponsorship when you become a fan of a brand on facebook?
- Focus on education. This leaves a very a blurry line for bloggers who get reported for non-disclosure, giving them a case for just a slap on the hand because of the lack specifics & guidelines and ‘education phase’.
- Admittance that enforcement is not possible – even for 1,000 blogs. Bloggers who know that they’re not being watched by the FTC may continue to push the envelope, regardless of this ruling.
What do you think? Will the new guidelines be effective and what will their impact be?
UPDATE: The FTC responded to some blogger complaints, and clarified that there is in fact NO $11,000 fine for failure to disclose. The FTC is targeting the brands that are initiating the sponsorships and placing a focus on education rather than enforcement.
Chuck Hemann is the Manager of Research and Online Reputation at Dix & Eaton, a communications consultancy with specialized expertise in social media strategies and tools. You can connect with Chuck on Twitter or at his blog on PR measurement.
Sonny Gill is an experienced online marketing professional with a focus in Social Media with a background in building effective social media & community strategies, brand monitoring/management, blogging and content creation. You can connect with Sonny on Twitter or at his blog.