A lot of people have been talking about the new FTC proposed guidelines and how they may impact social media marketers ability to outreach to bloggers. The Word of Mouth Marketing Association (board member) had a great session on this with Tony DiResta attorney at Reed Smith (and formerly with the FTC) as part of our new Brands Council. members can access the presentation in the Members Center. Tony's summary of the impact:
- Advertisers are subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose a material connection between themselves and their endorsers.
- Endorsers may also be subject to liability for their statements.
- The communicator of the message must be transparent & honest.
- The FTC requires substantiation, or an appropriate basis for claims being made.
The FTC is more consumer-friendly today. They are not satified with the advertising communities efforts to self-regulate. You can be sure they will also be looking and taking some type of action in other areas as well like behavioral targeting. WOMMA has had a history of supporting only the best of practices within word of mouth marketing and social media marketing. We have routinely commented on the FTC proposals over the years and believe that marketers have a great opportuntiy to embrace the best, most ethical approaches to social media.
If marketers don't step up, they risk a more restrictive government regulation, and even worse, the pollution of word of mouth marketing whose core strength is based upon increased trust.
Full, proactive disclosure
The biggest implication of the new guidelines is the government's apparent readiness to regulate and demand what I would call full, practive disclosure of the relationship and terms of the arrangement between blogger and brand (or their agent).That means ensuring that any influencers (bloggers, facebook group owners, message board mavens) you outreach to in the hopes that they might share WOM about your brand or issue, fully disclose the terms and relationship they have with you. If you loan them a car to try the car, they need to say so. If you give them a laptop to try that laptop, they need to tell their followers that. Consumers need to know what exactly happened between marketer and influencer. That way they can make up their own mind as to the credibility and weight of the opinion.
It's not enough for the marketer to suggest that the blogger disclose.They need to make sure it happens and is "full" and proactive. Best practices in disclosure are being developed everyday to answer situational questions about things as arcane as whether I have to put (client) in every Tweet about a client event (I put it in some but not all. anyone following me will see that I have disclosed along the way multiple times). Our team at Ogilvy has developed a list of best practice "Full & Proactive Disclosure" guidelines to protect our clients and consumers. I would expect all social media marketers to do teh same.
Facts vs. Opinion
As The Metz summarized in his summary of the recent Adage article, bloggers who get the facts wrong about a product may be seen as making false claims:
"When a blogger (who is compensated either in product or cash) writes about something that is knowingly false, not only are brands liable, but so are the bloggers themselves. This extends to the public-facing areas of social networks like Facebook and MySpace...
...Here’s a fairly realistic example. You’re a tea company that sends out $50 boxes of tea for bloggers to review, citing that some of the enclosed products are organic. It turns out that one of the twenty bloggers screws up, and cites the entire product as organic. An organic competitor responds, and files an FTC complaint. Brand gets slapped with a $20k fine, and then sues blogger for damages. Under this proposed legislation, the blogger is indeed secondarily liable.
Here’s another example: Victoria’s Secret sends out free nylon thong underwear to 2000 Facebook users (young women 18-24 who have 500+ friends each, targeted as “influencers”). 2 of them make false statements about their new cotton underwear, and someone at Hanes alerts the FTC to a violation of the regulation. Victoria’s gets sued, and the buck eventually gets passed to the end-user..."
Is there a difference between bloggers who fully disclose a non-cash relationship with a brand in terms of their liability here? Well these guidelines remain in review and we will have to see what finally gets enacted. At the very least, brands will have to take extra steps to not only push influencers to fully disclose but to make a commitment to getting the facts straight. My personal opinion (this whole blog is that, by the way): It may also come to pass that bloggers paid cash have a higher liability for themselves and brands with or without disclosure.
Cash May Be A Step Too Far
What's the difference between giving a blogger a new set of noise cancellation headphones to experience that product and potentially write about it and giving them cash. Both must fully disclose ("Company X gave me their product free and outright to try and left it up to me as to whether I would post on it and what I would say..."). Challenge is that the blogger paid in cash must write something. They do not have the option of saying nothing. Theoretically they can still come out with a negative review but that is unlikely. Paid reviews may simply be a step too far. They just do not activate true word of mouth. It is paid media in a format that may confuse the public (is this a paid placement or genine opinion?).
Word of mouth and social media marketing's strength lies in the trust we have for people like ourselves. Let's not do anything to diminish that trust. Or to push the FTC to do our job of protecting consumers and brands alike.
Other Blogs on the FTC Guidelines: