The Federal Trade Commission has revamped its guidelines concerning endorsements to take account of the new boom in social marketing, blogger endorsements and word of mouth promotion. But those updates—the first the commission has produced since the 1980s, when “blogging” was just a nonsense word—have raised the ire of several trade associations representing marketers and created confusion for brands that want to use bloggers to get their products and services out into informal online conversations.
The FTC says it wants to extend into digital communication the same user protections it enforces in offline advertising: namely, to make sure that consumers know when a commentator or content creator has a “material connection” to the marketer. Though most marketers don’t control what is said by the bloggers they enlist in their promotions, the FTC says, just the fact that they’re offering these bloggers benefits—even in the form of samples or review copies—must be made clear starting Dec. 1, 2009.
Both the bloggers and the advertisers could be held liable for failing to disclose these links.
At the simplest level, the rules say bloggers must disclose when they are employed by an advertiser or by some third party that would benefit, such as a marketing agency.
But getting free products can also constitute material connection in some cases. The FTC will require that bloggers reveal those connections, and that brands and agencies monitor the bloggers they use in social marketing and set policies for handling matters when disclosures aren’t made.
The guidelines don’t specify what dollar value triggers the “material connection” rule. Legal experts agree that no one will get busted for praising a free sample of a new chewing gum, for example. However, sending a new video game to a college-age blogger could be valuable enough to require disclosure.
Expectation of future benefit could be another trigger: A blogger who reviews a sample of hair conditioner in the hope of receiving a six-month supply would also have to disclose the relationship.
The FTC has been gathering public comment on the guidelines for months, but that didn’t prevent some groups from objecting to them. Randall Rothenberg, president and CEO of the Interactive Advertising bureau, objected that the new rules “shackle online media” with constraints that offline media don’t have to abide by. He called for public hearings on the regulations.
“What concerns us the most in these revisions is that the Internet, the cheapest, most widely accessible communications medium ever invented, would have less freedom than other media,” Rothenberg said in his letter to FTC chairman Jon Liebowitz. “The new conversational media should be accorded the same rights and freedoms as other communications channels.”
Others complain that by simply listing examples of wrong blogger behavior without providing firm rules, the FTC has made compliance more confusing for brands.
“There are huge gaps in those examples,” says lawyer Linda Goldstein of Manatt Phelps & Phillips, which represents the Promotional Marketing Association and the Electronic Retailing Association, among other clients affected by the rules. “Companies want to comply, but they are very nervous. I think it’s going to be really challenging for marketers.”
Speaking to the Promotional marketing Association’s Legal Forum in November, Mary Lynn Bedell, senior counsel for the food and beverage division at Sara Lee Corp., said the new FTC guidelines were leading her department to look into how the company recruits bloggers for its mommy blogger outreach campaigns.
“Sara Lee wanted women who were raising families and discussing health and nutrition to talk about Sara Lee,” Bedell said. “So they looked at different women that had established blog sites, approached them and asked if they’d be interested in reviewing some of our products and speaking about them. The goal was always that they spoke honestly and gave their true opinion.
“I think at this point, it’s going to be important for us to make sure that [the bloggers recruited] understand the guidelines. And I need to understand better how we located these people. When we brought them on board, did we give them anything or do anything that might be seen as compensation? I know we didn’t pay them anything, but did we bring them into the company and wine and dine them?”
Apart from compensation disclosure, Bedell said companies using third-party bloggers as part of their campaigns will also have to set clear policies for spotting and taking down wrong information, since they may be held liable for claims those bloggers make.
“We already monitor those sites,” she said of the bloggers enlisted in Sara Lee’s mommy outreach. “But we’ll have to make sure that we’re doing so properly and that, if people are posting wrong information, it gets pulled, and that if a blogger continues to violate [the guidelines], they lose their Sara Lee mommy blogger status.”
Ed Glynn, a partner in the law firm Venable LLP, told the PMA Legal audience that they should first focus on the brand/blogger relationship before settling in to police third-party blog content. Glynn said that in the course of filing comments on these FTC guidelines for clients such as the ANA and the ERA, he was told by a senior FTC staffer that the commission was most interested in looking at whether individual bloggers were true independent actors or agents of the advertiser.
“When you’re sitting down and trying to figure out the necessity of disclosure about a blogging relationship, you have to ask, ‘What kind of hold, direct or indirect, do we have over this blogger?'” he recommended. If that marketer influence is judged to be strong, then the blogger could be considered an agent of the brand.
“This is going to change the way we lawyers who review advertising look at the world,” Glynn said. Previously, campaigns could be vetted, approved, and sent out into the world with confidence, with the analysis done and buttoned up.
But the nature of social marketing and a changed enforcement attitude at the FTC will mean that ad review becomes an ongoing process, not a product.
“What the FTC now contemplates is a policing of the blogosphere, or street teams, or any way that new media is used to relate one-on-one with your clients’ potential customers,” Glynn said. “Lawyers can no longer say, ‘That one’s done—movin’ on.”
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