What Will Become of The Flog?

Hard to believe, but 2010 will arrive in less than a month. Given that most people check out right before Christmas, we have perhaps 15 business remaining. And, since the holiday season often involves physical gifts which take time to ship, that 15 day window becomes more and more like 10. Besides the last minute rush that comes in the form of marketing and gift buying, this season also tends to bring about reflection on the year that has past. This December, marks another special occasion, if we can call it that. On Tuesday, December 1, 2009, the revised FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising went into effect. They represent a significant updating of policy that applies to celebrity spokespeople to now the blogosphere. In broad strokes, the revisions, like the previous version of the policy, focus on truth in advertising, i.e., making sure users can believe what they see and make informed decisions. For example, payment for services must be obvious, and as explained in an email sent by Azoogle Ads to all affiliates, "Endorsements (advertising messages which may be understood as the opinion of someone other than the sponsoring advertiser) must be representative of what consumers can reasonably expect to achieve. Any claim made by the endorser must reflect the opinion or experience of a significant proportion of consumers. Disclaimers like ‘results not typical’ are no longer sufficient." Put simply, you can market to people, but you can’t lie or deceive them.  

We can see the changes already in place. If you watch drug commercials, you will see the format, the consultative discussion going on in the background, but on the screen you will find text reading, Dr. Johnson is a paid actor, or Dr. Fisher is compensated for their opinion. In the flogosphere, we like many, assumed that these new rules were meant to apply to marketers who use fake blogs; they just happened to cover all of blogging. We’ve since changed our opinion to think, these guidelines focus on blogging. As one lawyer quipped, he had yet to see a fake blog that complied with any existing law, let alone the new one. That affiliates were fretting over the new December 1, deadline for compliance made him laugh, because in his opinion they certainly weren’t concerned with legalities before hand. Such words are critical and slightly dismissive, and we have been accused of not necessarily being too critical on fake blogs but simply writing too much about them. Here’s why. Just as anyone will profess wanting to run a clean business, especially when speaking to an investor or advertiser not in the space. For many, they don’t mind the cash generated from operating in the gray. If they get even an extra month of profits, because no one outside the industry put pressure on them to change, they will take it. We understand that attitude but don’t agree with it.

I’ve seen firsthand the amazing benefits that can come by working in an industry that no one else really understands and the profits that can come before others start to take a closer look. An industry colleague likes to use the phrase the steak and the sizzle, one I can’t help but use whenever I can. Applied to our industry, it refers to what we tell others and what pays the bills. In a perfect world, the two are pretty close together. In lots of cases though, the steak is the meat of the business, and the sizzle keeps others from taking a bite. It’s not bad to have one piece of the business that pays the bills while another is the goal, the showpiece. When the core business involves arguably illegal practices or soon to be illegal practices, that’s where it is a problem. It’s a problem because it becomes a crutch. And, true, the profits driven from the gray activity can be used in many productive ways – hiring staff and acting as an in-house venture fund for research and development of more mainstream activities. Like the best laid plans full of good intentions, it more often than not doesn’t end up that way. The profits become addictive, and they derail any serious attempt to create true lasting value. We’re human, so we’ve done it too, and having seen it lead to ultimate failure, that’s the main reason for trying to raise awareness of it in others.

Making money isn’t easy. Making money sustainably by providing actual value is even tougher. Yet the allure of making money remains so strong that it’s only human nature to continue doing what we’re doing until we are forced to make a change. It takes a very different mindset to chose not to do something and focus on a path that not everyone else is taking, with the feeling of missing out only making it that much harder to continue down the other path. As vicarious marketers, we have a pretty high level of respect for the creative genius those who flog have. And, our being critical of them doesn’t just come from the above experience of profit being a drug and thus running a business like a junkie – from one high to the next. It comes because of something we have mentioned before, be it with flogs or facebook app ads – the race to the bottom. Instead of people trying to one up the other in compliance, they one up each other in how little they are compliant.

This year has shown that there is life beyond ringtones, as well life still in ringtones and mobile. It also showed us that an advertorial model can work, and that performance marketers can become serious media buyers, not just buyers of social media traffic. We want to see that continue, as such growth pumps up the industry, which brings in more money. The reverse is what happens, our actions keep out others and close off places to spend – Yahoo display, Facebook Flyers, etc. As we’ve said before, our industry starts to resemble the adult industry. That isn’t necessarily bad; they have lots of fun and make money, but many of us joined mainstream advertising because we could tell our parents and not liberal friends what we do. Continue down this path, and we might find ourselves becoming more tight lipped.