The Federal Trade Commission (FTC) has approved final revisions to a guide that will outline the legalities of testimonials/endorsements on blogs and in the social media world in general. The guide, which is the first update to this particular category since 1980, is intended to reign in the wild world of blog marketing and add a sense of transparency to the industry. As blogging has slowly evolved into a part of daily life, blog visitors often find themselves stuck in a cloud of confusion. Are reviews really reviews? Is someone’s opinion REALLY their opinion? Well, the FTC is here to change that.
The FTC’s new guide takes aim at consumers, experts, organizations, and celebrities that receive compensation for testimonials on blogs –“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.” I think this is an excellent rule as an increasing amount of online testimonials are being used for promotional purposes, most of which are clearly not representative of the portrayer’s true thoughts. Tisk tisk!
According to the FTC’s press release on 10/05/2009, “The revised Guides also add new examples to illustrate the long standing principle that ‘material connections’ (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other ‘word-of-mouth’ marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.”
How will the FTC’s social media guide impact the advertising industry?
Well, to begin, blogs that are compensated for posting testimonials will need to re-think their marketing practices. Junk blogs that provide gossip and false celebrity endorsements will end up taking a big hit as the smokescreen slowly disappears. Visitors will realize that a particular celebrity really hates a clothing brand and would never wear the line, but was paid to give a testimonial. The same applies to all niches.
Additionally, testimonials and blogs will return to their original, transparent state and will, therefore, become trusted again. We, consumers and blog readers, will now know whether testimonials are true or compensated.
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Aaron Schoenberger is Founder of The Brainchild Group — a top online advertising agency that specializes in strategic SEO and Social Media. He’s known for his work with celebrity clients, top restaurants, professional athletes and Fortune 500 companies. Feel free to Contact Us for more information.