So the FTC is going after Bloggers. There has been a flurry of reports about this in the Blog-O- Sphere. The FTC published a new ‘Guide’ outlining it’s policy on the “Use of Endorsements and Testimonials in Advertising”. See Official Report Here!
Basically the FTC is trying to eliminate Scammers from promoting Get Rick Quick Schemes. Which is really a good idea. They are also targeting Celebrities who fail to disclose that they are getting paid to endorse a product. This is the 1st revision to these rules in 30 years.
The new rules carry a fine as high as $11,000 if product endorsers and reviewers don’t comply.
The new guidelines, which go into effect Dec. 1, are designed to adapt to a new world in which blogs and social media Web sites such as Facebook and Twitter have quickly become go-to destinations for consumers to get an opinion about a product. The last FTC rules revision was in 1980.
An existing FTC rule that states product reviewers must reveal any connection they have with advertisers was extended to bloggers. Companies will often distribute free products to bloggers for their review, and sometimes advertisers offer payment for endorsements. The FTC said that endorsements on blogs appear to be “word of mouth,” but that is not always the case – sometimes companies create their own blogs that can give the aura of objectivity.
The new rules also clarify that celebrity endorsers of products must reveal their relationships with advertisers when making endorsements if they are pushing a product on a blog, social network or television talk show.
“The test here is, if the relationship were known between the blogger and the advertiser, would that affect the credibility of the endorsement?”
“That question has to be determined on a case by case basis. What we have produced is a general guidance that says in certain cases receiving a free product is not any different than being paid directly for an endorsement.”
- FTC assistant director of advertising practices Richard Cleland
When asked about the $11,000 Fine Cleland went on to further say:
That $11,000 fine is not true. Worst-case scenario, someone receives a warning, refuses to comply, followed by a serious product defect; we would institute a proceeding with a cease-and-desist order and mandate compliance with the law. To the extent that I have seen and heard, people are not objecting to the disclosure requirements but to the fear of penalty if they inadvertently make a mistake. That’s the thing I don’t think people need to be concerned about. There’s no monetary penalty, in terms of the first violation, even in the worst case. Our approach is going to be educational, particularly with bloggers. We’re focusing on the advertisers: What kind of education are you providing them, are you monitoring the bloggers and whether what they’re saying is true?
OK so what does this mean for us marketers, be careful of what you say on your blogs and web sites. The FTC has the power to fine you shut you down and generally make life miserable!