Earlier this week, the FTC put forth new revisions to its guidelines concerning endorsements and testimonials in advertising. In addition to altering how far advertisers can go to make claims about a product’s effectiveness, the FTC rules now include restrictions on bloggers that will require them to disclose when there is a “material connection” to an advertiser or sponsor.
According to the FTC statement, “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.” This means that when sample products are sent for trial, the blogger has to note it in the blog. The rules don’t specify how they disclose it, as long as they do. If they neglect to come clean with any connections, the blogger could be fined up to $11,000.
These new guidelines do differentiate between “hobbyist” bloggers and those that make it their livelihood. Someone that buys a product and raves about it on their own personal blog or on a message board is not held to the same criteria as a commercial blog. The new FTC revisions were a long time coming–the last update was in 1980, long before the Internet and when blog was just a made up word found in children’s books.
The practice of funding endorsements from advertisers has been around for years in all parts of the media, but now that blogging has become so mainstream, blogs are now being specifically mentioned in this latest round of updates. A paid endorsement used to be associated with only monetary compensation, but not any more. Any kind of payment–even free products or services– is now included in the ruling and is considered an endorsement.
The release of the updated guidelines is still very fresh and the blogosphere is continuing to digest the new rules, but I suspect that the many websites that exist for the sole purpose of spreading feedback will not be keeping quiet. As a mom, my first thought is about the many parenting sites and “mommy-bloggers” that feed on mom-to-mom communication. Will they be subject to these new rules? If they blog often, regularly receive products to try and give endorsements that tout the advertiser, then the answer is yes.
There has been a trend in recent years for marketers to capitalize on these types of consumers, who will blog about products to their circle and spread the information like wildfire. Essentially, they are free marketing for companies, minus the cost of the product sample. However, the new definitions included in the FTC guidelines may cause bloggers to think twice when faced with a stiff fine–and this will hopefully result in not only greater transparency, but a more obvious path to monetization for those who seek to make their living from their blog. Although the FTC isn’t likely to crackdown and do an all hands on sweep of the blogosphere (it’s just too massive) the possibility of penalty does exist. It will be interesting to see how the new rulings affect the landscape of the blogs. How likely are bloggers to comply with this? Do you think the threat of a penalty is enough to compel greater transparency?
Note: I was not paid by any sponsors to write this post!