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Proposed Ftc Endorsement/testimonial Ad Revisions


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#1 iamlost

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Posted 05 April 2009 - 11:33 PM

For those of you who sell direct advertising space or - especially - those of you who right product/service reviews or use quotations within your articles and who live or work in the US or use US servers or other business services should take the time to stay abreast of the new proposed Federal Trade Commission (FTC) revisions.

Thanks to Bill Slawski of SEO by the Sea for the reminder: Proposed FTC Endorsement and Testimonial Ad Revisions Add Blogs, Message Boards, Street Teams.

The FTC is considering their first new revisions involving endorsements and testimonials in advertising since 1980, adding blogs, message boards, and street teams to their coverage, as well as imposing stricter guidelines for disclosures in ads.


* Example 5:

A skin care products advertiser participates in a blog advertising service. The service matches up advertisers with bloggers who will promote the advertiserís products on their personal blogs. The advertiser requests that a blogger try a new body lotion and write a review of the product on her blog.

Although the advertiser does not make any specific claims about the lotionís ability to cure skin conditions and the blogger does not ask the advertiser whether there is substantiation for the claim, in her review the blogger writes that the lotion cures eczema and recommends the product to her blog readers who suffer from this condition.

The advertiser is subject to liability for false or unsubstantiated statements made through the bloggerís endorsement. The blogger also is subject to liability for representations made in the course of her endorsement.

The blogger is also liable if she fails to disclose clearly and conspicuously that she is being paid for her services. [See section 255.5.]

In order to limit its potential liability, the advertiser should ensure that the advertising service provides guidance and training to its bloggers concerning the need to ensure that statements they make are truthful and substantiated. The advertiser should also monitor bloggers who are being paid to promote its products and take steps necessary to halt the continued publication of deceptive representations when they are discovered.


Do you know and understand your legal responsibilities in your jurisdiction(s)?

Hey, let's be careful out there.

#2 EGOL

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Posted 06 April 2009 - 06:52 AM

Interesting. Thanks. This will probably extend to affiliate marketers too - maybe they are already responsible for content?

It's interesting that you use medical products as an example. I've seen quite a bit of questionable blogging about them lately. In fact, I question if some of the products can do what the primary seller is claiming. ;)

How the claims are worded can make all of the difference - in both sales and legal matters.

Edited by EGOL, 06 April 2009 - 07:11 AM.


#3 glyn

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Posted 06 April 2009 - 07:08 AM

EGOL Affiliate and Responsible go together like Microsoft and Google.

These are small steps to bring in the wild west of the web.

When I see pepople that are paying .50c on Amazon Turk to write reviews of products, when clearly they will never even see the product, it's not ethical practice offline, so why the heck is it online. Answer: no legal framework.

#4 EGOL

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Posted 06 April 2009 - 07:15 AM

These are small steps to bring in the wild west of the web.

I am glad to see it... If I was someone like Bill Gates I would fund a new branch of the military to reel some of it in.

#5 cre8pc

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Posted 06 April 2009 - 02:52 PM

This has already been taken out of context by people.

It's not about reputation management or controlling freedom of speech, as are some of the comments I'm seeing on this.

Reputable bloggers do not make false claims about products because it hurts their credibility. Laws are there for those who purposely intend to do harm and make a buck by doing it (which, btw, is already against the law.)

#6 glyn

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Posted 06 April 2009 - 04:17 PM

Agreed. But I think that the anonymity of the web, allows for a huge and convincing array of blogs that's sole function is to promote a product and service, but under the context of being impartial. That's what not quite right at the moment.

But we're still a long way off getting digital identies given at birth. Social Media could be the start of that officializing process, because it's briding the gap between private and public space into a uniform identity.

G.

#7 iamlost

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Posted 06 April 2009 - 04:43 PM

This has already been taken out of context by people.

To rephrase the Pareto principle 20% of blogging is 80% missing or missed context and 80% reiterates the 20%

Somehow the words 'endorsements and testimonials' - both of which have specific regulatory meaning - have been missed. Or perhaps misunderstood. Both being polysyllablic may be problematic...

Edited by iamlost, 06 April 2009 - 04:45 PM.


#8 iamlost

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Posted 06 April 2009 - 05:30 PM

We can expect more in the area of government (not solely limited to the US) interest in the internet primarily in regards to data retention, privacy, and bringing online regulations (or lack thereof) in sync with the offline.

The OP is an example of the last. Few of the rules are 'new', simply new online. Yet another case of the webdev needing to become more businessman and less streetcorner huckster.

You may remember a couple of months back the FTC released a staff report,
Self-Regulatory Principles For Online Behavioral Advertising (pdf file, 411KB) that caused a similar fuss. Not so much what was in the report - that was/is difficult to argue against but rather the fact that two Commission members (not staff) went on record as saying this was online Advertisers last chance for self-regulation. And that online privacy issues needed to be broadened and specifically looked into.

Google's (among others) tap dancing was memorable. ;)

What is of particular interest, to me, is the number of such government studies and reports from various jurisdictions that lay out quite well the various problems - and potential solutions. If you care you can be proactive. If not you can run with the Wild Bunch until the regulators catch up with you.

#9 cre8pc

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Posted 06 April 2009 - 06:38 PM

Is it me or does this just SCREAM of panic and hysteria? So far, everything I've seen on Twitter and the press leans towards "I told you so" and claiming the end of social networking, including forums like this one.

This example is why we spent so much time on our House Rules. They were established in 2002 to protect ourselves from people who would wish to come to these forums and promote their products under false pretense.

One clause in the FTC ruling:

* Example 8: An online message board designated for discussions of new music download technology is frequented by MP3 player enthusiasts. They exchange information about new products, utilities, and the functionality of numerous playback devices. Unbeknownst to the message board community, an employee of a leading playback device manufacturer has been posting messages on the discussion board promoting the manufacturerís product. Knowledge of this posterís employment likely would affect the weight or credibility of her endorsement. Therefore, the poster should clearly and conspicuously disclose her relationship to the manufacturer to members and readers of the message board.



So, how would this be enforced, exactly?

What do I do with this? Take down the forums because I can't trust members to disclose who they are? Ridiculous!

The FTC is talking about products and services. So for example, when someone sends me a book to review, if I write about it in my blog, I must disclose they sent me a free copy. Of course. This is what I do, without a law forcing me to.

If someone sent me a book and paid me to write a good review, even if the book is bad, this is now against the law. Well, for God's sake, I wouldn't have done it anyway, nor would my readers expect such behavior from me. They might expect it from less reputable writers, or the zillions of paid review blogs out there.

The FTC information had nothing in there about social media and reputation management that I could see. It seemed targeted more for those who sell affiliate products and will say anything about that product if it will help them earn money. And again, how would this be enforced?

And so...regulating free speech has again created an outlet for people who feel they must police others by swinging a big FTC document around.

:emo3:

#10 A.N.Onym

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Posted 06 April 2009 - 08:46 PM

I think FTC just wants something to control and get paid for it, and who would miss such a big chunk as the Internet?

Technically, I'd let the market sort things out: good bloggers will prevail anyway. It's happening now, too: just look how the blogosphere and affiliate world have changed recently from thin websites to brand-building exercises.

The people simply need to know where they are going. If you are going to a forest alone, you bring a hatchet or a good running skill. If you are searching for answers on the Internet, bring your head, too.

That being said, how would an internet law institution regulate me, since I'm not a citizen of the US?

Btw, iamlost, the Sturdgeon's Law applies to bloggers, too.

Edited by A.N.Onym, 06 April 2009 - 08:52 PM.


#11 iamlost

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Posted 06 April 2009 - 09:14 PM

Calm down, Kim :)

It is really very very simple.
I won't go through every example, just yours:

First, it is not a ruling. It is a study paper for the commission members to consider when/if creating future regulations or changes.

Second, enforcement is usually via third party complaint. Typically competitors. ;)

To use 'example 8' the playback company employee is not disclosing that fact in his/her posts:
* First, the forum probably has no liability unless a 'staff' member, i.e. Admin or Mod, knew of the poster's employment non-disclosure and no action was taken; possibly not even then, it will depend how the actual regulation finally gets written if it does. Certainly not any more a concern than a member writing libel or infringing copyright.

* Second, it is the playback company that has broken the rules and that company the FTC will chase.

So for example, when someone sends me a book to review, if I write about it in my blog, I must disclose they sent me a free copy. Of course. This is what I do, without a law forcing me to.

If someone sent me a book and paid me to write a good review, even if the book is bad, this is now against the law.

First, this whole study paper is about bringing offline regulation to online venues. A matter of clarifying advertisements, testimonials. While you and many others are upfront about why, i.e. free copy, you write not everyone online does. Offline such people can be charged, online quite unlikely due to many rules specificity.

Second, it is not what you say so much as who you are and how you say it. If in your review (your example of paid to make bad look good) you state falsehoods or take facts, comments out of context, etc. you are breaking the rules. If you are an expert (another term with a specific legal meaning) and you have access to 'bad' information that you then ignore you have broken the rules.

This is not new. This is offline regulation now and has been for decades.

Again you raise the question of enforcement. Again, I say it will be all your competitors looking to get you out from above them in the SERPs. :) And the old faithful of consumer complaints. Believe me the FTC and similar agencies do not have to go looking.

Of course this does mean that just as with spammers thriving in SE SERPs some folks get away with bending and breaking FTC and other regulations fo quite some time. No system is perfect especially one that crosses regulatory boundaries.

But is there any reason why the online world should be 'free' of offline behaviour constraints? I am thinking of Google.

In the interim, I must say that listening to all the bloggers squeal is quite amusing. Me thinks too many doth protest too much. :naughty:

Remember also that this - should it actually happen - applies within the US only.
:pieinface:

#12 glyn

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Posted 07 April 2009 - 02:19 AM

Exactly.

For example, I meet a stranger on an airplane, should the first thing i say to them be "by the way, before we have this conversation I just wanted to declare that I am an a webmarketing expert". No. So I think there will be some common sense here.

G.

#13 Ruud

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Posted 07 April 2009 - 08:12 AM

It's the typical situation: you need a law to be able to convict people who do wrong, but the people who do wrong are not in the least touched by it.

But I think that the anonymity of the web


This law doesn't fix that.

allows for a huge and convincing array of blogs



This law doesn't fix that.

that's sole function is to promote a product and service


This law doesn't fix that.

but under the context of being impartial


This law doesn't fix that.

In the end this law would most likely limit and ultimately hurt some credible bloggers while the ones that want this type of service will launch a slew of fake blogs through established black hat methods.

Don't get me wrong; the idea is good, the principle is sound -- but it's as effective as saying "people should not (illegally) download (illegal) copies of copyrighted material". It doesn't work, enforcement doesn't scale, it ignores the principle question of "now just what has changed how" and when enforced Jane Doe Nickelback fan is persecuted; not the producers of that container of illegal CD's.


Hey, let's be careful out there.


So you're that age eh? :)

#14 glyn

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Posted 07 April 2009 - 08:18 AM

Ruud, reciprocity figures in human nature. That's the difference :)



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