The FTC recently rolled out updated guidelines for online marketing. That was quick. An industry that brought word-of-mouth marketing into the digital era now has to deal with the repercussions of moderating their online presence for the purpose of spreading the word about a product. This effects bloggers (certain Mommy Bloggers in particular), celebrity endorsements and others. What the new FTC guidelines essentially aim to do is bring more established standards from offline marketing methods and publications (television commercials and journalism) to the online world.
The FTC has updated guidelines focus primarily on the disclosure of certain information regarding a product, including an advertiser’s use of testimonials from those that have used the product. The FTC has specifically addressed its Guides Concerning the Use of Endorsements and Testimonials in Advertising, looking to ensure that a product is being represented properly to consumers. See the full version of the new guidelines here.
Back in 1980 the FTC ruled that brands using testimonials was acceptable, but if their description of the use of a product was not typical, it had to be disclosed as such. In the world of blogging, we’ve moved far away from this, an brands are taking full advantage of the Wild West of word-of-mouth marketing an influencers’ endorsements.
If a blogger or endorser is providing a review or testimonial of a product, they must disclose that it is a sponsored article if that is the case. Advertisers and brands that reference these reviews or testimonials must also disclose if they acted as a sponsor.
Admittedly, this could change a good portion of the online industry’s ability to leverage social media outlets for the digital version of word-of-mouth marketing. Heavily defining the relationships between brands and bloggers means that everyone will need to pay better attention to the social media services they employ to discuss the very use of brands’ products. Those brands that utilize automated forms of endorsements (i.e. Facebook ads for their product featuring your friends’ face or a Twitter update raving about the new service they signed up for) also come into question for these marketing methods.
For online marketing, however, both advertisers and website publishers rely on a certain level of digital word-of-mouth for the purpose of building brand recognition. Product review and personal recommendation sites should be especially concerned with the updated FTC guidelines, as they could interfere on a more direct level with their tactics for expanding their reach and leveraging larger networks such as Facebook and Twitter.
As many companies and brands look to turn every consumer into an authority in their area of interest, they also expect those consumers to return the favor by talking about their product online. Encouraging this behavior is a big money-maker for social media outlets, and is a primary aspect of monetization potential around online networks.
Ultimately I think it’s a good thing that the FTC is taking a little more control over how products are conveyed to consumers reading blogs and social networking profiles. In the end brands and bloggers will find that a more genuine approach could still pay off, and the other personally non-identifiable information could be utilized to provide the contextual recommendations that lead to actual word-of-mouth marketing for a given product.