FTC’s New Endorsement Rules: Trusting Blog Reviews

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Beginning on December 1, US bloggers and publishers who review products/ services/ websites must disclose any connection with advertisers, including, but not limited at, money, freebies, coupons, etc. The announcement was made on Monday by the American Federal Trade Commission (FTC). Bloggers and publishers who don’t comply with the new Guides may face penalties of up to US $11000.

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. Endorsements can appear on blogs in any form: reviews, give-aways, links, images, video, etc:

An endorsement means any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser.

The rules apply for all instances when a blogger/ publisher receives a form of compensation to review a product. Bloggers/ publishers who review product they purchased with their own money are not affected by these rules:

A consumer who purchases a product with his or her own money and praises it on a personal blog or on an electronic message board will not be deemed to be providing an endorsement.

Any situation in which a blogger/publisher reviews a product/service and receives compensation directly from an advertiser or from a third party (example the media agency representing the advertiser) falls under the guides:

In contrast, postings by a blogger who is paid to speak about an advertiser’s product will be covered by the Guides, regardless of whether the blogger is paid directly by the marketer itself or by a third party on behalf of the marketer.

Bloggers who receive free product to review them are not off the hook:

For example, a blogger could receive merchandise from a marketer with a request to review it, but with no compensation paid other than the value of the product itself. In this situation, whether or not any positive statement the blogger posts would be deemed an “endorsement” within the meaning of the Guides…

Sponsored postings on message boards and microblogs should also be disclosed:

Similarly, consumers who join word of mouth marketing programs that periodically provide them products to review publicly (as opposed to simply giving feedback to the advertiser) will also likely be viewed as giving sponsored messages.

The Commission believes that these rules are beneficial for the credibility of the bloggers/ publishers who comply. The consumers who trust them as reliable sources of information expect disclosures and full transparency; ensuring that advertising is truthful and non-misleading. To learn more details about the new FTC guides, read the full text here.

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Comments

  1. Sam says

    I think the FTC will work with other governmental agencies on this one, like the IRS for example. First they will go after the advertisers, and then they will see where on the blogosphere the campaign was covered and whether the bloggers disclosed their endorsements. If they didn’t a further investigation will be made and in the end, as a result of a court order, bloggers will have to pay the penalties. I also believe that they will enforce the policy. After all, we are talking money… it would be stupid not to go after the publishers and advertisers who don’t comply.

  2. Kelly says

    I won’t debate the FTC policy that bloggers receiving compensation for their endorsements should admit to being compensated. But I will point out that enforcing this law will be virtually impossible. There is no clear way to enforce such a policy in the social media blogosphere, especially when creating new profiles (with which to make new blog postings) is so incredibly easy and opaque. I sincerely hope the FTC was simply “sending a message” and doesn’t really expect to enforce this policy.

    • Phil Butler says

      Kelly, I do not think the FTC would get into this, spend money, time, and risk a huge PR Goofy just to send a message. They are already targeting blogs to fine would be my guess. This is not about just fines and making money for the FTC tho. I think if everyone will step back and see what is going on, a little bit more serious implications are involved.

      Always,
      Phil

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