The Feds To Push For ‘Truth’ In Social-Media Marketing

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The Feds To Push For ‘Truth’ In Social-Media Marketing

First it pushed the online ad industry to establish stricter standards around behavioral targeting; now, the Federal Trade Commission is moving to regulate social-media advertising. The FTC is planning to hold marketers liable for false statements published on blogs and social networks—meaning companies or bloggers could get sued for saying a product was good if it really wasn’t. According to the FT, ad trade organizations like the 4A’s are worried that such regulation will cause social media spending to grind to a halt.

The FTC is revising its guidelines for endorsements and testimonials for the first time since 1980; since companies are increasingly seeding discussion boards and social networks with comments from paid “brand evangelists,” and bloggers are making money off of pay-per-review blog posts, the FTC contends that these kinds of social-media campaigns should be held to the new standards. “Word-of-mouth marketing is not exempt from the laws of truthful advertising,” Richard Cleland, the assistant director for the FTC’s division of advertising practices, told the FT.

But in a letter to the FTC, 4A’s VP Richard O’Brien argued that the proposed regulations were too harsh—and that “bloggers and other viral marketers will be discouraged from publishing content for fear of being held liable for any potentially misleading claim.” The FTC would face its own challenges in proving that a given blogger or forum member outright lied, or that a brand paid them to do so. But O’Brien argues that the mere threat of legal action could spook advertisers already fearful of tapping social media, particularly at a time when social network marketing budgets are under pressure.

Photo Credit: jusamovebout

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Tameka Kee

@GeekyChic Apr 3, 2009 1:18 PM ET

Posted In: Advertising, Legal, Regulatory, Social Media, ftc

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I think that this is something that will become more of an issue, yet some believe that the focus will once again shift from "everyone is important because they have a voice", to a few "trusted sources" like years ago. I just think it will be delivered by new, upcoming journalists.

Stuart Falk

Here is an example of a major Web 2.0 site, Cruise Critic (part of the Trip Advisor division of Expedia), facilitating a marketing partner (RCCL) to influence user reviews.

From Jaunted (Conde Nast):

"Royal Caribbean Cruises Has Web 2.0 Viral Infection

"No surprise here: Royal Caribbean Cruise Line has a viral infection. For once, however, it's not the Norovirus but that new-fangled byproduct of Web 2.0, the viral marketing infiltration. According to Consumerist, a group of fifty "Royal Champions" was outed by their own creator, the Customer Insight Group, as being a successful project whereby frequent positive cruise commenting on sites such as CruiseCritic was rewarded with free cruises and other perks.
So what's the big deal? Well, it seems that the "Royal Champions" weren't always up front about their status as compensated reviewers, effectively misleading readers of CruiseCritic forums with their positive comments. Add to this the fact that CruiseCritic admins assisted Royal Caribbean in choosing the fifty, with one of the stipulations being quantity of posts, "with many having over 10,000 message board posts on various Royal Caribbean topics." From here, the hole just gets deeper.
Now that many RC fans feel slighted at not having made the ranks and most everyone else is disgusted at the covert trade of cruising for happy juicing, the trustworthiness of such forums is under fire.
Due to CruiseCritic's ownership by TripAdvisor, which is in turn under the Expedia blanket of travel sites, a viral marketing stunt gone awry could possibly continue to negatively ripple. Does news like this affect your ability to trust good reviews on travel sites, or do you already consider yourself an excellent shill-spotter enough to weed out the solicited from the unsolicited? While this whole ordeal is mired in serious muckety-muck, let's hope it serves as a lesson for future viral marketers and as an argument for transparency."

Blogs that Make Money

If they are going to come down on social media they had better do it to corporations that falsely advertise on network television or direct market in other areas too.

People don't know that almost half the advertisements on television in the United States breech a certain code of conduct and certain laws and they rely on people not calling them on it.

âWord-of-mouth marketing is not exempt from the laws of truthful advertising,â

and businesses with a large bank roll are? Word of mouth is powerful and it is most likely in my opinion that the competition is looking to eliminate the little guy since the little guy can bring down the corps. with word of mouth if they are a less than truthful company.

Adrienne Wallace-Hayward

Word of mouth marketing, behaviorial marketers and the savvy companies that do it are in for a whirlwind spin when the FTC gets its play on 'stricter standards'. The smarter marketers allow at most a specific demographic of opinionated consumers and they marketers moderate the messaging recieved to deliver the data that advertisers are looking for at any given time.

The marketers do not allow as much randomness as the FTC would like to think in fact the data capture fields tell consumers who the marketers and advertisers need them to be. So in many ways their opinions are always qualified.

There are instances where commentary will look immediate to the posting consumer, but the fact is that it is not always.

Heck some consumers , no make that millions of consumers will pay for a membership to a online community just to have their opinions about brands and services heard.WOM marketers are likely to move to models that generate revenue from both the consumer and advertisers side. Nothing wrong with that as it is what print media does now. Regulation of opinions is more a threat than a feasible reality. Bloggers and publishers will simply not participate in some platforms where they feel like there is too much legalese and government scrutiny. By virtue of popularity with readers, followers, and consumers they will draw the ads dollars no matter what. They will continue to do what a number of traditional mediums dependent on advertising. They will build content around where they see the add dollars, moderate comments to that effect and such. The internet is already too big to stop "false advertising." As one pin is knocked down another three pop up in it's place.

If Congress cannot impact or make law impacting or limiting the right a to free speech..why on earth would the FTC try or think that they could? contributors and bloggers will say what they want to say about products ( true or false) the same way they do about celebrities, politics, current events, etc. And as they want to attract advertisers the manipulation and introduction of advertorial formats will be much a part of what WOM is as much as it is now a part of the print world.

Policing is more for the manufacturers and make sure that the brands deliver on the claims of safety, results, and usability. Or is that what the Consumers Union is for? At the end of the day advertisers will jump into the social media pool no matter how many sharks are perceived in the water. The fact is that social media is part of the digital( mobile and online) divide and it is outpacing TV, print, and even other traditional mediums combines.

Folks are jumping in and nobody should be running scared.

Adrienne Wallace Hayward

http://www.linkedin.com/awallace
http://www.twitter.com/awallacehayward