Proposed Application of Endorsement Guidelines to Blogging Raises Concerns
While the Federal Trade Commission (FTC) considers comments submitted by stakeholders to its proposed advertising endorsement guideline amendments, industry and blogging interests have reportedly expressed concerns about their ambiguity and suggested that voluntary ethical standards would best police the practice of “social media marketing.”
The FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, last updated in 1980, if applied to bloggers who are paid to endorse products or services, would require bloggers to substantiate their product performance claims without specifying the proof needed to satisfy the claim. The amended guidance would also require disclosure of compensation arrangements, ranging from product coupons and cash payments to free products or services and pay-per-click links to sites that sell the product.
According to a news source, if the guideline amendments are adopted later in 2009, violators could face FTC stop orders, restitution to customers or civil penalties. See The Associated Press, June 21, 2009; ABA Journal, June 22, 2009.
In a related development, a recent survey of 500 marketers found that nearly two-thirds plan to increase their budgets for social media marketing in the second half of 2009. The survey reportedly indicates that marketers believe the ability “to communicate relevant messages within social networks is critical to a business’ success in the medium.” See Center for Media Research, Research Brief, June 24, 2009.
