The Federal Trade Commission has revamped its guidelines concerning endorsements to take account of the new boom in social marketing, blogger endorsements and word of mouth promotion. But those updates — the first the commission has produced since the 1980s, when “blogging” was just a nonsense word — have raised the ire of several trade associations representing marketers and created confusion for brands that want to use bloggers to get their products and services out into informal online conversations.
The FTC says it wants to extend to digital communication the same user protections it enforces in offline advertising: namely, to make sure that consumers know when a commentator or content creator has a “material connection” to the marketer. Though most marketers don’t control what is said by the bloggers they enlist in their promotions, the FTC says, just the fact that they’re offering these bloggers benefits — even in the form of samples or review copies — must be made clear starting Dec. 1, 2009.
Both the bloggers and the advertisers could be held liable for failing to disclose these links.
At the simplest level, the rules say bloggers must disclose when they are employed by an advertiser or by some third party that would benefit, such as a marketing agency.
But getting free products can also constitute material connection in some cases. The FTC will require that bloggers reveal those connections, and that brands and agencies monitor the bloggers they use in social marketing and set policies for handling matters when disclosures aren’t made.
The guidelines don’t specify what dollar value triggers the “material connection” rule. Legal experts agree that no one will get busted for praising a free sample of a new chewing gum, for example. However, sending a new video game to a college-age blogger could be valuable enough to require disclosure.
Expectation of future benefit could be another trigger: A blogger who reviews a sample of hair conditioner in the hope of receiving a six-month supply would also have to disclose the relationship.
The FTC has been gathering public comment on the guidelines for months, but that didn’t prevent some groups from objecting to them. Randall Rothenberg, president and CEO of the Interactive Advertising Bureau, objected that the new rules “shackle online media” with constraints that offline media don’t have to abide by. He called for public hearings on the regulations.
Others complain that by simply listing examples of wrong blogger behavior without providing firm rules, the FTC has made compliance more confusing for brands.
“There are huge gaps in those examples,” says lawyer Linda Goldstein of Manatt Phelps & Phillips, which represents the Promotional Marketing Association and the Electronic Retailing Association, among other clients affected by the rules. “Companies want to comply, but they are very nervous. I think it’s going to be really challenging for marketers.”
GROCERY-SHELF TRENDS
Consumer trend watcher Mintel foresees a handful of trends in the marketing of packaged goods in the coming year. Among them:
- Swapping confusing calorie information for clear, clean data on the front of packages
- A more practical and affordable “local food” trend, centering on country of origin
- Color-coded packaging to cut through shelf clutter and make goods easier to find
- More promotion around low-cost, high-quality store brands
- Simpler, easy to use cleaning products for the Gen Y audience
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