FTC determined to root out payola in the blogosphere

US Coins Collection Isolated on WhiteI confess: One of my largest clients manufacturers and sells safety equipment, and I’ve been known to blog (on my own blog) about the importance of having safety equipment in the workplace — without mentioning that I have an association with that company.

By the end of the summer, this sort of unethical behavior will place me squarely in the sights of the Federal Trade Commission. FTC guidelines regulating blogger endorsements are about to go into effect.

According to this story published yesterday by the Associated Press, people using the internet have no idea that the posts they read on blogs are anything less than objective, and that “Many bloggers have accepted perks such as free laptops, trips to Europe, $500 gift cards, or even thousands of dollars for a 200-word post.”

Thousands of dollars for a 200-word post? “Many” bloggers? (I checked the URL to see if I had somehow been redirected to The Onion. I had not.)

But wait! The AP article drivels on:

Savvy consumers often go online for independent consumer reviews of products and services, scouring through comments from everyday Joes and Janes to help them find a gem or shun a lemon.

(Would someone please turn off that loud alarm? I’m trying to write.)

Savvy consumers? No, savvy consumers are consulting Consumer Reports, CNET.com, and the consumer comments posted on Amazon.com and Zappos. The people basing major purchasing decisions on a post from Joe-the-Blogger are not savvy consumers but nincompoops, and, to be blunt, they deserve what they get.

The reaction to the AP story from the blogosphere has included widespread incredulity, particularly from people who actually work in the intersection of blogging and marketing. I particularly liked this summary from James Joyner of Outside the Beltway.

To begin with, what company is going to pay a low-level blogger “thousands of dollars” for a product endorsement? And they will be paying a low-level blogger because top-level bloggers don’t accept payola. They don’t accept it, mind you, not because they are all honest but because the blogosphere is a place where unscrupulous behavior has a way of catching up with you. In spades. Imagine these scenarios:

1. Jane-the-Blogger recommends that people abandon their trusted backup software and switch to new Brand X backup software. People follow her advice, and Brand X Backup corrupts their  hard drives. They post angry descriptions of their experiences with Brand X on their own blogs (mentioning Jane’s blog), so that people Googling Jane’s blog find instead a lot of unflattering reports about it. And they post their experiences with Brand X on reputable tech sites, as well. In return for the amount Jane has received from Brand X’s payola department, she’s now forfeited her own blogging credibility, and lost traffic to her blog.

2. Company Z sends Joe-the-Blogger a fancy piece of technology to review and says “go ahead and keep it.” He does. He tries it, is unimpressed, and doesn’t blog about it. The company has achieved…what? I’ve represented clients who do PR campaigns to bloggers, and send out product samples, and they do not waste expensive products on shots in the dark.

While it seems simple for the FTC to require a blogger praising a product to disclose that they have received the product or service for free, or that they receive a percentage when they link to a sales page for the product, the situation gets far more complicated in practice. Try these scenarios:

1. I hear about an interesting new service, call the owner, and write a blog post about it, which generates a lot of buzz. The owner calls me a week later, thanks me, and provides me with some insider tips and connections for a story that I go on to write and sell to a publication for $1,000. Do I go back and amend the original post to reveal this?

2. I attend a conference (for which I pay full fee), and later write a blog post describing the conference and recommend that my readers attend that conference next year. However, I don’t mention in my post that I was a speaker at the conference, and that as a result of my speech I made some important business connections at the conference. Is it possible that the conference, by offering me the speaking opportunity, was in effect “bribing” me to write a positive story about their conference? Should I bring this up in the blog post?

My answer to these questions is, I’m afraid: Oh, good grief.

Full disclosure: Neither the FTC nor the Associated Press offered me any payola to review, respectively, their regulations or their coverage of this story. I endorse neither. They did provide a nice boost to my blog traffic after I was interviewed on KUOW-FM‘s The Conversation  yesterday about the new regs. However, I’m almost positive that boost was inadvertent.

6 responses to “FTC determined to root out payola in the blogosphere

  1. I’m glad you wrote this post. I disclose – I feel like it’s important for me to do so, but I know LOADS of bloggers that don’t.

    One blogger told me it would “ruin their reputation” if they disclosed about what they get for free. Um. Uh. I really didn’t know how to respond to that.

    I’m with you. Good grief.

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  2. Blogging is in its infancy compared with most other types of publications.

    I think payola is an important issue because it ultimately undermines the credibility of the blogosphere.

    Would you feel comfortable if I told you that some of the newspaper articles you were reading were “sponsored” by an advertiser?

    Given the current economic situation, making money on the Web is anything but a black and white issue. The bloggers who behave in an ethical manner will likely rise to the top.

    Ultimately, a code of ethics needs to be adopted that addresses these concerns. If bloggers don’t do it, the government will.

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    • Would I feel comfortable if you told me that some of the newspaper articles you were reading were “sponsored” by an advertiser?

      Well, relatively comfortable. Not particularly happy about it, but relatively comfortable. Because many newspaper articles are sponsored, and have been for years.

      With the exception of papers like the Wall Street Journal and The New York Times, papers routinely publish stories that are the results of junkets, guided tours, PR events disguised as conferences…and on it goes. Feature writers get press passes to attend expensive events free (and get front row seats). Editors assign reporters to cover arts events given by organizations on whose boards the publisher’s family sits.

      The difference between sponsored articles in newspapers and sponsored articles on blogs is that the newspaper is usually the only show in town — you don’t have a choice of which one you read for local coverage. With blogs, on the other hand, there’s plenty of choice and you can simply ignore those blogs whose opinions you suspect have been tainted.

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      • To quote your last sentence:

        “…you can simply ignore those blogs whose opinions you suspect have been tainted.”

        It’s this “caveat emptor” approach that’s drawing the FTC’s attention and giving the blogosphere a bad name. It’s entirely up to the reader to determine whether the information is really a paid ad. The likely result, is that people will be over cautious at the expense of not reading some legitimate blogs.

        Ideally, people should know when the content they’re reading is basically an advertisement.

        While the definition of “sponsorship” may vary, I disagree with the notion that articles regularly appear in the newspaper as a result of someone “paying” for it to appear there.

        There are gray areas like junkets and conference fees etc., but taking money in exchange for content placement and not disclosing it is unethical. This is so whether it’s done by a newspaper, a blog, or any other type of publication.

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  3. Pingback: Misguided FTC blogging guidelines·

  4. B2B Editor

    I agree completely that “There are gray areas like junkets and conference fees etc., but taking money in exchange for content placement and not disclosing it is unethical. This is so whether it’s done by a newspaper, a blog, or any other type of publication.”

    But I think the FTC’s enforcement plan will catch very few of the people who violate the ethical standards (they’ll simply move to non-US-based blogs) while frightening, censoring, and silencing a lot of very ethical online writers who would rather not tangle with the federal government and and risk incurring the expenses of being investigated or unjustly accused.

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