Advertisers in the US are bracing themselves for regulatory changes that they fear will curtail their efforts to tap into the fast-growing online social media phenomenon.Check it out, a curious article. I hope something comes out of this move by the FTC — it's about a decade overdue.
Revised guidelines on endorsements and testimonials by the Federal Trade Commission, now under review and expected to be adopted, would hold companies liable for untruthful statements made by bloggers and users of social networking sites who receive samples of their products.
The guidelines would also hold bloggers liable for the statements they make about products.
If a blogger received a free sample of skin lotion and then incorrectly claimed the product cured eczema, the FTC could sue the company for making false or unsubstantiated statements. The blogger could be sued for making false representations. [...]
Advertisers have significantly increased spending on social media and word-of-mouth campaigns, even during the recession. Through blogs and services such as Facebook and Twitter, companies are able to communicate more directly with consumers. Spending on social media marketing [read: shilling] reached $1.35bn in 2007 and is expected to reach $3.7bn by 2011, according to the Word of Mouth Marketing Association.
The advertising industry has argued that the revised regulations are too stringent and would stifle innovation in the emerging field of social media. It remains in favour of self-regulation. [yeah right] [...]
“The guides needed to be updated to address not only the changes in technology, but also the consequences of new marketing practices,” said Richard Cleland, assistant director for the FTC’s division of advertising practices. “Word-of-mouth marketing is not exempt from the laws of truthful advertising.” [tell this to Jeff Bezos]
The main target of the new guidelines appears to be the widespread practice of viral marketing in which companies recruit non- employees to talk up products in exchange for samples or promotions. [See our list of Our Friends Top Reviewers below]
Companies regularly offer free samples and concert tickets to bloggers and journalists, in the hope of generating press. However, determining which bloggers are acting as an agent of a company may prove difficult.[no kidding! They "forget" to mention themselves, and how would you know otherwise? LE Cantrell likes to push this point.]
Thursday, April 2, 2009
Enter FTC: end of Amazon "reviews" system as we know it?
Turns out what we call shilling has a politically correct, scientific-sounding name: viral marketing. So, Harriet Klausner, Morris, Gunny, W.Boudville, et al. are not shills, they're viral marketeers. OK. There's a curious article in the Financial Times, Advertisers brace for online viral marketing curbs, check it out:
Posted by Malleus at 4/02/2009 06:59:00 PM