FTC on Deceptive Word of Mouth Marketing

The FTC had been asked to look into the practice of “buzz marketing” by the anti-advertising group Commercial Alert. In response, the FTC issued a staff opinion (pdf) yesterday that could effect how business is done online. The practice in question is paying a consumer of a product to make claims about that product. While the FTC didn’t think there was any need to add any new guidelines, they feel that word of mouth marketing could not use deceptive practices and each complaint could be handled on a case-by-case basis. Basically, it boils down to people endorsing a product without consumers being told up front that they have been paid to promote the product.

This has some real consequences for doing business on line. Services like PayPerPost, which pay bloggers to write about products without requiring a disclosure, will need to change their practices. Even if an individual blogger writes about a service and includes an affiliate link, I could imagine this could be considered a “deceptive” practice. Jason Calacanis has also recently been looking into claims that some PR firms are paying top Diggers to vote stories up. I could see this falling under this general area as well.

It has always been my policy on this blog that if I have any type of paid review or affiliate link, I will clearly mark it as such. Obviously going forward, this will be a good practice for everyone. Full disclosure has always helped earned the trust of readers, and now it may also keep you out of trouble with the FTC.

I first read about this at CopyBlogger.
Read more: Washington Post Article, Word of Mouth Marketing Association press release

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