Disclosure & It’s Affect on the Brand Marketing Ecosystem

October 19th, 2009

We have all heard a lot about the Federal Trade Comissions’ (FTC) latest policy on the expectation for full disclosure on endorsements and paid reviews or testimonials.  But, how much do we really know about it and how will it affect all of us who are in the business?  That is the focus of this week’s #socialmedia event moderated by C.C. Chapman. 

To start, you can review the document for yourself and develop your own interpretation of it (it’s actually an update to it’s guides, not a law, and therefore open to some interpretations) as it was announced earlier this month.  Next the rules will be enacted on December 1st so anything being done now is not covered in this under the new guides.  More, while we have all read about the $11,000+ fine, this fine is only enacted after several warnings and for serious offenses as noted in this interview with the FTC from the LATimes:

When a LA Times reporter asked about Restaraunt Reviews, the answer was, “Technically, you’re supposed to disclose all comped meals. But if you don’t, the FTC’s not likely to do anything about it.”My initial reaction to that scenario [comped meals] is that disclosure would be required,” says Rich Cleland of the FTC’s Bureau of Consumer Protection. “Our primary concern relates to the fact that you received something of value and it’s for the exchange of writing about the product.”

So is this a conspiracy theory that gives ”big brother” yet another way to find out what my top ten social media blunders post is all about?….probably not as they really don’t care.  What it does do is provide a vehicle for them to be able to pursue the really bad people out there and have some teeth in the punishment.  Read their take on this issue of monitoring (from the same LATimes article),

“But the FTC has a limited interest — and ability — in monitoring blog traffic. According to Cleland, the FTC is far more interested in pursuing advertisers, especially those who violate the rules after repeated warnings, than they are in dunning individual bloggers. Unless the FTC receives numerous complaints about a specific blog, it’s unlikely to investigate. It’s a matter of enforcement priorities.”

And how does the FTC decide who to go after?  It looks like it will be more of an “opt-in list” meaning they already get inquiries from citizens on publishers (bloggers) who are possibly scamming.  they will still filter for the more detrimental publishers and go specifically after them.  In their words:

“If we received complaints,” Cleland says, “we’d look at how serious the representations are. Are there other possible violations? What kind of blog is it? We might be more concerned about a blogger who was writing a review of a medical device that’s used for a serious disease than we would be about someone who’s writing a restaurant review.”

So if the new FTC guidelines are really just meant for the true scumbags out there then what’s all the hub-bub about?  This goes deeper into the expectations that consumers have where honesty and disclosure are now a ”need-to-have” and no longer a “nice-to-have” for reviews, promotions and endorsements.  These new guides begin to shine a light on all marketing relationships and will have serious affects for Brands who try to fool their consumers.  While some may say this officially shifts the responsibility of disclosure from the advertisers to the publishers, what is really does is says that everyone is accountable – the advertisers and the publishers.  Not longer can we stand around like school-children and point fingers at each other saying “she did it”!  We are all responsible and accountable.