The FTC issued an official opinion stating that people who endorse of a products, and who are compensated for their efforts, must disclose the nature of that relationship to their “customers”. While its not a law per se (as far as I can determine), sometime in the future, persons or companies in violation of this position might be the target of cease and desist orders or civil fines in the order of millions of dollars.
Yikes.
With the rise of social media, “Word of Mouth” marketing has come to the forefront with regards to marketing messages and firms salivating at getting their messages through blogs, social networks and social bookmarking sites. While it looks like some agencies are “getting” it, by getting genuine consumer participation, interaction and cooperation through these technologies, others are taking a ‘black hat’ at these social media methods.
Whither through the creation of fake personalities, fake blogs, or paying people on the sly to shill your product, all of these techniques are at their heart, duplicitous. And its the last of those that are the target of this FTC statment.
In the blogosphere, one of the most obvious stakeholders in all of this is PayPerPost, who currently doesn’t require its bloggers to disclose that they are blogging on behalf of an advertiser; clearly, this is a violation of the spirit of this opinion. If it goes any more beyond an official “statement”, we can look to PayPerPost to evolve into a more disclosure-minded model, such as ReviewMe. Although with its efforts behind disclosurepolicy.org, a web tool that allows people to create a disclosure document (with varying degrees of accuracy), its a bit baffling why they simply don’t go all the way and force their bloggers to sign up and their advertisers to agree.
The industry which may not as obvious (at least to the technosphere) is the affiliate marketing industry which is responsible for moving billions of dollars worth of e-commerce by itself. While there has been much talk about the necessity of disclosure with outfits that directly affect blogs, there has not been a similar discussion within affiliate marketing — probably because it predates PayPerPost and its ilk by … oh, seven or eight years.
One of the biggest examples of affiliate marketing is the Amazon Associates program; like many other affiliate programs, the Amazon pays its affiliates when they refer people to their site, and those people purchase its products. The controversy comes in, as I see it, when enterprising individuals create websites or blogs full of content to rank on a search engine, and then embed them with affiliate links … that are not identified as affiliate links.
A great example is carbuyingtips.com, which looks fairly innocuous at first. But beyond all the helpful information are clues to how carbuyingtips.com pays its bills (and more)
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