The Federal Trade Commission’s new guidelines on endorsements and testimonial advertising took effect Tuesday. The update to the 30 year-old guidelines is primarily intended to make explicit how these rules apply to media such as blogs and Twitter that didn’t exist in 1980.
When the revisions were first announced in early October, there was widespread outrage among bloggers and users of new media. The FTC has since been trying to put out the fire, pointing out that rumours of $11,000 fines for bloggers who forget to disclose something were unfounded. All the guidelines do, the FTC has argued, is bring new media in line with existing rules that apply to everyone.
Unfortunately, that last part simply isn’t true. The biggest complaint about the new guidelines is that they threaten online reviewers who receive free products, a practice which is ubiquitous in old media. Whatever the FTC says, this is not a paranoid delusion; it is an explicit provision of the guidelines.
A book reviewer for, say, the New York Times does not, of course, spend a small fortune on books every year; she gets them all for free. Travel writers for print publications go on all-expenses-paid trips all the time — complete with extended vacations, sometimes including their family. The FTC is apparently fine with this.
Consider, by way of contrast, this example from the new guidelines:
A college student who has earned a reputation as a video game expert
maintains a personal weblog or “blog” where he posts entries about his gaming
experiences. Readers of his blog frequently seek his opinions about video game hardware
and software. As it has done in the past, the manufacturer of a newly released video game
system sends the student a free copy of the system and asks him to write about it on his
blog. He tests the new gaming system and writes a favourable review. Because his review is
disseminated via a form of consumer-generated media in which his relationship to the
advertiser is not inherently obvious, readers are unlikely to know that he has received the
video game system free of charge in exchange for his review of the product, and given the
value of the video game system, this fact likely would materially affect the credibility they
attach to his endorsement. Accordingly, the blogger should clearly and conspicuously
disclose that he received the gaming system free of charge.
That this relationship is ‘inherently obvious’ to the FTC only when the review appears in print is a result of its technophobia, not a reflection of an actual difference between the media. Wherever you read a review, there should be a reasonable expectation that the reviewer may have received the product for free, because being reviewed is good publicity.
People who sell things often give them away to reviewers to increase the chances of their products being reviewed. To deny that there is any conflict of interest here would fly in the face of everything we know about human psychology. But it is a pretty good system that has always worked, and bad reviews are written all the time. The Internet and new media have done nothing to change that equation.
If the FTC thinks each of these review copies should be disclosed, they are misguided; the system is well-understood, and disclosing it would be a repeated waste of ink (and pixels).
But no matter what, the same rules should apply to old and new media alike.
Business Insider Emails & Alerts
Site highlights each day to your inbox.