experience matters

In Jan 2009, the FTC released proposed guidelines for marketing in social media. The FTC understands the role and influential impact of social media marketing and wanted to update its 29-year old guidelines to reflect this understanding. WOMMA worked directly with its members and the FTC to submit feedback and shape these guidelines which were released, in the form of a 100 page document, on Monday, October 5. They will go into effect on December 1, 2009.

These guides can be used by any law enforcement agency or consumer class action cases. Because other legal avenues can use these guides, no party is too small to be caught and fined.

Highlights

• Any sponsored communication is subject to regulation.

• Any relationship between blogger and advertiser must be disclosed i.e. a blogger must identify when he is speaking on behalf of an advertiser. The FTC equates an influencer who has been given consideration to a paid review or review by an employee

• Any kind of consideration that goes from an advertiser to the blogger must be disclosed. This includes cash payment, gifted product or service, and likelihood of future receipts of compensation or products/services.

• Celebrities must disclose their relationships with advertisers when endorsing products outside of traditional advertising, including blogs and twitter feeds. Other examples include talk show and other public appearances.

• Performance claims must represent typical results and have supporting evidence. Safe-harbor disclaimers like “results may vary” will no longer satisfy these guidelines.

Industry Impact

Enforcement

The FTC maintains a database of complaints from consumers, better business bureaus, and competing brands and organizations. Rather than a policing or surveillance model, the FTC relies on these communities to report non-compliant behavior.

Liability for misleading and unsubstantiated statements falls on all parties –advertisers, advertising agencies, and endorsers. However, the FTC has outlined that advertisers should advise endorsers to make necessary disclosures.

Impact on Consumers & Marketers

These regulations formalize a set of best practice guidelines which have been loosely established in the influence marketing community. Having these guidelines supported with the authority of the FTC brings value to the consumer who looks to these community influencers for product and service advice. The biggest impact for marketers is that they bear the burden of this new liability. They will need to implement a rigorous selection process for engaging influencers, and generally be vigilant about policing their social media campaigns. The new rules will add credibility to marketers who are compliant, and arm them with an avenue for enforcement for their non-compliant competitors.

Recommendation

Brands should address the disclosure issue early and often –at the onset of a blogger relationship and as a part of regular ongoing communication. An ounce of prevention is worth a pound of cure. Disclosure is easy; some may argue disclosure is easier than deception. It can be one sentence, as little as four words “x gave me y”. What’s changed is that now full disclosure is a requirement instead of just being the right thing to do. Outside of formalized influencer relationships, brands can’t control what people say, but we can proactively find it and deal with it through monitoring and community management. Make sure to update new guidelines in the existing legal docs, including:
1. Employee social media guidelines
2. Post compliance statement in all branded/sponsored communities
3. Update style guides and rules for community managers & PR
4. Monitor for crisis management
5. Paid media terms and conditions/contracts

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