Today is a new day. The FTC’s recent updates to its guides (“Guides Concerning the Use of Endorsements and Testimonials in Advertising”) for advertisers are now in affect. These new guides impact both users of social media and Brands.
To comply with the guides, individuals (bloggers, users of social media) must disclose every “material connection” or relationship they have with an advertiser. A material connection is one where the individual receives payment, product, demo units, goods, services, etc. from an advertiser. However, professional journalists do not disclose the free product, junkets, travel, meals, tickets, accommodations, etc. that they receive from advertisers. This double standard makes my head spin.
So, the rather loosely-defined guides are now in effect. The fine for failure to comply (up to $11,000 per infraction) can be applied to both advertisers and individuals.
Here is a quick overview of how to comply with the changes:
For individuals participating online:
- Disclose whenever you have a relationship with an advertiser, brand or company. This has specific implications for employees. You must make a disclosure if you work for Acme Widgets and you mention your employer, competitors, or the widgets industry in a blog post, tweet or elsewhere online.
- You must also disclose the name of your employer if you are commenting on a forum thread or in a group about Acme Widgets, the widget industry or about a competitor.
- Disclose when you have received any kind of product or anything of value from a Brand. You can be a fan but as soon as you’ve received something of value because you’re fan, a customer, or because of your social networks and activity online, you need to disclose the nature of what you’ve received.
So, how do you make a disclosure? It is very simple and need not take up much space.
- “I work for Acme Widgets.”
- If Acme Widgets flew you to South Carolina to participate in a customer golf tournament you might write: “I’m an Acme Widgets customer. Acme Widgets has paid for my travel to attend this conference and golf tournament.”
This disclosure is not much of a change for people accustomed to being transparent when using social media. It will require a bit more work and thoughtfulness on the part of social media users to make their disclosures. And of course, the ins-and-outs of how to do disclosure using short message services like Twitter are yet to be defined. Certainly for those of us who participate online, the effort is worthwhile to stay ahead of any fines or action from the FTC. Here at SMG, we fully expect the applications and methods used to manage personal disclosure to evolve as the Guides are applied to real-word situations. We also expect norms and best practices to emerge as the Guides are tested.
For Brands engaging fans and customers online, these Guides mean that the best practices for social media marketing advocated by organizations like WOMMA (Word of Mouth Marketing Association) are now policy. These Guides mean more work, discipline and process around social media operations. The FTC places equal onus on advertisers and individuals for compliance and fines can be issued to both parties.
If you’re an advertiser, a roadmap for your brand might look like this:
- Refesh your guidelines for employees participating online to include specifics about disclosure. Provide some concrete examples and make sure they know where to turn with questions.
- Review your blogger relations/digital influencer/fan engagement approach with your internal teams and agencies. Make certain that language with details about the requirement to disclose and where they can find factual information about your product is included in communication with these bloggers.
- The next step is to watch and ensure disclosure is being made by your campaign participants and that they aren’t make any false claims. You can accomplish this by monitoring, keeping an eye on and following up about disclosure for the participants in your campaign.
If you’d like to read further, I suggest you check out Andy Sernovitz’s thoughtful post, What do the “FTC Guides re: The Use of Endorsements and Testimonials Mean for Social Media Markters?.
WOMMA is currently requesting feedback on its proposed Guide to Social Media Disclosure. That guide is shaping up to provide “explicit best practices for social media disclosure”.
So far the reaction to these new Guides seems to be the online equivalent of a shrug. Advertisers and brands are certainly not shrinking away from social media campaigns in light of the new FTC Guides. So what do you think? Will these new FTC Guides really change anything?
Thanks for posting. Is there a Canadian equivalent guideline in the works?
Hi Craig – Thanks for your question. We don’t have any regulations like the FTC ones in Canada. However, the best Word of Mouth marketers abide by the WOMMA Code of Ethics regardless of geography. And for those individuals blogging and participating in social media, it has always been a best practice to disclose your affiliations regardless of your geography.
We are a Canadian company with many US clients. Does this legislation include companies like ours? We will of course comply, but I have to ask how much power would the FTC have to enforce this law upon foreign entities? As for a Canadian equivalent (previous comment) I am not aware of any such law in place or in discussions in Parliament, so I too, am interested if you know of any. Thanks for explaining this to us in lay terms.
Co-Host of http:///www.DivorcedDadWeekly.net
Hi Heidi – While I’m not a lawyer, I would suggest that if you’re a Canadian company doing business in the U.S. and establishing material relationships with people online, you comply with the FTC Guides. While you may not expose your own business, you may expose the individuals you’re engaging in your campaign or your clients. I think it is going to be easiest for brands to adopt a disciplined approach to asking participants in campaigns to disclose and monitoring to make sure your campaign participants are complying and not making false claims.
Your article made me think about how disclosure is a difficult issue for Twitter users. With 140 character maximum in each Tweet, space is at a premium.
So, I wrote this blog post proposing one possible solution:
Introducing Twitter-disclosure Slashtags