FTC to Bloggers: Disclose Payments or Face $11k Fine

Bloggers: have you accepted a product freebie from a brand? Are you sending out “sponsored tweets” as part of a promotion? PR and marketing pros: are you working on a “word of mouth” campaign of your own? If so, you’ll want to read carefully updates announced today by the FTC to its Guides Concerning the Use of Endorsements and Testimonials in Advertising. The key takeaway, highlighted by Mashable’s Adam Ostrow: “bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.” And what happens if you fail to disclose? A fine of up to $11,000.

Former mediabistro.com editor-in-chief and current contributing writer and columnist at Fortune magazine Elizabeth Spiers thinks the new rules would ruffle feathers if applied to “actual journalists.” If this were enforced with them, “I know a lot of people who’d be out of a job and/or deeply in debt to the FTC. At lifestyle magazines in particular, freebies are often the norm, not the exception. (I don’t think that’s the way it should be, but that’s the way it is.),” she said.

It’s going to be hard to police, said CNET’s Caroline McCarthy. “There are a lot of bloggers out there, not to mention a lot of different kinds of bloggers, and a lot of marketers.”

The news comes on the heels of IZEAFest, the annual conference of IZEA, a company which dubs itself as “the world leader in sponsored conversations.” David Binkowski, SVP, Word of Mouth Marketing at Manning, Selvage & Lee was a speaker at last week’s IZEAFest. In a PRNewser interview from this past June that addressed the topic, he said he personally doesn’t work for IZEA, and that at MS&L, “we do not pay for blog posts unless the bloggers have been hired to write on behalf of a client’s blog. Our firm’s roots are in earned media and the online extension of our practice is no different.”

UPDATE: Jeremiah Owyang, formerly of Forrester Reserach and now a partner at the Altimeter Group told us that he thinks “it’s a great idea that the FTC mandated this, the questions is where do the lines start and stop?” It’s really hard to tell, he said, citing examples such as, “I sure like Pepsi, Disclosure: I received a free bumper sticker at SXSW two years ago in Austin that I threw away.” That brings up the whole world of celebrity swag, prevalent at many conferences, award shows and events. We asked Jeremiah if this will be like a speed limit law of 65 m.p.h. where you really only have to be worried about getting pulled over if you’re doing 90, to which he said, “I think the community will police itself. The community will call people out, not necessarily the FTC.” See Jeremiah’s post, “A Running List of Sponsored Conversations.”

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