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October 16, 2009

FTC Responds to IAB Letter on Blogger Guidelines

Yesterday the Interactive Advertising Bureau took a jab at the Federal Trade Commission's revised guidelines on online endorsements. Put simply, the guidelines call for online reviewers to disclose payment or affiliation with marketing campaigns or advertisers.

The way the IAB sees it, the FTC is unfairly favoring traditional media over digital media. In a letter sent to the FTC chairman, IAB prez Randy Rothenberg contended the FTC's call for disclosure of "material connections" between advertisers and endorsers in social media platforms will "shackle online media while exempting our offline cousins and competitors from equivalent constraint."

"I don't think that there is any favoritism based on the type of media," Rich Cleland, assistant director of the FTC's division of advertising practices told ClickZ News this morning. "The core here is do consumers understand the relationship that exists between the speaker and the seller." "Offline, if those lines are blurred, then there's a problem," he continued. "These are not new issues."

As iterated throughout his lengthy letter, Rothenberg and others fear that the FTC will now be on the hunt for bloggers reviewing and endorsing products, which he argues will squelch social media.

"In terms of bloggers and other endorsers...I don't think that there is any reason for concern," said Cleland, stressing, "We have explained on a number of occasions that we do not have civil penalty authority." In other words, he told me, the FTC is not planning an enforcement sweep against bloggers. Also, he confirmed, the FTC has no authority to fine anybody (despite countless erroneous reports to the contrary).

The IAB also suggested that the FTC guidelines are "perverse" and "constitutionally dubious," stating they imply "individuals writing in social media bear greater liability than do those writing for offline, one-way media."

"It's not clear what exactly the IAB thinks the constitutional issue is here," Cleland said. "The guidelines are in fact just guidelines and to the extent that they focus on [misleading] commercial activity and practices that are essentially promoting products in exchange for payments or free merchandise...we don't think that there's a constitutional issue."

As for the public hearing the IAB wants the FTC to hold to hash out the concerns, Cleland said, "We haven't made any determination on that.... We've already taken comments on this issue." Still, he added, "We don't want to preclude that we might do something in addition to [the comment period]."

Posted by Kate Kaye at October 16, 2009 12:39 PM

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Interesting indeed!

I covered the initial story on 10/5 and shared similar sentiment with the FTC, less formally however. The FTC did respond however and I think you might appreciate their position:

When asked if the FTC views bloggers equally and whether or not it recognizes levels of authority on par with traditional media, Mary Engle, Associate Director for Advertising Practices, clarified its position and perspective, “All bloggers aren’t the same and we are not saying that all bloggers are marketers. Most of them are ordinary folks musing or sounding off. The question as we put it in the notice we published today is whether, viewed objectively, the blogger is being sponsored by the advertiser. (We list a number of factors to consider.) Independent product reviewers, whether offline or online, would not be viewed as sponsored by the company whose products they are reviewing.”

Engle further observed the distinction between expert and consumer bloggers, “But if bloggers regularly receive free products from a company, the blog audience might view their reviews differently than if they went out and bought the products on their own. Under those circumstances, bloggers should disclose they got the products from the company. This is consistent with the WOMMA code of ethics. And, companies who use bloggers to generate buzz about their products by sending free merchandise should have a policy that their bloggers should disclose.”

http://www.briansolis.com/2009/10/ftc-values-sponsored-posts-at-11000-apiece/

Brian Solis October 19, 2009 3:09 PM

October 16, 2009

FTC Responds to IAB Letter on Blogger Guidelines

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