Get the most out of your Inc. online experience by registering and joining the Inc. community today. Get access to all Inc.com content and priority invites to free Inc. networking events in your area.

Login using:


Or login directly through Inc.com

Business Bytes
October 6, 2009

FTC To Crack Down On Blogger Payola

 

Good!

(((Pause)))

Oh, sorry! That was all the reaction to that headline that I felt was necessary. But, you probably want to hear more.

Here goes.

The Federal Trade Commission has announced new guidelines to crack down on undisclosed compensation for testimonials and endorsements. The guidelines are not new. They just haven't been updated since 1980. Yipes! It has changed a bit since then.

The FTC specifically targets bloggers and other "word of mouth marketers".

Here's what you need to know:

1. When a blogger accepts cash or free products from their subjects, it's considered a paid endorsement.

2. Paid endorsements have to be disclosed in the posting.

3. This includes having a company send you a free laptop, so you can review the laptop and then you conveniently keep it afterwards.

4. If you don't disclose to your audience, you can face fines in the five figure range.

5. If one of your readers is mislead by your posting (without disclosure) to buy a lousy product and they get ripped off in the process; then they can come after you for damages.

I like this part even better and I see it all the time, especially in tech studies, surveys, polls, etc.

Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization
.

- FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising

In other words, good!


Renee Oricchio

Renee Oricchio is a technology writer and former supervising news producer for CNN Financial News. She has been covering the computer industry since 1987.