Thoughts from Ciana

  • 07:49:49 pm on April 7, 2009 | 0

    VIRAL MARKETING REGULATED BY FTC?  IS IT TIME?

    Disclosure, transparency, and authenticity have always been important ingredients in product reviews, whether online or not. For the first time since 1980, the FTC is reportedly revising its rules on advertising and planning to make bloggers and companies legally liable if they make untrue statements about products or services – “meaning companies or bloggers could get sued for saying a product was good if it really wasn’t,” according to paidContent.org.  A recent article in the Financial Times adds “The main target of the new guidelines appears to be the widespread practice of viral marketing in which companies recruit non-employees to talk up products in exchange for samples or promotions.”

    (Full disclosure: I have not read the FTC’s proposed legislation, so I don’t know the full impact.) David Meerman Scott blogs about this topic and social media seeding practices (companies putting product into the hands of influential bloggers in exchange for reviews) and raises interesting questions. Does the price of the item matter? Should bloggers be hauled away in handcuffs?

    Legislation should not be a substitute for common sense, or ethical communication practices.  But if businesses and individuals do not adequately disclose receipt of “free products or services” in exchange for a review, or worse yet, if they intentionally make untrue statements, in my opinion they should be held liable. Hopefully these regulations will not stifle freedom of opinion and valuable content to help aid buyers in their decision process.

    I have found user generated reviews (whether they be for products or services) to be immensely valuable as a consumer. When I bought a new digital camera (Panasonic Lumix DMC-TZ5K), I relied on product reviews (and user ratings). When I planned a family excursion last year to Southern Italy, I relied heavily on reviews and recommendations from other travelers. In a related article in Sunday’s San Francisco Chronicle, “Why you can’t trust user generated Web site reviews”, travel journalist Arthur Frommer indicated that he had removed “Reader’s selection” from his guidebooks years ago because of manipulated content (posed as user reviews) from hotels and restaurants. Today, he questions the integrity (fake recommendations submitted by commercial establishments) of user-generated comments on travel web sites and cites less than professional business standards. “More recently, a major cruise line has been accused of bestowing free cruises and other perks on people who contribute enthusiastic reviews about that cruise line to the user-generated cruise Web sites,” per Frommer.

    As I wrote in a recent blog “Using Web Sources as Marketing Evidence – When Would You Declare a Mistrial?” opinion-based evidence (e.g., industry analyst reports, product reviews, customer experiences) has been used for many years to support business’ claims of product benefits. Easy web access and social media sites have proliferated the number and types of opinion-based evidence (e.g., blogs, micro-blogs citizen reviews, online surveys, etc.).”

    The same rules of disclosure and liability should apply to online opinion-based evidence. FTC wants to regulate online viral marketing content which means changing the old rules of “truth in advertising” to adapt to the new realities of viral marketing. If bloggers/companies choose to intentionally make untrue statements or not disclose incentives for endorsements, let the FTC at them. What do you think?

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