Starting Dec.1, 2009, bloggers must disclose any connection they have to an advertiser or face fines up to $11,000 per violation. The Federal Trade Commission created the new endorsement regulation by a 4-to-0 vote and it will not affect traditional media because the FTC believes it is common knowledge of traditional media’s relationship with advertisers.
Even though there was no debate among the FTC members about passing this new regulation, bloggers have been arguing among themselves about the necessity of this regulation.
According to BtoB Editor Ellis Booker, blogger Sean Corcoran wrote a blog post stating that the new regulation will “…help strengthen [marketer-blogger relationships] by providing incentives to both companies and bloggers to do the right thing…”
Some bloggers, like Thomas O’Toole, believe the new regulation will not strengthen marketer-blogger relationships, but will cause “mischief” since they feel there is an “untenable distinction” between user-generated media and traditional media.
Social Media Council CEO Andy Sernovitz, according to Booker, stated in his blog post that he feels the new regulation is necessary to force marketers and bloggers not to post false advertisement on social media outlets. “False advertisement and fake endorsements have always been illegal. Just because it’s social media doesn’t mean you get a free pass.”
However, in the same blog post Sernovitz stated that FTC’s assumption of traditional media’s relationship with advertisers is common knowledge is “a very questionable assumption.” Sernovitz stated in his post that the FTC’s assumption “supports the claim of bloggers who say the FTC is holding them, unfairly, to a higher disclosure standard than traditional media.”
O’Toole feels the FTC regulation is not going to go away, so advertisers must adapt to the new regulation. He recommends in his Pension & Benefits blog that advertisers supervise their bloggers who endorse their products and services by following three compliance obligations:
- Monitoring: Endorsers who receive payments or freebies must be monitored to ensure that endorsers are making required disclosures and to ensure that endorsers are not making unsubstantiated claims.
- Training: Endorsers who receive payments or freebies must be given training in the new FTC guidelines, to minimize the chance that endorsers will make unsubstantiated claims or will fail to disclose their connection to the advertiser.
- Workplace Social Media Policies: Advertisers must have in place policies for employees that require them to disclose their status as an employee when making endorsements in social media and other online venues.
Although O’Toole believes in endorsement regulation, he stated that the FTC’s involvement is unnecessary because “the internet has a way of sorting this stuff out on its own.”
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