The FTC and Sponsored Conversation

by Sean Corcoran

 

The Federal Trade Commission’s recent proposed updates to the “Guides Concerning the Use of Endorsements and Testimonials in Advertising” has rekindled the heated discussion around sponsored conversation. The proposed updates, to be voted on this summer, include examples and language that directly affect anyone working with bloggers. Because Google and the federal government have come out with updated guidelines around this subject since we wrote our report, we felt it necessary to update and clarify our position on it (our position has not changed, we’re just highlighting why things like disclosure and authenticity are as important as ever).

 

First let me state that, just as we support Google’s policies, we also support and agree with the FTC’s updates to their guidelines. These guidelines have been developed to both protect consumers and ensure free market competition – a necessary role in an online world that experienced too many deceptive practices (i.e. spam, link farms and undisclosed pay for post schemes). And while the guidelines themselves are not new, they have been updated to include online marketing tactics such as paid blog posts. Here are the most important points you need to know about the guides when working with bloggers:

 

  • Advertisers must disclose “material connections” between themselves and their endorsers that might “affect the weight of credibility of the endorsement (i.e. if you compensate or pay in any way, you must disclose)
  • Endorsements by bloggers must “reflect honest opinions, findings, beliefs or experience” of the endorser
  • Both the marketer and the blogger can be held liable for misleading or false statements made by the blogger about the brand

There is no doubt that the use of sponsored conversation is growing and at Forrester we believe that marketers can compensate certain bloggers to create content for their brand in an above board fashion – one that follows all of the necessary rules so blog readers know when they are reading legitimate editorial content and when they are reading paid content. Sponsored conversations are a form of paid media but they do have the ability to create earned media (i.e. word of mouth conversation) when done the right way.

 

Here are our updated rules for any marketer considering the use of sponsored conversation:

 

  1. Know the rules and educate everyone involved. Before you even think of dipping your toe in the water you will need to familiarize yourself with all of the necessary rules including the existing FTC guidelines, the proposed updates to those guidelines and Google’s policy on the use of no-follow links. Also take note that other countries such as the U.K. have have stringent policies on this subject as well. Get legal involved upfront and make sure anyone working on it is educated on the subject.

  1. Mandate absolute disclosure and transparency. We have preached this from the beginning as it is by far the most important rule. The FTC’s guidelines are clearly about deterring deceptive advertising, a practice you shouldn’t be involved in anyway. Make sure any and all bloggers you work with make it VERY clear to their audience that your brand is involved in the development of the content. If you fail to do this you will put yourself at risk for not only a bad PR mess but legal trouble as well.

  1. Ensure authenticity. You must allow bloggers to speak freely and authentically – not just because the FTC requires it but because credible reviews are better for your business. Just as consumers find product reviews on e-commerce sites more credible when negative reviews are included, consumers will find reviews about your products more credible when the reviewer is allowed to speak about it in their own voice. This is the real power of working with bloggers – to get them to talk freely about your brand with their community, not to use them as a megaphone to spin your message. If you’re not comfortable of letting go of your brand then sponsored conversations aren’t for you (and you may want to revisit your overall social media strategy).

  1. Be relevant and provide value.  Working with bloggers gives you the opportunity to have an influential talk about your brand with their community. Make sure you choose bloggers that develop relevant content for your brand so you can provide value to their readers. Also, make sure the blogger is armed with all of the necessary facts about your brand and/or product because if they write something false, you could be liable.  

  1. Don’t talk and walk away. A strong social marketing strategy is one that is about commitment to relationships and it’s no different when working with bloggers. Closely monitor the content your blogger partners are creating for you and listen to what the blogger and their community of readers has to say so you can actually follow up with the conversation.

  1. Choose your partners wisely. There are plenty of potential pitfalls when working with sponsored conversation so it’s important to work with experts who understand the ins and outs. If your agency plans on implementing it, make sure they know the rules inside and out. Get to know the bloggers you work with and avoid bloggers who consider themselves journalists. Finally get to know any vendors you work with. Learn their history in this space and make sure they’ve been following the rules all along.

  1. Start small. Once you know all of the rules it’s best to start slowly with a conservative approach. Once you learn the ropes you can begin to expand it out. Look to organizations such as WOMMA and The Blog Council for guidance.

While it seems as though influential people like Andy Sernovitz disagree with our position, the fact is we’re not that far apart. We all agree that advertisers and bloggers should not use this form of marketing for deceptive purposes and should always follow the rules set up by the FTC – disclosure being the most important. Readers should know when they are seeing paid content. Where most people disagree is what that content looks like and the type of compensation that is used. At Forrester we believe that the policies from organizations such as the FTC and Google will help create standards to solve these debates. Paid content on blogs will be clearly marked and disclosed to the audience. We ultimately expect the end product to look something like paid search – a value to the consumer (unlike most display ads) but clearly marked as paid content. Either way you look at it, make sure not to take the use of sponsored conversation lightly because the punishment could be heavy.

Comments

re: The FTC and Sponsored Conversation

Sean -Thanks for publishing this. It's an important update on a critical issue. There has always been a role for commerce in social media -- but it's a difficult and risk process. Companies need to understand and lead with the highest level of ethics and disclosure. Without that, they risk significant legal issues - and massive consumer backlash.Andy Sernovitz

re: The FTC and Sponsored Conversation

I agree with what Sean says and I agree with the need for adoption of standards, particularly in arenas such as professional blogging.However, how is this achieved / enforced across international boundaries?