THE PRACTITIONER

Recently the FTC announced that it was moving to regulate bloggers and force them to disclose the relationships they have with the companies that make the products or services they review or endorse. The basic premise behind the move is that consumers are being tricked by word of mouth (WOM) marketers into believing they are hearing unbiased third party reviews, when in fact in some cases they are being fed paid endorsements.

The stage for this announcement was set in 2005 when Commercial Alert, a watchdog group, filed a petition with the FTC demanding guidelines for WOM marketing. The FTC responded in 2006 by issuing a ruling that companies needed to disclose their relationships, but this has yet to be applied to bloggers.

What is a good example of a company engaging in shady WOM marketing techniques? Well, one example that went a little too far was a 2002 stunt by Sony Ericsson. The company hired 60 actors to visit popular tourist attractions in New York City and Seattle to promote its T68i camera phone. The actors, pretending to be tourists, stopped passersby and asked them to take their picture with the T68i camera. Without trying to sell the camera, these actors were able to demonstrate its usefulness to the general public – and without identifying themselves as paid representatives of Sony Ericsson. I’ll admit it was a clever campaign, but ethically, a little sketchy.

Today, more and more people are getting their news and information from social media. Think about where you heard about the death of Michael Jackson, or Sen. Ted Kennedy. Chances are you heard it on Facebook or Twitter – or from someone who did. These tools have become incredibly popular for the dissemination of news and information – that’s why CNN (and all major news outlets) have Twitter feeds. However, misinformation can spread in the same way – remember the hoax that Jeff Goldblum (and not just his career) was dead?

It’s not just gossip and breaking news that the public gets from social media, either. Recently a Practitioner post featured a Forbes survey that uncovered the social media habits of executives. It found that top executives are using Internet search and social media tools to get information for business purposes. As social media becomes more important in our personal and professional lives, it is only natural for the FTC to step in to protect consumers from fraudulent marketing.

The central issues here are trust and blog credibility. Bloggers reviewing products or services have the image of a neutral third party, so the public is trusting of their opinions, something that shady marketers could inevitably use to their advantage. Consider Ted Murphy, who has created marketing campaigns that include paying his network of more than 250,000 bloggers thousands of dollars each to write product reviews. Andy Sernovitz, President of the Word of Mouth Marketing Association, has declared Murphy a “scam artist” for his tactics.

For anyone looking to share information with a broad audience, credibility is key. Again, think back to the day Michael Jackson died. TMZ was reporting he was dead for hours before any major news outlet would confirm, and most people I knew waited until that happened to believe it was true. That’s because TMZ has credibility issues that stem from supporting the paparazzi and reporting on trivial celebrity gossip.

Additionally, Wikipedia has stepped up efforts at ensuring credibility by recently announcing it will employ monitors who will oversee the edits made to the Wikipedia pages of living persons. Recognizing that highly publicized challenges to claims made on the user-generated encyclopedia will damage its reputability, the company has put a plan into action to ensure long-term viability.

Disclosure of compensated relationships for bloggers is a good thing, and regulation of WOM marketing in general is necessary given social media’s rise in prominence and the trust that consumers have placed in third party references online. The bottom line is that if you’re selling good products, you don’t need deceptive marketing techniques. As communicators, we owe it to our clients and their brands to ensure that they remain credible, so this proposed regulation from the FTC shouldn’t give anyone fear.

A 2005 Intelliseek survey, reported on by The Washington Post, found that 29% of people age 20-34 and 41% age 35-49 said they would be unlikely to trust future recommendations from friends that they discovered were compensated for a previous suggestion. I know that I fall into that category, because that person’s credibility as a reference would be shot.

What do you think? Would you trust someone you found out was being paid to sell you a story but didn’t disclose it?