Today the Federal Trade Commission outlined its rules
for product endorsements by bloggers, celebrities, and other influencers, who will now face fines of up to $11,000 for not disclosing that they were paid to review or endorse a product.
This is the salient paragraph:
"The revised Guides also add new examples to illustrate the long standing principle that 'material connections' (sometimes payments or free products) between advertisers and endorsers--connections that consumers would not expect--must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other 'word-of-mouth' marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service."
It's not that we're cheering because Mommy bloggers will now have to declare their free sneakers on their income taxes. But for collaborative blog
sites like ours, this clarification means that our role as an "honest broker" between the bloggers and our big corporate clients becomes even more important. We build our communities around a few ethical considerations, and we never tell bloggers what to write. But we occasionally do share revenue. And for the bloggers, this is a lot less of an intrusion into their thinking and writing than if they were to be paid directly by one of our clients (we also tend to pay fast, not a small consideration for the blogger/entrepreneur).
Our bloggers already disclose that they are advising their networks about one of our events or white papers or whatever we're doing because they are members of our community, which already carries additional benefits. As we noted, while cash sometimes changes hands, it is not always the case. Finally, we never ask a blogger to recommend a company, its products or services, but only to invite their followers to pay attention to something we are producing that is, we hope, pretty valuable.