FTC Guidelines Raise Big Blogging Questions

Update 3: The new FTC Guidelines went into effect this week. A recent WebProNews interview with Wendy Piersall, Founder of the Woo! Jr. Network, looks at some interesting points about them that you may not have considered - some "gray areas" if you will.

Update 2:  Now Cleland says, "If people think that the FTC is going to issue them a citation for $11,000 because they failed to disclose that they got a free box of Pampers, that's not true. That's not going to happen today, not ever." (via)

Update: The FTC is now saying that the $11,000 fine is not accurate, at least for the first violation. Fast company got some responses from Richard Cleland, assistant director, division of advertising practices at the FTC, who says:

“That $11,000 fine is not true. Worst-case scenario, someone receives a warning, refuses to comply, followed by a serious product defect; we would institute a proceeding with a cease-and-desist order and mandate compliance with the law. To the extent that I have seen and heard, people are not objecting to the disclosure requirements but to the fear of penalty if they inadvertently make a mistake. That’s the thing I don’t think people need to be concerned about. There’s no monetary penalty, in terms of the first violation, even in the worst case. Our approach is going to be educational, particularly with bloggers. We’re focusing on the advertisers: What kind of education are you providing them, are you monitoring the bloggers and whether what they’re saying is true?” [empahsis added]

Cleland addresses more of the concerns here.

Original Article: The Federal Trade Commission has released its revised guidelines concerning the use of endorsements and testimonials in advertising. The revisions include a focus on "bloggers" and social media users, requiring them to properly disclose when they have received payment in the form of either money or product from a company or organization and produce content regarding said company or organization. The word is that bloggers can be fined up to $11,000 per post for not disclosing.

Have you ever mentioned a free product you received online and not disclosed it? Comment here.

The reasoning behind the guidelines seems noble enough - provide transparency and keep consumers safe from hokey information. However, the concept of the government dictating how this happens does not sit well with a lot of people. The revisions (which can be found in this 81 page document [pdf], should you care to peruse them [they start around page 55]) have ruffled quite a few feathers and the conversation has become one about free speech.

Well-known author/editor/publisher Jeff Jarvis makes a really good point. He says the FTC assumes that the Internet is a medium. "It’s not. It’s a place where people talk. Most people who blog, as Pew found in a survey a few years ago, don’t think they are doing anything remotely connected to journalism. I imagine that virtually no one on Facebook thinks they’re making media. They’re connecting. They’re talking," he says. "So for the FTC to go after bloggers and social media – as they explicitly do – is the same as sending a government goon into Denny’s to listen to the conversations in the corner booth and demand that you disclose that your Uncle Vinnie owns the pizzeria whose product you just endorsed."

It's not hard to find echoes of Jarvis's sentiment all over the web. Although, I don't believe I've seen it as eloquently put as with the Denny's analogy. Still, not everyone sees the FTC regulations as a bad thing. In fact, Google's Matt Cutts stepped into the conversation with Jeff Jarvis, expressing a bit more enthusiasm for the guidelines.

"As a Google engineer who has seen the damage done by fake blogs, sock puppets, and endless scams on the internet, I’m happy to take the opposite position: I think the FTC guidelines will make the web more useful and more trustworthy for consumers," he says. "Consumers don’t want to be shilled and they don’t want payola; they want a web that they can trust. The FTC guidelines just say that material connections should be disclosed. From having dealt with these issues over several years, I believe that will be a good thing for the web."

Commenters essentially tell Matt the whole thing would smell a lot better if he were the one regulating it. The reasoning for this is that Matt is involved with the industry. He is not a government worker that has been one his whole life. He's been in the field. He knows the score. The argument coming from most of the opposition is not about the fundamental principle of making content more trustworthy for consumers. At the root of it, it appears that people are much more concerned about a government body of regulators who aren't necessarily involved with online content production telling them how it is, when there are many, many questions about what falls under the criteria.

A number of these questions are nicely placed in an "open letter to the FTC" from Ron Hogan at MediaBistro's GalleyCat. Here are a few of them:

 

- If an unpaid blogger at the Huffington Post "endorses" a consumer product without meeting the FTC guidelines for disclosure of "material connections" to the makers of that consumer product, who's liable: the blogger or the Huffington Post?

-  If a blogger prints out a series of blog posts and distributes those printed copies, is he now the publisher of a newspaper or magazine? If so, the Village Voice is distributed for free, so can a blogger/publisher distribute his newspaper or magazine for free, too?

-  What if a blogger confines herself to stating demonstrably proven facts about a book, its author, its contents, and the matter of its publication? Does the FTC consider that an endorsement? What if she confines herself to stating such facts and includes links to an ecommerce site? Has her writing somehow been transformed from a statement of fact to an endorsement? 

There are plenty more where that came from. The list goes on. You can probably think of a few yourself. It may be hard for the guidelines to be enforced. The FTC does acknowledge that its guidelines aren't exactly the law themselves. The FTC says:

The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.

It should also be noted that the rules presumably apply to publications beyond bloggers and social media users, but for some reason it appears that "bloggers" are the ones with whom the FTC had on its collective mind when drafting these guidelines. You have to wonder if they are able to come up with a definition for "blogging" (others have had trouble in the past. Even those directly involved in the online content industry). The rules are scheduled to take effect on December 1st.

What questions do you have about the FTC's guidelines? Share them here.

Women Favor Facebook Over Twitter

The majority (86%) of women are now using popular social networks, a 48 percent increase over 2008, according to a new study by SheSpeaks.

In addition, social networks including Facebook, MySpace and Twitter, have become drivers of purchase intent among women, with 50 percent of social media users reporting they have purchased products because of information on social networking sites, and 40 percent have used coupon codes found on social networks.

The largest increase in social media use was among women 50 years of age and over, whose participation grew from 31 percent in 2008 to 70 percent in 2009. Social media participation was up across all age groups this year.

"Last year our members were going online primarily to research purchases, but now they are looking to social media to help them research, guide and facilitate every kind of transaction, from social exchanges to purchases," said Aliza Freud, Founder and CEO of SheSpeaks.

"Women have become more comfortable using social media, and for marketers, the overall growth and habitual use of social media represents opportunities to reach and engage women of all ages, and influence their purchase decisions."

Facebook is the most popular social network among women with 95 percent belonging to the site, up 46 percent from one year ago. MySpace participation declined over the last year (63% to 42%), while nearly 40% of the women surveyed said they have Twitter accounts. Although many women use both Facebook and Twitter, 80% prefer Facebook.

In fact, 25% of those surveyed abandoned Twitter after creating their accounts, while Facebook use only declined 7% for women after creating Twitter accounts. Facebook users also reported they are two times more likely to log in daily (72%), compared to Twitter users (36%).

"Although Facebook is currently more popular than Twitter among women, they each share a purpose in women's lives," said Freud.

"Facebook serves women's need to interact with friends and share photos, while Twitter has become a tool that is primarily used for professional networking and learning about up-to-the-minute news, promotions and deals."

The study also found online video has grown in popularity over the last year. Almost 40 percent of women indicated they frequently watch video and TV content online, and 85 percent say they watch it frequently or sometimes.

"Our members are spending more time watching video on the Web, especially now that more premium content is available," said SheSpeaks CMO Fiona Pietruski. "It is important for marketers to recognize that influential female consumers are spending their time with many types of digital media, where they can be reached with advertising and marketing messaging."
 
 
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Americans’ Social Media Habits Highlight Business Potential

Euro RSCG released some interesting findings from a study exploring the different ways Americans are using social media to "redefine their lives." The study looked at 1,228 social media users in the United States.

"Word of mouth has always been the most powerful marketing tool; what social media has done is dramatically increase the scale, velocity and immediacy with which people can influence each other and create the biggest revolution to hit our industry since television," said David Jones, global CEO of Euro RSCG. "One of the interesting findings of the study is that it's the combination of online and offline experiences that creates the biggest impact."

Other findings include:

- Even though 53.5% of respondents have met new people through electronic media, face-to-face interaction is still the "gold standard"

- Consumers are engaging more in multi-way exchanges of ideas and opinions among consumers and brands

- Consumers are not only move involved with family and friends, but they have increased involvement in political and humanitarian issues.

- 40% agree that social groupings online can be truly social, while only 14% disagree. According to Euro RSCG, figures varied little across age, gender, ethnic, or income groups.

"Online social networking has become part of our culture so quickly, it's easy to forget just how new it is and how much it's a work in progress. People are still experimenting with the different options and finding ways to make it part of their life," said Marian Salzman, president of Euro RSCG Worldwide PR, North America. "Forget the images of sad antisocial types. Smart consumers are mixing and matching the tools that come available to meet their social needs. Electronic tools are making them even more socially active, just as the telephone did back in the day."

Perhaps more interesting than the statistics provided by the firm, are the key takeaways it cites. This includes things like the fact that social media is an important consideration for any communications strategy, and the fact that it's impossible to predict how bits of communication will spread across social media.

The firm also says that even though the web is world-wide, its emerging power is hyperlocal. This is because this is the space where online and offline most often meet. That is a key reason why businesses, particularly local businesses should not ignore social media. 

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Nielsen Says Most Social Media Users Rich and Urban

Research from Nielsen indicates that wealthier people and people who live in big cities (at least in the US) are more likely to use social networks than people with less money that live in smaller towns.

Nielsen Claritas, a branch of Nielsen that looks at segmentation in consumer behavior, says that there is a "marked difference" in the demographic makeup between the two largest social networks - Facebook and MySpace. According to Nielsen Claritas:

- Facebook users have a largely upscale profile. The top third of lifestyle segments relative to affluence were 25% more likely to use Facebook than those in the lower third.

- The bottom third segments related to affluence are 37% more likely to use MySpace than those in the top third.

- Users of Facebook were also much more likely to use LinkedIn, a network geared towards business and professional networking, than those who use MySpace.

"Nielsen's online data shows that about half of the U.S. population visited a social networking website in the last year and that number grows every quarter," says Wils Corrigan, AVP, Research & Development, Nielsen Claritas. “The rising popularity of these sites and the deep engagement consumers have with them has advertisers and marketers asking for more and more detail as to which lifestyles should be targeted for their online advertising and promotions."

According to Nielsen, the blogging and tweeting community isn't necessarily made up of wealthier people, but they are more likely to be in urban areas. "The penetration rates of the top two most visited blogging platforms (Blogger, Wordpress) and the most popular micro-blogging platform (Twitter) show that Nielsen’s 12 Urban lifestyle segments are more likely to blog and tweet than Nielsen’s 22 Town & Rural segments," says Nielsen.

The firm says that while bloggers and tweeters also tend to use Facebook and LinkedIn more often than other segments, the "Urban lifestyle segments" for Blogger are 18% more likely to use Facebook and 140% more likely to use LinkedIn than people from other segments.

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