ftcpayola header FTC Cracks Down on Blogging Endorsements

By Tara Lane, Staff Writer

The blogging community was shocked this week when the Federal Trade Commission announced on Tuesday an update of its guidelines for advertisers, which now extends into the realm of social media. In an effort to maintain full disclosure, honesty and transparency among brands and consumers, bloggers and other social network users must disclose their affiliation with a company for any product review, advertisement, or endorsement, whether it be a paid review or compensation in the form of a product. Failure to do so will result in an up to $11,000 fine for each instance.

While the FTC looks down on pay-per-posts and sees it as “payola blogging,” the majority of the Internet community sees it as social influencer marketing, or the use of bloggers to promote products and brands. Many companies develop relationships with popular figures in the blogging community, and offer products or compensation in return for a review — positive or not. However, many bloggers already disclose their relationships with companies, whether it’s by running an ad in their sidebar, or stating it directly within the post.

The Internet and blogging communities already run a “checks and balances” system, regulating themselves by holding influencers to high standards, especially if their popularity is notable. If a popular blogger failed to disclose something, and it was later found out, they would most likely face criticism by their peers, hurt their credibility and reputation, and see a significant drop in readership. Knowing the consequences beforehand is what keeps them from holding anything back. Bloggers thrive on honesty – it’s why they blog in the first place. Sharing and open communication is often what compels users to the medium in the first place.

A notable example of this comes from Chris Brogan, a well-known social media guru who, last December, faced criticism from his readers following a sponsored post he had done for Kmart. His readers and followers felt a sense of betrayal, and questioned whether he could be trusted in the future. Brogan maintained that he had fully disclosed the relationship, and that it in no way should it affect any of his past or future work. Though he most likely still lost readers, he also gained more trust for explaining his reasoning, and learned a lesson for the future as well.

Trendsta, an emerging social influencing business, relies on sponsorship from clients to connect their products with the most influential social network users. While Trendsta already discloses client relationships, the new guidelines may have an impact on the influencers themselves. Just how far these guidelines extend is still uncertain, but the news has certainly caused quite a stir, and plenty of outspoken opinions.

But just how long will these new guidelines last? Social media is evolving every day. Soon, there will be something more than a blog and beyond Twitter that will make monitoring these kinds of activities even harder. Should the FTC really be concerned with something that is already self-regulated to a certain degree? While they say they will focus more on big-name bloggers and the advertisers themselves, there are still large groups concerned about their futures in the blogging world. The new guidelines go into effect on December 1st, leaving bloggers a short amount of time to figure out new strategies if necessary. When the time comes, only then will we see how many people will be effected by the changes, and just how far the FTC will go to enforce them.