FTC Cracks Down on Bloggers

Last month, the FTC issued a new set of guidelines concerning bloggers’ endorsements of goods and services. Savvy marketers have been sending “power bloggers” products for trial and review for quite some time – a good move on their part, given Jupiter Research’s finding that 50% of blog readers seek out product information on blogs.

In a nutshell, the new FTC guidelines advise bloggers that they could face an $11,000 fine if they receive free services, goods, or money and write about the goods or services without disclosing their “material connection” to the company. Facebook and Twitter also fall under the guidelines, leaving one to wonder how to make such a disclosure AND endorse a product in 140 characters or less.

Companies have long employed “under-the-radar” methods to get cultural influencers to endorse their products - think of a retailer sending an actress this season’s “it” bag in hopes that she’ll be photographed carrying it (spurring thousands of women to make a purchase). Will these celebrities now have to disclose the nature of their relationship with the designers they wear on the red carpet? With the uptick in product placement on television shows, will the FTC extend their disclosure guidelines to this and other “non-traditional” media? It seems that television programs have fewer reasons than bloggers to be concerned with the validity of the claims they make – is anyone else skeptical of the Biggest Loser’s promotion of Extra gum as a viable snack substitute?

While I can see the value in the FTC’s intentions, I think their 81-page rule book creates more questions than it answers (and I’m not alone in my sentiment). The scope of the blogosphere is tremendous – the WSJ reports that more than 20 million Americans author a blog, and 1.7 million profit from it. Given these statistics, just who will be tasked with enforcing these guidelines?

Bloggers have such tremendous clout because they’ve made a point of being transparent and honest in their product reviews. Though the appeal of receiving free products could lead some to write glowing reviews of everything that comes their way, a smart blogger would realize that a slew of favorable reviews of “bad products” would seriously undermine their credibility with their readers. And, at the end of the day, a blog without an interested audience holds no appeal to advertisers and marketers.