For the first time since 1980, the Federal Trade Commission (FTC) has updated its guidelines for endorsements and testimonial-style advertising. As we reported earlier on Productopia, unscrupulous or downright phony blogs have been an increasing problem; bloggers can pretty much write anything about a product without disclosing relationships, cash payments or freebies from manufacturers. Until December 1, that is.
The updated FTC guidelines have implications for bloggers, celebrity endorsers and any other advertising that includes the kind of "real person" testimonials we see on TV every ten minutes. Starting December 1, 2009, endorsers must state clearly exactly whether they received a payment in exchange for their reviews. And according to the FTC, "the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement."
Fines up to $11,000 per post apply to bloggers failing to disclose material relationships.
The FTC hasn't yet specified exactly how bloggers are supposed to declare payments or relationships with companies whose products they review. From the consumer's standpoint, bloggers should let readers know in each post whether or not they were compensated (in cash or with free products) to post a review. But without clarification from the FTC, we might see disclosures hidden away on an "About Me" page or in tiny text at the bottom of the page.
Still, it's a step in the right direction. Of course, websites and bloggers on the up-and-up already make these disclosures, but hopefully with the threat of an $11K fine, bloggers will think twice before accepting free goods or cash in exchange for a glowing review without saying that they got stuff (or a bank deposit) for free in return.