Free product samples were once one of the few perks of being a blogger. But with a federal investigation closing in, corporate giveaways may be a thing of the past.

The Federal Trade Commission is cracking down on bloggers who don't disclose that they have received free products from corporations. In June, the FTC announced new guidelines that would fine bloggers and corporations linked to them when writers do not admit to receiving payment for reviews and products they write about.

Today, the National Advertising Review Council has released two legal decisions that take issue with the way brands disclose their relationship to sponsored review sites. But what they don't touch upon is the extent to which brands will be held responsible for other people's actions.

NARC focused on two companies that did not fully back claims about their products and blurred the line between advertising and editorial. NARC's investigative units, the National Advertising Division(NAD) and the Electronic Retailing Self-Regulation Program (ERSP), found that Herbal Groups, Inc. and Urban Nutrition need to be clearer about sponsorships and disclosure. Both companies created websites that appeared to be editorial but were actually sponsored by the companies and made claims about their products and their competitors that were not fully backed by science.

In the cast of Urban Nutrition, the company volunteered to state its connection to the products being reviewed, but the ERSP wanted the company to go a step further. NARC writes:

"ERSP noted that while it appreciated the voluntary actions taken by Urban Nutrition, it is imperative that the placement of disclosures regarding the marketer’s material connections to the Websites and products be of such prominence to assure that consumers understand the relationship between Urban Nutrition and the products being reviewed immediately upon visiting the site. "

Urban Nutrition is happy to comply with the guidelines, but beyond simple disclosure, ERSP wants comments on each page of a website and thorough disclosure beyond any doubt for readers. 

That's one thing for a company sponsored website, but what happens in other media? And when the company is not directly responsible for the copy? That's when this will get interesting.

The New York Times notes a hypothetical example that gets to the heart of the Federal Trade Commission's concerns:

The F.T.C. cited the fictional case of a video blogger who receives a free copy of a new video game system from its manufacturer for review. “The readers of his blog are unlikely to expect that he has received the video game system free of charge in exchange for his review of the product,” the commission wrote. As this fact would likely affect how credible consumers find the review, the blogger should disclose that he received the game free.

Many journalists receive free review products all the time. The problem is that readers may not assume that individual bloggers have the same sort of connections. There's nothing wrong with disclosing this sort of thing, but in certain media it gets difficult. Where in a 140 character tweet do you fit a disclaimer, for instance?

Meanwhile, bloggers are not held to the same standards as journalists. Nor should they be. And regulating the blogosphere gets particularly thorny. In June, the FTC noted that both corporations and individual bloggers could get fined for violations about disclosure. But if bloggers want to ignore the rules, should brands be held responsible?

If companies want to be generous with their products because they are confident that they will be met with enthusiasm, they should not be punished. If they are paying for positive reviews, that's another thing. But both shouldn't fall under the same rubric and figuring out how to monitor the gray area will be tricky. 

Meghan Keane

Published 11 August, 2009 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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Comments (4)

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Christian Hughes

I have heard this arguement many times recently, even here in Ireland. It seems that a lot of people are willing to simply forget the small fact that freebies aside, Journalists are paid to write reviews, editorials etc., while Bloggers (in general) are not.

Bloggers do what they do in their own free time for little or no reward (bar the odd freebie). Having said all that, I think it would be a change for the better if Bloggers were held to higher standards. If I am ever given anything to review (either a product or tickets etc.), I always make a point of stating that's the case.

over 8 years ago

David Iwanow

David Iwanow, SEO Product Manager at Marktplaats.nl

While I agree that not all consumers would understand that the blogger got a free copy of the video game for the review, reading the review may soon indicate they are too kind.

If the blog/post is too sales focused people will turn off reading the content, but if it is quality and useful does it matter if they got a free video game? While providing such gifts and payment after the blog has been posted can make the process much more transperant does it really affect readers?

With bloggers needing sources of income, I would prefer they got some kickbacks/gifts rather than filling the blog with ads and malware to make money.

The problem with controlling bloggers comes down to what is in it for the company/blogger? If there is a pay for lead it is likely that certain lines maybe pushed which could affect the brand in time.

Sponsored content is no different and sometimes better than traditional ads.

http://thelostagency.wordpress.com

over 8 years ago

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Chris

This is an important subject, somthing that will continue to raise issues until it is resolved.

over 8 years ago

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Patricia

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Patricia

http://onlinegamescom.net

over 8 years ago

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