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The Federal Trade Commission made waves last October with new disclosure guidelines for endorsements online. Repeatedly, the group has expressed surprise that consumers and brands reacted so strongly. From their perspective, the guidelines simply elucidated rules that were already in place.
At BlogHer Business '10 in New York on Thursday, Stacey Ferguson, senior attorney in the Division of Advertising Practices at the FTC, reiterated that fact. But while the guidelines may not have changed any of the FTC's rules on endorsements, they brought increased scrutiny without clear enforcement rules. And it looks like the FTC still doesn't have any clarity on that part.
Ferguson notes that the extreme reaction to the guidelines online was a complete surprise at her organization:
"We're all attorneys at the FTC. In our minds, this is not new. We thought we were just clarifying what people already know."
Part of the problem, for brands, bloggers and consumers, is that the FTC has been very vague about the logistics of enforcing the guidelines. As attorney and blogger Liza Barry-Kessler puts it:
"The messaging wasn't 100% consistent from the beginning of this effort."
The FTC is working on that part, but part of the problem is due to the changing nature of digital media. A disclosure on a website or in the pages of a publication is different than a disclosure in a tweet. And the FTC is hesitant to create rules on how specific disclosures should look, because each case is different.
According to Ferguson, there is a simple test to understand where the FTC comes down on individual endorsements:
"If the audience understands that it's an endorcement, then that's enough."
But that is easier said than done. For starters, the FTC holds brands responsible for what is said about products that have been given to writers and consumers. Generally, that could be fine. If a brand has a clear disclosure policy whenever it gives away products for review or testing, and the recipient makes the relationship clear on their website, Twitter page or wherever s/he writes about the product, everyone is in the clear.
However, brands cannot truly control what is or is not said about their products online. Even if they are giving away those products for free. And yet, that is what the FTC expects.
BlogHer's co-founder and COO Elisa Camahort Page suggests that brands screen bloggers and writers before sending products.
"See who they are and what they blog about, but also, do they seem to have best practices in place? Because in the end you will be held responsible. If you keep working with people who don't have that in place, that's on the brand."
Ferguson confirms this point. It should come as a relief to bloggers to learn that they will not be held monetarily responsible for poor disclosure on their blogs and Twitter feeds, but for brands, this could become problematic quickly.
They are the ones that have to monitor what is or isn't said about them. Says Barry-Kessler:
"If you're large enough to have a lawyer, you're large enough to know you have to be careful and responsible."
But keeping track of blogger items online could quickly get out of hand. It's one thing to cut off a specific blogger who fails to disclose product giveaways. But if other bloggers repeatedly screw up the disclosure process, the brand is the one held responsible. Says Ferguson:
"Most of the time we're going to focus out attention on the companies. They have to be the ones making sure their I's are dotted, and their T's are crossed."
In social media, it's hard to keep track of all that punctuation. Take for instance, affiliate links.
As Barry-Kessler puts it, "Disclosing the fact that you're going to make 17 cents from a link is a challenging thing to figure out how to do."
She suggests to her clients that they use hover text to explain to their affiliate relationship. Others put info directly in affiliate links, which is clunky and difficult to read. Most just ignore the guidelines there.
Will the FTC crack down on affiliate violators? Ferguson is clear on that one:
"The answer is no."
But that is not the official FTC position. And since all of this is decided case by case, it's hard to know where the group will come down in specific situations. It may surprise the FTC that this approach confuses people and gets bloggers and brands up in arms. But it's not hard to see why.