October 05, 2009

Why I Don't Think The FTC's Rules On Disclosure Will Have Much Effect

As you no doubt already know, the Federal Trade Commission posted a revision to guidance to advertisers around endorsements that might have far-reaching effects in the blogosphere, asking authors who receive free product, services or are paid outright to disclose such a transaction or stand to receive heavy fines, potentially into five figures. While some are welcoming the move toward greater transparency, others see it as bloggers being put under the microscope again, not being trusted, adding that mass media journalists have operated in the same manner for much longer, and disclosures are not always clearly found.

The goal of the new rules? Helping to make it clearer when somebody's influence has been bought and sold. If an author has an undisclosed financial relationship with a subject, they no doubt have bias, and that should be disclosed to the reader. In the end, the Web could become, as Matt Cutts put it, " more useful and more trustworthy". I have always mandated on this blog that all of us have a responsibility to be trusted and transparent, and I have tried to do so almost to a fault. When I have gained a new advisory role, or had a paid speaking opportunity, I have told you. I wish all folks were as ardent.

But with that said, I don't think the mandate will have a dramatic effect on the way bloggers disclose. The reason? Because good people will continue to be good, and bad people will continue to be bad. The people who have been in a gray area thus far, and have chosen not to disclose, will likely continue to not disclose - FTC regulations or not. And the FTC has a lot bigger fish to fry than the occasional mommy blogger or gadget freak who takes a free product in exchange for a plug, not to mention we haven't even discussed the enterprise space, where analysts who may have five to six-figure annual relationships with clients fail to mention that when writing articles that disparage their competitors.

The FTC's goal isn't to track down that I got a free copy of Brian Solis' book on Putting the Public Back in Public Relations (I did) or that I got a copy of the New Community Rules from Tamar Weinberg for free (I did). (Note I haven't reviewed either one yet) The FTC doesn't care that I have t-shirts I got free from Lijit (I'm wearing one now), or that I have free stickers on my laptop from companies including Seesmic, OneRiot, AllTop, TiVo, FriendFeed, Facebook, Blogger and Tweetmeme. But the FTC does care if an independent product review is really a paid review, or if a blogger "regularly" receives products from a company, which would cause the audience to "view their reviews differently". (Quotes sampled from Mary Engle, Associate Director for Advertising Practices at the FTC via BrianSolis.com)

It would be nice if every blogger who does have regular paid relationships with companies would add a disclosure link on their site. I will aim to keep my list of advisory roles up to date, and mention it when I do cover companies that are in the same space. And you might remember last year's post when I told you I won an iPhone 3G from Socialmedian, not in exchange for a post, but as a result of a contest. That is because I already made the decision to disclose. Those who aren't already disclosing probably won't now that this rule has passed. After all, isn't it like passing the speed limit? If nobody crashes, nobody gets hurt, they may feel, and after all, everyone is doing it. I am glad the FTC is thinking about this, and there will no doubt be edge cases where the most blatant offenders will be paraded in the streets, but for the minor offenders, life should continue as usual.