Tag Archives: FTC

Endorse Me, You Gypsy Savage, Endorse Me!

On the one hand, who likes big government? The FTC, Federal Trade Commission, sounds like the feds. Gear up your paranoia. On the other hand, who likes fake endorsements? And then — can I borrow your hand to make the third hand, please — wow! How can we resist highlighting this:

theifOn Monday the FTC published a bulletin with the catchy title: Firm to Pay FTC $250,000 to Settle Charges That It Used Misleading Online “Consumer” and “Independent” Reviews. Here’s a summary, direct quote from that document:

The Learn and Master Guitar program promoted by Legacy Learning and Smith is sold as a way to learn the guitar at home using DVDs and written materials.  According to the FTC’s complaint, Legacy Learning advertised using an online affiliate program, through which it recruited ‘Review Ad’ affiliates to promote its courses through endorsements in articles, blog posts, and other online editorial material, with the endorsements appearing close to hyperlinks to Legacy’s website.  Affiliates received in exchange for substantial commissions on the sale of each product resulting from referrals.

I’m glad they got them. Fake endorsements are dishonest, they dilute real endorsements, they pollute the Web, and they tarnish the wisdom of the crowd. So hooray for the FTC, catching the spoilers who make it worse for everyone else. Get those evil-doers.

But then, wait, what was that? This is a more direct quote from the same document:

According to the FTC, such endorsements generated more than $5 million in sales of Legacy’s courses.

Now that worries me. I can subtract $250,000 from $5 million in my head, without needing an accountant or even a calculator. It comes to $4.75 million. What’s wrong with this picture?

My thanks to Anita Campbell who pointed on Twitter to Geno Prussakov’s blog post on this.

(Image: Oleg Golovnev/Shutterstock)

FTC vs. Social Media Wolves in Sheep’s Clothing

Here I was writing this post about new FTC rules for social media, feeling self-righteous about it, when it occurred to me that Shutterstock.com gives me a free stock photos account, which I use to illustrate this blog. And I’m an Amazon.com affiliate. I accept review copies of books, some of which I’ve reviewed here (although I bought most of the books I’ve reviewed, and I don’t go around asking for review copies, just accepting them, occasionally, when they’re offered). And I’m an employee of Palo Alto Software. So I don’t want to be a pot calling kettles black. Or a wolf disguised as a sheep.

Still, it’s about time. A new Federal Trade Commission (FTC) ruling aimed at blogging and, I assume, Twitter starts Dec. 1. This is from the New York Times story on it:

Beginning on Dec. 1, bloggers who review products must disclose any connection with advertisers, including, in most cases, the receipt of free products and whether or not they were paid in any way by advertisers, as occurs frequently. The new rules also take aim at celebrities, who will now need to disclose any ties to companies, should they promote products on a talk show or on Twitter. A second major change, which was not aimed specifically at bloggers or social media, was to eliminate the ability of advertisers to gush about results that differ from what is typical — for instance, from a weight loss supplement.

I’m glad they made it specific. I hope they enforce it. The same general idea was previously built into basic journalism ethics and it should have been obvious that it applied here as well. Ethics? I mean what do you think, when people are paying people to blog about their products, tweet about them, and do reviews on social media sites. Making endorsements look like honest opinion, or reviews pretending they’re objective, is ugly. I hope it’s obvious why.

What if some company offered to pay you under the table for talking it up with all your friends? How would you feel to be a walking talking advertisement parading as a person?

But it happens all the time. I got an email last month offering me money to endorse products on this blog. It was blatant and unembarrassed. The offer to shill for money was couched in terms like “business models” and “revenue streams.”  But it was pretty simple: if I would endorse products in my blog, they’d pay me. No, thank you.

Time magazine’s last issue included a story called Brought to You by Twitter, about tweeting for money:

A company called Izea, which made its name connecting bloggers with firms willing to compensate them for plugs on their blogs, has set up a similar service for the Twittersphere. At a site called Sponsored Tweets, Twitter users can sign in, set the price they want companies to pay them for tweeting an ad on their behalf and wait for the offers to come in. Jocelyn French, the mother of a 2-year-old boy and 1-year-old girl, has tweeted for a parenting website, a college-information site and Kmart, among others, at $1 a pop. “I figure, hey, why not get paid at the same time?” French says. On average, companies are paying Sponsored Tweets users $29 per tweet.

I hope you see the problem with that: first, it’s dishonest, the wolf in sheep’s clothing, because it’s presented as conversation.

Back in the 1970s when I studied Journalism in grad school, the generally accepted ethics were pretty obvious on this. Disguising ads as editorial was clearly out of bounds. But that was way before Amazon.com revolutionized consumer reviews, and then there was the proliferation of blogs and now Twitter blurring the boundaries. But still, put it back onto the personal level: if a company pays you to pretend you’re giving a legitimate personal opinion, that just doesn’t feel good. Right?

(Photo: Sarah Heinman/Flickr)