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New FTC Regulations Apply to Marketers, Affiliates

Posted on 10.14.2009

Thinking of enlisting bloggers to help sell your products? If so, you now need to think about requiring disclosures, and keep a close eye on what those reviewers are publishing.

Recent announcements of tighter restrictions by the Federal Trade Commission (FTC) are giving retailers even more reasons to keep an eye on their affiliates. One of the additions to the new Guides Concerning the Use of Endorsements and Testimonials in Advertising looks to keep tighter restrictions on how retailers promote their products - specifically endorsements by third parties. The text in the document essentially states that favorable reviews of products can be considered "endorsements;" an advertising message that consumers will likely believe reflects the opinions, beliefs, findings or experience of a party other than the sponsoring advertiser. These endorsements then, must be disclosed as such to avoid penalties and fines.

And then there's this from the Guides:

For example, a blogger could receive merchandise from a marketer with a request to review it, but with no compensation paid other than the value of the product itself. In this situation, whether or not any positive statement the blogger posts would be deemed an “endorsement” within the meaning of the Guides would depend on, among other things, the value of that product, and on whether the blogger routinely receives such requests. If that blogger frequently receives products from manufacturers because he or she is known to have wide readership within a particular demographic group that is the manufacturers’ target market, the blogger’s statements are likely to be deemed to be “endorsements,” as are postings by participants in network marketing programs. Similarly, consumers who join word of mouth marketing programs that periodically provide them products to review publicly (as opposed to simply giving feedback to the advertiser) will also likely be viewed as giving sponsored messages.

What does it all mean? There is much more to these guides than can be summed up in a blog post. But without question, retailers, affiliates and "endorsers" are all going to need to be on the same page. They are all seemingly responsible to each other (and can be held as such) to make sure the public is not being deceived into purchasing products that do not deliver on their promises. Companies specifically will need to take their reputation (and marketing) management efforts to a new level. Web 2.0 marketing just got a little more rigid.

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