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FTC and Viral Marketers May Square Off




AdAge reports that the Federal Trade Commission (FTC) is moving closer free-speechto a proposed plan that will begin regulating viral marketing and blogs. Regardless of what side of the political fence you are on it’s starting to get a bit scary as to just how much the government wants to be the overseer of everything.

Rich Cleland, assistant director of the FTC’s advertising-practices division puts it this way

“The commission is attempting to update guidelines that are 30 years old so that they address current marketing techniques,” he said, “and in particular to address the issue of whether or not the safe harbor that’s currently allowed for ‘result not typical’-type disclaimers is still warranted.”

It looks like the center of this intensified scrutiny is for bloggers who are paid for their posts by marketers. Of course, if the government wants to make someone appear as if they are MUI (marketing under the influence) one has to think that what looks like perfectly acceptable guidelines initially, could likely be blurred enough to make life unpleasant for virtually anyone the government wants to target. I’m not a big conspiracy theory guy but I have to think that if the government is given an inch that they will take full advantage of expanded influence and power well beyond a mile.

On the flip side, it seems that this could possibly help the blogosphere by lending more credibility to reviews. Jim Nail, chief marketing officer of TNS Media Intelligence has this to say

“The thing that makes word-of-mouth marketing powerful is people believing they are getting truthful and honest opinions from real users,” Mr. Nail said. “If people start disbelieving word-of-mouth marketing as much as they disbelieve advertising, we are in deep trouble.”

So it seems once again that the free market and some of its underlying principles are not enough anymore. This summer is the timeframe for these revisions to be voted on so change could be coming quickly.

Some fear that if the revisions are approved, marketers could be scared away from new-media marketing efforts.

“It’s possible there will be a hangover period, but it will self-correct,” said Joe Chernov, VP-communications at BzzAgent. “People get nervous when the government gets involved, and it’s possible the blogosphere will influence the trajectory of how brands respond.”

So, Pilgrim readers, how do you feel about the government telling us what can and can’t be said? Does this approach simply turn social media outlets, including Facebook, into another outlet for one way advertising pitches which then renders it no different than traditional media? If the free flow conversation is monitored and regulated what happens to the appeal of being on the outside of traditional media and being more open and honest? With Big Brother wanting to monitor every word and message at what point does free speech stop being free? Let’s hear it.

  • Snir

    It only means international affiliates like myself will have better conversion rates, exactly like it was on the casino and warez industries, and Americans will have a hard time competing. with an offshore hosting and an LLC abroad you should be perfectly safe as well.

  • http://cindikate.com Aaron Ellsworth

    Thanks for the insight and opinion Frank. It is inevitable that the government will attempt to regulate social media. If bloggers are central to the scrutiny, one solution would be to create a required certification program for bloggers and social media marketers that receive any compensation for their work and expect them to use their designation in their work. If certified bloggers are held to a higher standard, it would do two things: 1) build trust and a larger following between the reader and blogger, knowing that the blogger is held to these standards and 2) It would allow the government to prevent many misleading statements and so forth from entering the blogosphere. I know this doesn’t solve all the problems the government is looking to address with social media, but by holding individuals and businesses that implement social media for gain to higher standards it would alleviate much of the regulatory pressure.

  • http://broadstreetinteractive.com/blog/ Charlie

    I think some sort of disclaimer from a paid content blogger is the right thing to do when they are being paid to pitch something. However, I am also savvy enough to ferret out a “pitch” when I’m reading one versus a real testimonial. I don’t think that ability is any new concept to anyone that’s ever bought anything.

    Surely there are some regulations in the future of social media advertising, but let’s hope they are wise.

    Charlie’s last blog post..Get your ad in front of the right audience

  • http://www.xenite.org/ Michael Martinez

    I can see Google trying to unduly influence the FTC to persuade them to enforce Google’s ridiculous linking guidelines with the weight of law. Specifically, Matt Cutts has long argued that the FTC (should treat) paid links as endorsements, even though they are clearly NOT endorsements as defined under current U.S. Law and government practices. Should the FTC side with Google on the matter I can see more than one lawsuit being filed against any such FTC policy or ruling.

    The Federal Trade Commission must not in any way favor a search engine’s business plan. That is completely unacceptable.

  • http://amosgitai.blogspot.com CINEMAeVIAGGI

    Blog should be made by passion… even if… money is not so bad!

    CINEMAeVIAGGI’s last blog post..BEATO ANGELICO IN MOSTRA A ROMA

  • Eric Keosky-Smith

    Wow … what a pathetic use of government resources as well as a major move into regulated speech.

    People will judge people. I fully believe in full disclosure and transparency. Over time the cream (read: truth) will rise to the top. Those that don’t disclose or abuse trust will wane. (If it’s life or death decision – like drugs – ok different story). But otherwise having the gov’t so involved in our lives to protect us from ourselves is just ludicrous ! And this coming from a moderate !!

    Did I say “pathetic” yet ;-)

  • Ciara

    If this happens, it will definitely hurt the word of mouth marketing for businesses. But like someone already said you can usually tell when someone is being paid to talk about it from when they are actually very pleased with the product or service. I don’t think this is a good idea on the governments part because it will make our speech more regulated than what it already is. There should, however, be rules made on social media. Once rules are applied the information will create more trust from the people putting the information out there.

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