Posted April 29, 2010 4:17 pm by with 2 comments

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The FTC created quite a stir last year when they announced their new blogging guidelines to crack down on bloggers who receive products free in exchange for mentions or reviews. The FTC reassured bloggers that the rumored $11,000 fines wouldn’t affect them, and that these guidelines were intended to target advertisers and big time bloggers who were practically making a living on the freebies alone.

Ooooor not. In what appears to be the first test case of the new guidelines, the FTC targeted Ann Taylor Loft—over $10 gift cards distributed to bloggers after a preview in January. Well, more accurately, gift cards worth up to $500, distributed after Ann Taylor reviewed the bloggers’ posts. (I believe the conclusion we can jump to here is that the cards or their amounts were directly related to how positive the review was.) As Econsultancy points out, this is “in direct violation of the FTC’s new disclosure rules.”

(Does $10 buy anything at Ann Taylor Loft? A bracelet?)

Ann Taylor Loft, according to the FTC, is responsible for ensuring the bloggers disclosed the relationship. However, there are no fines handed out this time. AdAge says:

The FTC said it decided not to take action against Ann Taylor, because, according to the company, the January preview was the first and, to date, only such event. Also, only a small number of bloggers posted content about the preview and several of those disclosed the gifts. A sign posted at the event directed bloggers to disclose the gifts, though the FTC says it’s not clear how many bloggers saw the sign. Finally, Ann Taylor’s Loft division adopted a written policy regarding its interaction with bloggers in February [after the event].

And, says Econsultancy, “LOFT adopted a written policy . . . stating that LOFT will not issue any gift to any blogger without first telling the blogger that the blogger must disclose the gift in his or her blog.” So short of making an announcement during the preview, Ann Taylor did work very hard to try to follow the FTC guidelines. So the first test case may not be very eventful—but the door is open. The FTC has long noted that the severity of their reaction will depend on the product itself. A $25 hardback isn’t going to draw the same censure as a $25,000 automobile.

What do you think? Who came out on top: the FTC or Ann Taylor Loft?

  • Adrian Leaman

    I wonder how long it will be before this is picked up by the ASA in the UK…interesting to see what the IAB in the UK’s view on this form of marketing would be…

    Adrian Leaman

  • I think the FTC barely won this round. Ann Taylor Loft took precautions but obviously they did not stand the test of time — brief though the time may be.

    However, I think we can tally this up to the FTC fine-tuning both their guidelines and their enforcement. There will have to be some give and take for a while until everyone is clear on how much liability the FTC is really putting on the marketers.

    Once that benchmark is established for the “reasonable person”, enforcement will probably pick up the pace.