On Monday the FTC handed down some new rules that left most of the blogosphere very confused. And reading the actual FTC document does not help too much. I called an emergency Town Hall meeting on Tinychat and got some awesome people to show up. Shawn Collins, Mike Streko, Loren Feldman and even John Chow showed up within a moments notice to discuss this topic. We also took questions from the chat room where we had about 150 people in and out.
It was a great discussion and I loved the format. Its something we are going to pursue in the future.
Ok so lets dive into this.
Paid Endorsements on blogs
This is the one everyone is running with. Forbes.com does the best job on this because they actually have a semi interview with some agents from the FTC asking them to go into more detail.
The gist of it is if your compensated in any way need to disclose that relationship.
Did you get a free product to review? Then you need to disclose that the company sent you a free product.
Did you get paid to post something positive about X then you need to disclose that you did.
The FTC also says they are going after employees of companies. From the forbes article:
The FTC also plans to crack down on company employees posing as citizen bloggers, a practice known as “astroturf marketing” because of its fake grassroots style.
Its nice to see some company men immediately following this new rule ;). (by the way I work for shoemoney media)
While I am pretty sure Google will use this as a new weapon for combating paid links, the document in no way addresses paid links.
I am curious where we stop? Lemme give you a few scenarios:
1) I do a paid $5000 paid post from Google about AdSense
2) I do a paid post from Google where I get paid $100 per new user I get to sign up for AdSense.
Those 2 posts could be written completely different. Maybe disclosing the exact amounts paid is where we are headed?
Again for instance if a certain Google employee making 100k/yr is blogging about his company on his personal blog thats one thing.
But if that same Google employee has stock worth hundreds of millions of dollars then perhaps that should be disclosed since he can single handily move the stock price up or down, do you think he is every going to blog negatively about his company
Where is this going? How in the world are they going to enforce this? I am guessing we will not see 1 case come from this.
Accuracy of statement of earnings
Now here is the part nobody is reporting on but I feel will have the most impact. If you are going to report earnings they now have to be accurate. This also goes for any sort of “results”. Obviously this is totally targeted at the fake news and blog websites. I think we will see heavy enforcement in these areas from these new rules.
From the actual document:
Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides â€“ which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as â€œresults not typicalâ€ â€“ the revised Guides no longer contain this safe harbor.
In the last 48 hours I have been contacted by agents inquiring about fake blog and news sites. They are coming for these guys.
But lets be honest. $10,000.00 is nothing to one of these fake blog/news sites that are making that a day. But as it was pointed out in our town hall meeting it could be per instance and instance could be counted as per visitor.
Either way they are going to make an example out of these fake sites VERY soon and thats going to be interesting to see.
81 thoughts on “What You Don’t Know About The New FTC Rules On Disclosure”
Great, the good ole story of a few bad apples ruining it for everyone.
Except it’s not a few
Wow, so this kind of changes things.
I wonder what this means for agency types. If I work at an agency and talk about my one the agency’s clients, does that count. Because, sure, the client pays the agency, but they don’t pay me. And I get paid by the agency, but not necessarily for that post. And what if I don’t even work on the account.
I’ve talked about clients before, sometimes they’re clients I work on, and sometimes they’re not. Sometimes I disclose that “I work for so and so which provides xyz services to so and so” and sometimes I don’t think it’s relevant to the context.
So no more news/flogs? Or you have to have more safeguards in place to show it’s an advertisment over a real life testimonial?
Also, do you know anything about the FTC’s powers internationally? I’m talking, Canada, UK, Australia? Or will they go for the US guys first?
Time to diversify.
Actually Canada and the UK already have MUCH tougher laws in place for this. The USA is behind in going after fake ads.
What if you’re promoting rebills with flogs. You are located in Canada or the UK, but you’re promoting to users in lets say Australia.
Would the UK/CA govt go after you, or would the AUS officials?
No, Canada does not have a tougher misleading advertising law than the US. Indeed, we are moving in the opposite direction.
While you are correct in identifying the critical issue concerning the removal of a safe harbor for testimonials, you have failed to understand the real target: promoters of affiliate marketing schemes who do not have any underlying data on what the average consumer made using the scheme.
Europe and the UK are much tougher on B2C which is where the diet stuff certain falls.
On B2B certainly in the UK it isn’t quite so tough – different rules totally.
Someone has already droped one link to me here from the comments but another won’t hurt as I have covered the UK side of this quite extensively.
What is interesting is that the lawyer who responded in the comments, Susan Singleton who really is an authority said that just the act of her dropping a link in the comments which might be looked on as advertorial and thus fall under the same rules and be liable for prosecution.
p.s. the comment entry box gets real narrow when the threads become deeply nested.
I think this is going to be pretty hard to enforce!
Freedom of speech without government interference still lives strong just 45 minutes off the coast of Florida at our data center in Nassau, Bahamas.
Thanks for being a leader in parsing all this out Jeremy. I read a recent blog post at this guy’s (Andy Beard – http://andybeard.eu/304/google-requiring-affiliates-not-to-declare-ftc-womma.html ) website where he shows how Google’s Referral service’s terms of service tells publishers they can endorse the products (ie. Firefox downloads) all they want, but they better not tell their visitors they make money from the ad. I thought this was so interesting in lieu of what the FTC has passed.
I think I speak for most when I say we’re confused as to the implementation of these disclosures. The proper placement isn’t addressed in the guidelines.. for instance, can they go in the sidebar as opposed to under the main content? These things would be useful to figure out. Maybe we’ll never get answers.
I really hope you continue to talk about this Jeremy. You’re a voice I look to for advice and information.
It’s all about trying to make sure people can trust what they actually see on the internet, which to your point…is hard to do.
But big media sites like FoxNews.com has advertisers on their site like these:
These big media sites could help by controlling what they allow on their sites.
It’s my feeling that it’s these types of sites that the FTC is targeting. Not someone like this site or JohnChow.com which are real sites with real content.
Mostly adsonar caters to these scam sites letting them advertise.
Like all rules passed by Government these will be applied only when they want to and not across the board.
Just imagine Anderson Cooper from CNN is covering a story in D.C. on Healthcare, at that meeting is some lobbiest from either side and they offer to take him to lunch to discuss it further or fly him to some Town Hall, will we see him or CNN disclose this anywhere on their so called “blog” sites? Will the FTC go after them, depending on the slant of the story and which party is in office. Will we see any of these reporter “bloggers” disclose any of the freebies they get?
Just more useless babble from D.C. with no intent of actual enforcement unless it ticks off the wrong person.
Lots of new rules… I wish they applied them to politicians first.
Jon @ WoodMarvels.com
I definetely think the only reason this rule came about was because of all the fake blogs promotin Acai Berry and other worthless products. If you are doing legit reviews of actual products you are probably the least of their concerns.
Do you think outlining that you are being paid to review something on a privacy page one time is sufficient though or does it need to be every post?
Man who knows.
The big thing is if your investigated YOU LOSE. Even if you are found innocent. The government has the cash to take it as far as they want and it will cost you hundreds of thousands to defend it.
So I guess you want to do as much as you can not to get them to come at you.
Why can’t we just hold the consumer responsible for deciding whether or not a product is legitimate.
Yo idiot! Before you buy that acai berry why don’t you ask your doctor if it will help you lose weight?!?
Maybe if people did a little of research that didn’t involve reading the wiki that was written by the fake product site’s author they would not get ripped off.
Stupid government trying to protect the lazy consumer.
I don’t know where that forex link came from. It isn’t mine so if you would like you can remove it.
God I wish man!
The problem now is we are in this “Death Spiral” of consumer protectionism. People now rely on the safety net of the government which makes them all the more succeptable to scams.
Come on… the acai berry thing might be an obvious “ask your doctor” moment (for those of us that have doctors to call – for several million people, that doesn’t apply). But what about things that aren’t so obvious? There has to be *some* level of regulation and government oversight, even if these current changes are going too far. Scale them back, but don’t eliminate them completely.
If I remember correctly it was in early march of this year when the FTC called their first conference regarding the acai and fake blog issue. Which was during that crazy two month long sell off to 6500 at the DOW. Thats also about when Acai berry products peaked in popularity.
We, the industry as a whole really shot ourselves in the balls. Gaming the stimulus at the worst possible time wasn’t exactly a good idea either. Then there was that whole acai berry topless wrestling flap. That really made us seem like top notch professionals.
If you taunt the bear it’s going to come and kick your ass.
This is a great post, I am very new to blogging and had no idae about the FTC nor that there were rules, Could you send me a link if possible or post one for the FTC site.
Its linked in the post
Great Post! Ireally had no idea that there were such rules. Unlike for most of these bigger companes a 10K fee would be a huge hit towards me!
thanks again for the post!
BTW….how can I send you a shirt for T-Shirt Friday!
there is a link on the bottom of every t-shirt friday post:
Let’s be realistic. This is going to be very hard to enforce.
Man, I’m thinking about John Chow right now. This poor dude only does paid posts and fake reviews and stuff. All of his posts will now have to start with “I got paid to write this”. Or maybe that will motivate him to write interesting posts for once?
I think John is pretty open about posts he is paid for.
I am unclear on non-endorsement affiliate advertising or adsense advertising. Will we need to disclose anything realtive to these relationships?
Wow, that is crazy! Great information, I can’t wait to read some of these disclosures in the near future! LOL Your Disclaimer is the best I have read so far.
This is going to be interesting, I wonder what the next big money making landing page is gonna be 🙂
So what about all of the Public Relations firms in this country or the thousands of PR Consultants?
Would they be expected to disclose the amount of money, travel expenses paid for and all review products received in order to do their job?
This whole thing is ludicrous.
So how’s life in the Bahamas Richard?
I see this mostly as more ammunition for enforcers to use on scammers. It’s like having an air freshener on your rear view mirror, no one is going to pull you over but if they do for something else, they’ll tack that one on.
I think it’s great because it makes life easier for people who don’t include fraud as one of their marketing angles.
it is sad that common sense is not the ultimate rule…In the acai case, a simple research outside the internet could help… ask your doctor… acai is a great product with many qualities but lose weight ain’t one of them… I understand why they bring those rules up… to make sure anytime you write something, you do have a proof or be able to back it up with a study or a real personal life with proof… at least those auto generate content are almost useless now… that’s more work for real writers…
However, there is still many grey areas.. . one word make your audience happy with quality stuff and you will be just fine… I think
REALLY IMPORTANT UPDATE!
It’s been WIDELY reported that the FTC will leverage fines up to $11,000 per violation of their new testimonial and endorsement guidelines which target bloggers and other Word of Mouth marketers.
HOWEVER, the FTC has either backed down on that or changed their tune.
Richard Cleland, assistant director, division of advertising practices at the FTC was interviewed and clarified lots of details, and also said they don’t plan to fine anyone.
FTC Responds to Blogger Fears: “That $11,000 Fine Is Not True”
He also responds to the question HOW do bloggers need to disclose by saying it’s up to us. So be sure to read that part.
Additionally he talks a little about how enforcement will be handled.
So… do you think they are back peddling or do you think all the initial news reports about the fines were wrong?
At any rate I think you still need to be careful and disclose, but things are a little more clear now after reading the Fast Company Article.
FYI Here is a NIFTY little Disclosure Policy Generator you can use.
This discussion is an interesting one for sure…I’ve already taken heed.
(love your disclaimer Jeremy)
In terms of priority, the FTC seems to have a lot of blogs to go through before they get to everyone IMHO…but protect yourselves out there…an $11,000 fine might not ding some of your pocket books…but no sense paying it unnecessarily.
i don’t see what the big deal is. Just keep your sh*t legit, stop trying to scam people and you’re fine.
it’s funny seeing morons point the blame at consumers, when they brought this upon themselves.
Interensting. I guess it’s time to change the wording around to advertise the products. 🙂 Perhaps looking up testimonials on other sites and link to them as a reference would be a solution. 🙂
The blogsphere is filled with technology, software, gaming and gadget reviews. The problem has been too few negative reviews. Rumors have been around about writers being fired for writing poor reviews on blogs/site that have a direct interest in selling that item.
If you review a comic book and say it is good and have a link to buy that review comic book there is a direct profit to post. A Journalist doesn’t make a profit from one review of a comic book, he/she makes it from being paid to write. There is a difference.
I have been starting to write my full disclosure, which has been included in the mission for the community blog The Contemplation (thecontemplation.com). We are now working on a disclosure for our affiliate, advertisers and will include a link to each review to our disclosure page. (http://www.thecontemplation.com/index.php/about/disclosure/)
We will be going through all our review process and any affiliate programs to make sure it will not conflict with the new disclosure requirements.
I am glad this is happening as a blogger, reader and the ultimate desire to keep updated on all technology. Exciting. Imagine anyone who is giving a review of Windows next OS or review of games will actually have to acknowledge to what means did they do the review.
This will bring a new level to the blogsphere and bring out the accountability to slowly weed out profit for professionalism.
I’m willing to bet they will make a few examples, but do you really think they have the resources to crack down on the millions of blogs out there?
How about adding this to the scope of politicians being more explicit with their gifts first.
Obama(Or insert any politician here):
“I support and am pushing for this policy because company x, y, and z, gave me n amount of dollars and bought me this m square foot home.”
How many politicians had to have been scammed by the acai crap in order to pass this?
I think its awesome they clean up the industry. No way to enforce this across the board Easy enough to go offshore with your marketing models
Its kind of stupid not to follow the norms. Because after some time you gonna get your arse kicked.
I understand wanting to protect consumers from scams, but why not just go after them under false advertising? The laws against false advertising might not protect them from these scams currently based on their wording; however, they could easily make changes without jeopardizing (and pissing off) a ton of legitimate online marketers.
Disclosing that you are receiving profit from something seems completely reasonable and really shouldn’t change things much (provided you are ethical). I think requiring providing specific details to the public is outrageous. TV Networks aren’t required to display how much they are paid to show paid programs or commercials, why should online marketers have to?
Another FED campaign. Look, the only people that will be affected by this are the major companies who are also major violators. If you are Joe Schmoe, no one really gives a crap. This is really just a s campaign to scare the spammers and the link buyers, yet again. So, if you own a link building company that offers reviews, you need to think about your stance as a company for your consumers sake (hey, it`s only fair). But, if you are a link buyer, I don`t think you should be too concerned (again, unless you`re a big company buying high profile reviews) since there is really no way to prove you “bought” a review in the first place. Who is Google or even the FTC to say you bought anything? Go ahead and prove it… I dare you.
It is because of these people abusing the system everyone else has to have total disclosure.
Great post. I did a podcast with Ted from IZEA and Michael Gray eariler in the summer on the same topic. Good listen – Ted was even involved with the FTC on how they could create and write the guidelines for sponsored blogs/conversations.
Overall, these should be good changes, but some of it’s pretty out to lunch. The end result of some of it pretty ludicrous.
I’m very curious how testimonials are going to be handled? I don’t like the idea of soliciting for testimonials, but that seems to be what a lot of people do. I read that such practice will also have to be disclosed. True?
I have a golf blog where I will do reviews on golf related products and I will have people send me free equipment for me to review and then post about on the blog. I’m assuming that I now need to disclose this to my readers. I don’t always like to say “hey, bill over at Titleist gave me this free sand wedge so I’d do a review for him”. It sounds like though I will need to make sure my readers are aware of this from now on.
FTC is not cracking down with 11,000 Fines. They retracted. They will send warning, followed by Cease and Desist.
I don’t agree with flogs, however I do feel that the consumer needs to be more proactive in researching products which they purchase and consume.
I doubt there will be many fines handed down. How can the FTC possibly go after and police the internet?
I remember when the Do Not Call list went into effect, I was doing sales and there were dozens of successful people working at the same office I was at. When they told me to be successful I had to cold call, I said “what about the DNC list?” The response was “How many people do you know who have got fined? ….ok start calling”. Not one person I ever heard of in the industry I was working in ever got fined?
you never got fined? That is because you never called me you prick, I would have filed a FTC complaint on your ass. I have done it to 3 telemarketing jerkwads and will keep it up as long as they keep calling. Just go the the FTC website and fill out the form, it’s simple.
damn it.. when there are lot of company thinking about a new system for blogger so they can easier to make money . FTC comes with their such rule
Thanks for your perspective. Gonna be interesting to see who they nab first to make their ‘examples’.
The FTC is great at coming in and laying down rules that are vague and not easily understood. They like to leave alot of grey area.
The FTC is just mad because their fat asses got rebilled for some berries and they don’t know how to get out of it.
FTC’s rules have quite a lot of loop holes as you have rightly pointed out, Jeremy. If they wanna target those fake ones out, then it was essential on part of FTC to have clarity to ensure that!
dude i can’t make any sense of your comments.. i mean you’re obviously here for a back link and not interested in the discussion.. but for the love of God make some sense when you comment…
Shoe, i don’t understand how you even approve this sort of trash…
Thats why we have a ratings system. Comments will be sorted by user rating eventually. Your trash might be someone elses treasure 😉
How much money does the government give each child for a nursery place?
FTC’s rules have quite a lot of loop holes as you have rightly pointed out, Jeremy. If they wanna target those fake ones out, then it was essential on part of FTC to have clarity to ensure that!
Sorry… forgot to say great post – can’t wait to read your next one!
I think this is good news and I nice step forward.
There are definitely many bloggers (and especially in the MMO space) that seem to be more about pushing products and making a buck than really helping out their visitors. The problem is, some of these people are very good at spinning their recommendations. And it doesn’t seem to hurt their readership so I guess it will carry on.
Perhaps full disclosure will help people open their eyes. But I suspect bloggers will find a way to spin it – hammering home the cliche “this is an affiliate link but it really is a product I use, honest”. That the product provides lifetime referrals and makes up a large % of said bloggers income is just coincidence!
(just to be clear – I think there are many bloggers who genuinely care about their site and readers – and we love them for it)
My o my, web marketing has entered a new era. An era which will revolutionize those who can and can’t.
Perhaps this will create a better environment for some where more actual “work” will need to be done, instead of just copying someone else’s “flog” and advertising it with whatever PPC network you are using.
This will definitely eliminate some of the weaker competition. Only time will tell how this will effect us.
Shoe, thank you for bringing this issue to the Community.
1) IMHO, it is NOT prudent to rely on the recent statements of Richard Cleland, assistant director, division of advertising practices at the FTC. Here is the best comment on his statements I have seen:
“Dear Mr. Cleland,
Sure, you can say that the $11,000 fine is “not true” and talk about worse case scenario, but what you’re saying in these interviews does not match up with the guidelines as written. The guidelines, while possibly well-intended are now a blanket that include all of these little blogs. Enforcing them might seem like a ridiculous idea, but why would you create blanket guidelines without intending to enforce them? That’s saying “hey, we’re making these rules, but don’t worry about that. Even though they clearly state that they affect you, we’re not really going to bother with you.”
Please rethink this.”
Fair use exstraction from above: http://www.fastcompany.com/blog/jennifer-vilaga/slipstream/ftc-bloggers-its-not-medium-its-message-0
2) Have your attorney review the law as written and then take action. Follow the advice of your attorney.
3) When in doubt, disclose and try and comply with the “letter and spirit” of this new law
4) A couple of you missed Shoe’s statement which bares repeating: If the FTC decides to investiage YOU, you have already LOST big time. Legal bills for YOU will be huge.
5) I’m still not 100% sure how to comply. It would be great if Shoe and Chow deployed compliance on their sites? 🙂
With regards to flogs, why haven’t the actual sellers of the product gotten into trouble? They are the ones billing crazy amounts of money and not letting people cancel. IMHO, the people taking the CC and charging it are responsible. Not the marketers. Or maybe they have gotten into trouble and I just haven’t heard?
I wonder what a Multi-affiliates website disclosure will look like 🙂
I think the new rules are a good thing for bloggers and a bad thing for the companies selling products with the held of bloggers. Disclosure is something most bloggers don’t mind doing because if they were allowed before to disclose they still got paid.
Had not heard about this. Thanks for letting us know about the new FTC rules.
The most vocal bloggers on this issue are the ones that make the most money from paid reviews.
Wouldn’t that make sense ? =P
I dont think the FTC wants us to disclose the *exact amount* we were paid – they just want us to disclose that we were paid, if at all.
(BTW- they have agents to discover how much you were paid – and calculate your tax ;P)
Am I right Jeremy?
Nice to see so fast response from big bulls. But just wait for few weeks and all clouds will be clear.
I am sure FTC will bring some changes as well … just wait and watch.
For the benefit of some of your readers, and their lawyers, who may have encountered those agents before, did the gentlemen or lady agents look or sound like them men in black?
I really feel as though this will be loosely enforced at best. Truthfully, the scope of this whole thing is monumental, and furthermore, the cost to pursue these cases will be astronomical. I think the public would be very upset to see their tax dollars wasted on trying to validate the effectiveness of acai berries through lawsuits.
since when did the cost of prosecuting something stop the gov from doing it? Since NEVER… I don’t see them going after any bloggers unless there are complaints. Then… the men in black will saddle up and come for you bunky….
I don’t think the FTC is going to have a clue on how to regulate this. What scares me more is if they try doing it in all the wrong ways. What’s the end result going to be for us bloggers?
If the FTC now says that it won’t fine bloggers $11,000 for breaking this ruling then what’s to stop an unethical person from breaking the law?
Another question I have is about reporting back to the company of the product you’re reviewing. Even before the FTC ruling I disclosed where or how I got the item. Sometimes companies give me sample products to review and I always disclose that I got the item for free. That way the reader can take this into consideration when reading my product review. In those cases, I email the company the URL of my review post as a courtesy. Although some companies ask me to do so too. Fine by me.
However, I also write about/mention products or items that I already own to complete green and home improvement projects. Now do I have to track down a representative for that product and send them the URL of that post to comply with the new ruling?
Thanks for sharing this, I’ve read the report and had some questions. Thanks for the clarification on these issues.
If they wanna target those fake ones out, then it was essential on part of FTC to have clarity to ensure that! thanks for share.
It’s a hard law, I just can’t think of a way how can they implement them. How I wish consumers are smart enough to decide what’s real and what’s fake products.
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