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Arment Dietrich

FTC Guidelines and Disclosure for PR Agencies

By: Arment Dietrich | January 25, 2012 | 
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Today’s guest post is written by Lisa Gerber.

In the past few weeks, I’ve been asked on more than one occasion why we add “(client)” to the end of certain tweets.

In 2009, when the FTC revised their guidelines for online endorsements and testimonials, there was a lot of discussion on how this affected PR agencies and brands when working with bloggers. Not a lot of discussion, however, involved how it affects PR agencies endorsing their clients on social networks.

From time to time, we share a client’s blog or promotion when we know it will add value to our audience. In compliance with FTC guidelines, it is an Arment Dietrich policy to add “(client)” at the end of any communication we conduct on behalf of them.

The question arose because it isn’t an affiliate link, and if we don’t benefit directly, why add it, when our readers are less than likely to click on it?

The FTC Guidelines on Internet Advertising Disclosure specifically state that organizations, experts, consumers, and celebrities must disclose any important connections between advertisers and endorsers.

When there exists a connection between the endorser and the seller of the advertised product which might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience) such connection must be fully disclosed.

In the spirit of broad sweeping regulation developed by government agencies, the guidelines leave a lot to be interpreted.

FTC guidelines are designed to prevent misleading communication. Regardless of the language, why wait for the law to dictate how we should behave? Instead of splitting hairs let’s voluntarily do what is right.

It sets the stage for open and honest communication and it protects the brand from backlash (think Facebook smear campaign and Burson Marsteller).

Ethical online communications involves full disclosure and transparency in relationships of which consumers should be aware.

If we are sharing information on a client, be it a blog post, a promotion, or a contest, we are required to disclose we have a relationship with that brand or organization.

A quick review of how the FTC guidelines affect PR

  • It’s unethical and therefore illegal to write positive reviews on behalf of a client, for example, on Yelp, TripAdvisor, and other user-generated content sites.
  • It’s unethical, therefore illegal, for a blogger to write about a product or service without disclosing if they’ve been paid or provided the product in-kind.

What isn’t clearly stated but is certainly implied

  • It is unethical, therefore illegal, for a PR firm or third-party to share or promote information online about a client without disclosing the nature of the relationship.

WOMMA (Word of Mouth Marketing Association) has implemented a Don’t Tell, Do Ask campaign in support of the guidelines and to protect the integrity of word-of-mouth marketing.

To marketers

  • Don’t tell people what to say. In other words, don’t tell influencers, bloggers, and journalists what to say.
  • Do ask them to disclose the relationship.  Do ask people to disclose if they have received cash or in-kind in exchange for the coverage.

Earning the trust of the consumer is no small feat. The FTC leaves room for a lot of (mis) interpretation with its guidelines. Let’s not get mired in semantics. Simply disclose relationships clearly and openly, and keep word-of-mouth marketing trustworthy.

If you don’t, rumor has it PR Prison is a place without Internet, tablets, and smartphones.

For some excellent bedtime reading, enjoy the full FTC Guidelines on Endorsements here. I assure you it will cure your insomnia.

Thanks to MaximumPC for the image.

58 comments
dhatfield
dhatfield

Thanks for sharing Lisa. Certainly an important read and one that should spark many discussions on how this will be enforced.

 

How many times have we seen a "viral video" that was really just clever marketing? Often they are posted using what appears to be a real (non marketing) person. And what about those unethical competitors who hire goons to write bad reviews?

 

Agree 100% that there should be transparency.

 

Before anything else I am a consumer and I don't like feeling like I just had one pulled over on me.

swonderlin
swonderlin

@megmroberts didn't get a chance to give you a hug before I was done! :-) Hope you have a safe trip home!!! So fun working with you!

64rdb64
64rdb64

I like the approach a LOT! There is no substitute for solid ethics!

vmaione
vmaione

Today there was a blog post on NY Times.com about companies offering product refunds for online reviews. The article referenced the FTC guidelines; titled, "The Review was Fake. The Refund was Real."

RuthW
RuthW

Great article Lisa. The FTC sent out a "gentle" reminder at the end of the year of what their requirements are for transparency and compliance in social media. They introduced their 3 MMM's Mnemonic reminder (http://business.ftc.gov/blog/2011/12/using-social-media-your-marketing-staff-closing-letter-worth-read):

1) Mandate a disclosure policy that complies with the law;

2) Make sure people who work for you or with you know what the rules are; and

3) Monitor what they're doing on your behalf.

FTC couldn't have been more clear about advertisers and agencies responsibilities in disclosure and monitoring for compliance: The recent Hyundai case serves as a reminder that companies who engage in social media should have a policy that provides endorsers with guidelines about what they can, can’t, and must do. It’s not just enough to have the policy in place, however. Companies must also monitor to ensure endorsers comply with the policy, and take action against those who don’t.

Ruth Wagner

VP/Shareholder

CMP.LY

http://cmp.ly/4/gropz5

ginidietrich
ginidietrich moderator

Well, we already know how I feel about this, but thank you for spelling it out. It may not be illegal (yet), but it's good and ethical practice. While some people may argue that client posts aren't viewed as much as if you don't disclose, we've found the opposite. Our clients' traffic has more than doubled with our efforts AND using (client) in all the social media updates.

KirstenAtCMPLY
KirstenAtCMPLY

There's a lot of talk about blogger/influencer disclosure recently. Did you know that quite a few bloggers are reporting that they’ve been asked NOT to disclose in sponsored posts? Yikes!

CMP.LY (yes, I work there) is developing a free bookmarklet app for our users that lets you create disclosures, shorten links and frame pages with customized, explanatory disclosures @EricaAllison . You may access the super beta by signing up for CMP.LY and heading over to the Tools section in the app. Please don’t throw interdaggers at me if you try it and it’s buggy!

A lil background: CMP.LY helps advertisers fulfill endorsement requirements with FTC and other regulatory guidelines and to document their compliance in case they are audited. Additionally, we are working on a thorough integration with Klout, @jasonkonopinski , and our CEO, Tom Chernaik, has recently joined the Member Ethics Advisory Panel at WOMMA. :)

As always, here’s my disclosure: http://cmp.ly/6/bPkcaE

And here’s a post about that eye-opening blogger outreach: bit.ly/yc5h40 (yes, I still use and love bit/ly :)

Dallas Kincaid
Dallas Kincaid

Geesh, I thought I was defending you Lisa by saying I didn't "get" pinterest....how quickly you turn on your fans!

Arment Dietrich, Inc.
Arment Dietrich, Inc.

Dallas, this is about me and my post. Not pinterest and Gini's post. Great, thanks - Lisa

hackmanj
hackmanj

This is excellent info, I did a podcast about blogger ethics with our pal @dannybrown way back when and this was a huge part of the discussion. Way too many people try to dance around this and I think they are insane to do so. It's not just your reputation on the line....

In true and repeatable fashion content geared towards PR and Marketing proves universally valuable. :)

Latest blog post: Better Public Speaking Podcast

vmaione
vmaione

I will pass this along to all my franchise friends. Yes, I actually read the FTC Guidelines on Endorsements! Some of the examples were actually funny.

“...Every day, I drank 2 WeightAway shakes, ate only raw vegetables, and

exercised vigorously for six hours at the gym. By the end of six months, I had gone from

250 pounds to 140 pounds.” You think?

lisagerber
lisagerber

@joeldon Thanks! where was your avatar photo taken? Top of some gorgeous mountain somewhere.

Gini Dietrich
Gini Dietrich

It was a really good blog post. One of your best. But Pinterest is waaaaaay more fun to talk about.

jasonkonopinski
jasonkonopinski

I recall an article in AdAge looking at Klout Perks in particular in the context of these disclosure requirements; I'd wager that most recipients of Klout Perks are unaware about the ethnical repercussions of *not* disclosing when writing a review.

EricaAllison
EricaAllison

I appreciate the overview, and thankfully, don't see PR Prison in my near future. I do share posts on behalf of clients and always add (client) to the tweet. On my FB biz page, I share plenty about my clients, but always let folks know that - probably more than they'd like!

I've just taken on a make-up client and I am working on a fairly aggressive blogger campaign - you wouldn't believe how excited folks get about lip gloss! Our next tier is targeted DMA lifestyle publications and of course, like any client, they want the big guns: national coverage. I know that these journos and beauty editors get metric tons of product samples in the mail, but you rarely, if ever see that sort of disclosure in the magazine, or online.

People always ask me, "how did they get their product in there (whatever the magazine or online review of choice might be)?" As if the editor simply found it on their own. They don't. We send them products and pitch our hearts out. This particular situation begs the question of where that FTC guideline falls when applied to the online magazines reviewing or promoting products. Thoughts?

John_Trader1
John_Trader1

Thanks for the post Lisa, I don't know a ton about this topic and feel smarter because of this post. In the broader effort to bring more credibility and transparency to a field that has a less than stellar reputation in the public's eye is the shared responsibility for all of us. Knowing information like this and more importantly, adhering to it, is a step in that direction.

Ryan Lee Cox
Ryan Lee Cox

lol I may or may not be able to get a comment-network to help you win Lisa. haha that's all I meant.

Ryan Lee Cox
Ryan Lee Cox

I can fix that Lisa if you want to win. #playtheryancard

Lisa Gerber
Lisa Gerber

@KirstenAtCMPLY @EricaAllison @jasonkonopinski Thabks for the great info, Kirsten and the app sounds super helpful. We'll check it out. (and we get buggy so no worries. We're trying to launch SpinSucks Pro) if you ever want to guest blog, we'd love to have you.

shonali
shonali

@lisagerber Ack! Good afternoon (that's what happens when you dig into the numbers). How are you and of course you're so welcome!

John_Trader1
John_Trader1

@jasonkonopinski You would think that this is inherent Jason, but you're right, most recipients are happy to write positive reviews for companies who provide them with perks without disclosing this. Kind of a head scratcher from an ethics perspective.

Lisa Gerber
Lisa Gerber

@EricaAllison Hi Erica,

First of all - oh, I believe how excited people get about lip gloss. I work with someone like that, cough @Gini Dietrich cough.

The interesting part is the FTC seems to hold stricter guidelines for blogs and online magazines than they do for print publications. As I mentioned below, the FTC rep at a session on this topic wasn't able to explain why. Regardless, the online sites should have a disclosure page and link to that page from any article that requires it.

According to the FTC, brands are responsible to make this happen. (SERIOUSLY? Seriously.) WOMMA has instituted the Don't Tell Do Ask campaign to raise awareness that we do need to ask them to disclose. If you click on the link above for the full guidelines, you'll find more about your responsibility.

Lisa Gerber
Lisa Gerber

@John_Trader1 studying FTC language isn't that fun, so I think a lot of us aren't really knowledgeable, but as you say, it is our duty. :)

In fact, I attended a travel blogger conference a few years ago and one of the sessions was on this topic (as it applied to bloggers). They invited a representative from the FTC and even she was unable to clearly answer many of the questions posed. It's murky - transparency and honesty is the safety net.

lisagerber
lisagerber

@shonali No worries. :) I only check in every few hours myself. I'm good. I'm busy. is it still super cold there? my sister was complaining.

Lisa Gerber
Lisa Gerber

@John_Trader1@jasonkonopinski Wow, you're right. really interesting. Most people who receive these perks aren't in the industry so wouldn't even be aware of their responsibility.

Boy, the disclosure police would be really really busy if they actually had to enforce all of this. it gives me a headache.

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