The FTC and You: Blogging and Advertising

The FTC has released its changes to the 1980 Guidelines on advertising and endorsement and some of those changes involve considering Blog Posts to potentially, on a case by case basis, fall under the scope of the Guidelines on deceptive advertising.

The question the FTC considers is this:

In analyzing statements made via these new media, the fundamental question is whether, viewed objectively, the relationship between the advertiser and the speaker is such that the speaker’s statement can be considered “sponsored” by the advertiser and therefore an “advertising message.”

Many blogs review products, make statements like “Yay Pepsi” or “Home Depot sucks”, and even get paid to advertise products. Not every instance of a mention of a product will doom the blog to the hell of Guidelines regulation.

The facts and circumstances that will determine the answer to this question are extremely varied and cannot be fully enumerated here, but would include: whether the speaker is compensated by the advertiser or its agent; whether the product or service in question was provided for free by the advertiser; the terms of any agreement; the length of the relationship; the previous receipt of products or services from the same or similar advertisers, or the likelihood of future receipt of such products or services; and the value of the items or services received.

So the first thing the FTC will consider is whether or not a post is “sponsored”, and to do this it will look at things like the history of free products received, the history of the relationship between a blogger and a company, and whether the blogger has been compensated by the company. It is not clear whether or not the product itself is considered compensation, but that doesn’t matter since the receipt of free product itself is one of the things the FTC will look at in order to determine if a blog post is sponsored.

Presumably this doesn’t mean that if you are a review blogger and you receive products to review at no cost to yourself that your blog posts are “sponsored” in the relevant sense. But it also isn’t clear that this is not the case. Because the receipt of products is spelled out separately from compensation it could be interpreted either way. And, with the FTC proceeding on a case by case basis what is considered “sponsorship” on one blog may end up being considered fair content on another.

Paid posts will certainly be considered sponsored. Posts that discuss a product purchased with the blogger’s own money or otherwise not provided directly or indirectly at the cost of the company will certainly not be considered sponsored. It’s the middle ground that gets messy for evaluative purposes, and the FTC has not provided an easy way to tell whether you yourself are going to end up falling under the Guidelines unless you are getting paid to post. They want to see individual cases.

In a spasm of un-speak, the FTC says:

Even if that consumer receives a single, unsolicited item from one manufacturer and writes positively about it on a personal blog or on  a public message board, the review is not likely to be deemed an endorsement, given the absence of a course of dealing with that advertiser (or others) that would suggest that the consumer is disseminating a “sponsored” advertising message.

This is not to say that use of a personal blog means that the statements made therein would necessarily be deemed outside the scope of the Guides; the Commission would have to consider the rest of the indicia set forth above to determine if the speaker was essentially “sponsored” by the advertiser.

This is a long way of saying “don’t feel too worried about receiving and reviewing that single product….but don’t feel too relaxed about it either. We’ll look into it and let you know if we think it constituted sponsorship.”

Further muddling the issue is the value question: the FTC thinks that the value of the product being offered for review is evidence to be used in determining whether or not the post was sponsored. But bloggers have a wide range of prices for their souls: some will sell out for laundry detergent, while others hold out for family vacations. Both bloggers may have been influenced to write a review, and a complimentary one (the issue the FTC hopes to address by applying the Guidelines to bloggers) but the sap who sold his soul for detergent is less likely to be called on it.

(Just as an aside, I don’t care what bloggers do with their blogs. The issue the FTC is looking at is disclosure of material connections. If both of the above-mentioned bloggers disclose the fact that they received the product for free then the FTC wouldn’t even ask the sponsorship question. That question needs to be asked in cases in which the details are not disclosed to readers, so that the Guidelines on material connections, advertising, and endorsements can be applied.)

The point of the FTC looking at blogs and considering the question at all is to prevent deceptive practices in a medium that advertisers are taking advantage of. The worry is about paid endorsement passing as objective commentary. So for bloggers this means disclosing your deal (although if you have no real history with a company or type of product endorsement and you accept a cheap product out of the blue it seems as though you needn’t worry about the FTC).

But bloggers often treat review posts as content. And more importantly, for those who consider their blog writing in some sense creative those post are also creative content. And looking at the apparently rampant product placement in the film and television industry, with no disclosures about which products shown on screen being used and enjoyed by action heroes or sitcom stars are dowried products leaves a terrible taste in the mouths of bloggers who see very little difference between what goes on on screen and what goes on on blog.

Granted, a review post about a product is doing more to pass as objective evaluation (and so possibly to mislead the public if the evaluation is not, in fact, objective, but is instead a positive mention, or pos-men, paid for by an advertiser) than Bruce Willis slamming back a Coke after blowing up a building. But those placements seem, on the surface, to be no less endorsing than a paid review that describes in detail all the enjoyment the blogger received from the product. But the FTC considers one a sort of misleading, or deceptive statement, and the other a sort of fair use. And stunningly, the one that is judged misleading or deceptive is not the one contrived by professional writers scripting an imagined story and actors portraying lives that aren’t their own. Those lies are okay, because we know about them. They do not make a product placement suspect as a misleading or deceptive endorsement.

In fact, the FTC was challenged a few years ago to force producers to place notices, on screen, during product placements in order to inform the consuming public about which shots included paid placements and which did not. The FTC refused, claiming:

The principal reason for identifying an advertisement as such is that consumers may give more credence to objective representations about a product’s performance or other attributes if made by an independent third party than in made by the advertiser itself.

….

Despite the variety and frequency of product placement and brand integration into programming, your complaint does not suggest that product placement results in consumers giving more credence to objective claims about product’s attributes. Indeed, in product placement, few objective claims appear to be made about the product’s performance or attributes.

Which is to say, product placements are okay, since they don’t trick the consumer into thinking someone is endorsing a product based on its qualities rather than based on cash. So there is no need to alert the consuming public that the actor chugging a Budweiser on screen is doing so because the producers were paid to include that beer.

I fear that the changes going into effect on December 1st, 2009 will result in far more blog posts that mimic product placements than they will reveal the compromising relationships between a blogger and an advertiser. There is a perfect model of consumer influence in place with product placement advertising, and the FTC considers those realms to be appropriately subject to the 1980 Guidelines about deceptive claims (Bruce Willis drinking a Coke and it turning him invisible would be a violation, but just saying “ahhhh” would not) without requiring additional regulatory ink to be spilled. Those relationships do not have to be disclosed at all.

So be prepared for many posts from me describing how my day is going, with casual mentions about the fact that I’m drinking a Pepsi, or flying American Airlines, or wearing Nike shoes.

Are we going to be better off?

Comments are closed.