Tuesday, December 1, 2009

The Day of the Vanishing Endorsements

Thousands of marketing web pages, videos, and even Twitter accounts disappeared today, but there’s no reason to panic. Today is the day when new Federal Trade Commission (FTC) rules go into effect — rules that make it illegal for an advertiser to fake customer expressions of satisfaction.

With the new rules, the television commercial where a football player says, “Most people don’t lose weight like me!” is no longer allowed. Any advertising that shows the results of any one person also has to state the average result. That could be embarrassing for get-rich-quick schemes, if they have to say, “The average person who bought our system didn’t even find time to read it, and among those who did read it, most didn’t understand it, did everything wrong, and lost money.”

The era of paid blog posts isn’t over, but it’s coming out of the closet. Bloggers who are paid to write about a product have to disclose that. Blogs that are fictional creations of an advertiser have to say so.

Most readers can tell a fake blog when they see it, but many people would be surprised at how many blog comments and discussion board messages are paid for, especially by software companies trying to pump up the image of their own products while tearing down competitors. Obviously, a discussion board note from a supposed data center engineer who can’t stand Linux won’t have much impact if it has to say, “Microsoft paid me to write this.” Software companies who continue to pay writers to create the appearance of grassroots support online will be breaking the law.

On Twitter, you will probably see the hashtag “#ad” more often on paid advertisements. That is probably enough to live up to the FTC rules, though experts are not sure. I am not sure what will happen to the fake advertiser-created personalities on Twitter. It is probably sufficient for the advertisers to disclose their ownership of the accounts in the account bios, but that might look bad. In some cases, it might be safer for them to delete the accounts.

The new rules can feel like a minefield to advertisers. This Adweek article sums up a few of the key issues advertisers need to think about: Navigating FTC's Guidance on Social Media Marketing.

And when you see web content that could be an advertisement, you shouldn’t assume that all advertisers will be following the new FTC rules. Advertisers have been ignoring laws and misleading potential customers since long before there was an Internet, and the FTC has a long history of giving big business a free pass when it comes to new regulations. The FTC is talking like it is serious about today’s new rules, though, and we’ll find out with the enforcement actions in January just how serious it is.