In just two short weeks (December 1, 2009), the FTC’s new rules surrounding how companies interact with bloggers will go into effect.  The LA Times has a great article today about the looming crackdown on bloggers and the companies they are blogging about.  The article specifically addresses some rather large concerns that food-product companies are some of the most egregious manipulators of “mommy and daddy bloggers.”

For those that are unfamiliar, mommy and daddy bloggers are typically stay-at-home moms and dads who have taken up blogging.  Often times these bloggers focus on reviewing products that they use on a regular basis and can share their insights with other parents.  Looking at this structure from a 30,000-foot level, it is easy to see the opportunity for corporate manipulation.

But the new rules apply to anyone and everyone, not just the food-product industry.  And not only can the blogger be punished for violating new rules, but so can the company that the blogger is writing about.

Sitting in my chair, this all sounds a bit frightening and I fear that many organizations will view this as yet another reason to not engage with bloggers.  That is unfortunate and misguided.  Ultimately, this debate boils down to ethics.  Companies and the agencies that represent them must operate in a manner that is honest, open and ethical.  Check out what Bob Frause and PRSA have to say about the subject in a recent post.

Think of the FTC’s new rules as a golden opportunity for your organization.  The companies that acted in an unethical manner in the past will have to rework strategies for interacting with bloggers, while your company will already be in the midst of executing its successful and ethical program.  It’s a win-win.

Matt Smedley

Social Matchup

The Chicago Tribune compiled a great visual graph that compared the number of unique visitors each month for Twitter, Myspace and Facebook over a span of about three years.  Check it out here.  It is very interesting to see the growth (and decline in Myspace’s case) of these different platforms and how they relate to one another.

New Rules for Working with Bloggers

One of the biggest bits of social media news this week is the Federal Trade Commission’s (FTC) new ruling as it related to bloggers, ethics and disclosure.  PR firms and companies now need to tread very lightly when working with bloggers as it relates to product reviews and endorsements.  Bob Frause, CEO and founder of Frause, is the chairman of the Public Relations Society of America’s (PRSA) Board of Ethics and Professional Standards and has written a more detailed blog post about the important things to know about this new ruling.

Rouge

Procter and Gamble is launching a new magazine in the U.S., which will be 60 percent P&G-branded health and beauty-focused editorial, 20 percent unbranded editorial, and 20 percent ads. What’s unique is they are engaging the online mommy blogger and beauty blogger community to help start online chatter about the publication. The magazine is the biggest customer relationship tool from P&G ever. For more info check out Media Buyer Planner.

Matt Smedley

The rules of the game have changed.  Tell that to game show host Bob Barker.

That’s the warning which permeates the new Federal Trade Commission “Guides Concerning the Use of Endorsements and Testimonials in Advertising (PDF).”  According to a PRSA member alert sent out by PRSA Chairman Mike Cherenson yesterday (Sept 7), the guides are advisory in nature but Mike says, “they will reset the standards of behavior that public relations, marketing and advertising professional should adopt to avoid violating the underlying laws against unfair competition and false advertising.”  Mike also warns practitioners, “non-compliance can result in a communication from the FTC warning professionals against the potential offending action.”  If that advice is not heeded Cherenson warns that “it may be followed by a cease-and-desist order. Intentional violation of that order may result in referral to FTC enforcement, which may include civil monetary penalties.”  Bob Barker (last host of the 60’s TV game show Truth of Consequences) would not be pleased – especially after seeing the clamp down on the nature of celebrity endorsements.  The rules of the game have definitely changes.  Here’s the text of Cherenson’s PRSA member advisory:

“The Federal Trade Commission (FTC) has issued final changes to its Guides Concerning the Use of Endorsements and Testimonials in Advertising. While advisory in nature, the new guidelines will reset standards of behavior that public relations, marketing and advertising professionals should adopt to avoid violating underlying laws against unfair competition and false advertising.

The Guide changes, as set out in the FTC’s notice, make three key departures from previous guidance that could impact public relations practice:

• The FTC advises that “endorsers” as well as advertisers can be held liable for false or unsubstantiated claims or for failing to disclose material connections between the parties.
  
• The Guides no longer offer the “safe harbor” whereby testimonials can be qualified by a “results may vary” disclaimer.
  
• Regarding endorsements, the Guides specify that celebrities should disclose relationships with advertisers.

While the FTC will approach each potential violation on a case-by-case basis, the new guidelines will impact how professionals should approach some common practice scenarios. Here are some applications of the guidelines:

• Bloggers who receive cash or in-kind payment (including free products or services for review) are deemed endorsers and so must disclose material connections they share with the seller of the product or service.
  
• Any firm that engages bloggers by paying them outright to create or influence editorial content or by supplying goods or services to them at no cost may be liable if the blogger does not disclose the relationship.
  
• Advertisements or promotions that feature a consumer who conveys his or her experience with a product or service as “typical” should clearly disclose what results consumers can generally expect or specify how the results were unique to the individual circumstances.
  
• If research is cited in an advertisement or promotion, any sponsorship of the research by the client or the marketer should be clearly disclosed.
  
• Celebrities who make endorsements outside the context of traditional ads, such as on talk shows or in social media, should disclose any relationship with the advertiser or marketer.

From an ethics perspective, the new guidelines parallel key transparency principles in the PRSA Code of Ethics, as well as Professional Standards Advisory PS-9 condemning “pay for play” practices. However, for practitioners, the guidelines go beyond ethics to recommended practice to avoid legal liability. While the ethics are clear, the triggers and nature of adequate disclosure are not fixed. As I recommended in a recent PRSAY post, thorough understanding and self-regulation can help public relations professionals avoid legal repercussions.

While the guidelines are advisory in nature, failure to comply increases the risk of professionals finding themselves in violation of the law. Moreover, non-compliance can result in a communication from the FTC warning professionals against the potential offending action. If that warning is not heeded, it may be followed by a cease-and-desist order. Intentional violation of that order may result in referral to FTC enforcement, which may include civil monetary penalties.

There has been information circulating publicly on the new guidelines that is confusing and conflicting. With this notice, PRSA hopes to bring members up to date on the facts as currently understood. This information is based on FTC documents and an in-depth conversation with a Commission staff attorney. Going forward, PRSA will continue to provide you with information, clarification, case studies and interpretations as they unfold.”

For more information and late-breaking developments, the PRSA Board of Ethics and Professional Standards is offering a professional development session – “What Does Ethics Have to Do With Social Media Anyway?” – at the PRSA 2009 International Conference, Delivering Value, on Monday, November 9 in San Diego.

Bob Frause