U.S. regulators have tried to impose some order on the wild west of the blogosphere by introducing rules that force bloggers to disclose any payments or free goods they receive from firms they are writing about. Anyone failing to do so could be fined up to $11,000 per violation.
The changes are the first in almost 30 years to the guidelines on endorsements issued by the federal trade commission, and take into account the rapid growth of bloggers reviewing products and services online. The new rules also apply to social media such as Twitter and Facebook.
Lot of free products
Alive to the growing influence of bloggers, companies are spending increasing amounts on “social media marketing,” with some influential bloggers admitting they are inundated with free products.
The Word of Mouth Marketing Association, an industry group for social and viral marketing specialists, says $1.35bn was spent on social media marketing in 2007, and that will reach $3.7bn by 2011.
“Consumers are increasingly dependent on the internet for purchase information,” said Jack Gillis, a spokesman for the Consumer Federation of America. “There is a tremendous opportunity to steer consumers in the wrong direction.”
Under another shake-up in the rules, celebrities who endorse products in traditional advertising will be equally as liable as the companies they are promoting, if a commercial makes false or unsubstantiated claims. Celebrities will have a duty to disclose any relationship with advertisers if they make endorsements outside commercials, such as on their own websites.
In addition, advertisers have to make it explicit if they feature a testimony from a consumer that is not a typical result of using their product. — © Guardian Newspapers Limited, 2009