FTC to Bloggers: Disclose Payments for Reviews
The FTC issued rules for bloggers and celebrity endorsers.
The Federal Trade Commission announced plans to require bloggers and celebrity endorsers, an interesting mix if there ever was one, to disclose what the FTC refers to as “material connections” (which could be direct payments or some free products). The revised FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising specifically state that “the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement” therefore covered by this rule. (Another revision requires companies to disclose whether the findings of a research organization that conducted sponsored research are mentioned in an advertisement, the advertisement must disclose the connection between the two entities but this is fodder for another day and another column.)
If bloggers want to be taken seriously, they can’t cross certain lines. These lines include accepting fees or gifts in exchange for positive “ink.” Part of my job as an industry analyst involves authoring reviews of various technologies and I also write product reviews from time to time for several print publications. Most of the products I test come “on memo,” which means they go back after they are reviewed. Occasionally, the manufacturer will offer the opportunity to purchase the item at a price that could best be described as low retail (no hidden discounts here). And for very inexpensive items, some manufacturers don’t want to even pay the cost of shipping the item back so I get to keep a few things now and then.
On the other hand, I sometimes review items that I am paying full price for (Verizon FiOS is a recent example).
Regardless of the situation, behind-the-scenes financial arrangements are simply not acceptable if the writer (blogger) is representing himself to be unbiased. A Wall Street Journal article from April of this year references “Blogger Jessica Gottlieb of Los Angeles” who writes that she “would only write about their products in return for cash” (as the article put it). Gottlieb (quite inexplicably and implausibly) believes that her opinions are “unbiased” despite the crystal clear failure of the wall between editorial independence and advertising dollars (sometimes referred to as “church and state”). Ironically, Gottlieb does get one thing right in her site’s disclaimer: “This blog… should not be considered factual.”
Blogger Colleen Padilla, covered in a July 2009 New York Times article, is doing her readers a disservice if she does not run “bad” reviews, as she told the reporter. If she tests as many products as the article indicates, she would be in an excellent position to provide authoritative feedback on what doesn’t work and what does in fact need improvement. Apparently, she does neither. And that’s a real shame.
On the other hand, Melanie Notkin (mentioned in the same New York Times article), is deceiving herself and her readers. “[Cable network] TNT never told me and will never tell me what to say,” Ms. Notkin stressed. The fact is, however, that TNT is telling her to say “something” and that is significant enough in my view to create a clear conflict of interest. While labeling her posts with “[sp]” may, in her mind, absolve her of this, I would wager that few people reading her posts equate “sp” with a sponsored message.
I do think that Katja Presnal, quoted in the same New York Times piece is on the right track, providing candid reviews and opinions to her readers. Those who follow this path will be the ones whom readers can trust and seek out for more than just a puff piece.
Finally, keep this in mind: bloggers aren’t in this by themselves. Companies are (apparently) paying them for reviews. As far as I am concerned, companies that do this should rethink why they believe they need to pay cash for good reviews in the first place and perhaps use that money to improve their products.
For further details, consult the FTC News Release.
Jonathan B. Spira is CEO and Chief Analyst at Basex.
October 5th, 2009 12:45
One of the reasons that companies are using the web and paid endorsers as their product reviewers is that the business of doing independent product reviews, except for some types of consumer products (think hi-fi and cameras) has essentially evaporated with the death of print. You can say that the companies themselves are responsible, but that’s not relevant: as long as the business model for “web” is what it is, you can’t afford to do the kind of product testing that used to be paid for by trade publications. This leaves the reviewing business to enthusiastic amateurs who generally don’t have the facilities or the depth of knowledge to do a really good job, and those who are being paid in some small or large way by the vendors themselves.
In other categories, such as travel and leisure, we never had a robust and vigorous review business to offer unbiased information on the suppliers–there are niches of excellence (see, for example, Undercurrent’s diving review system) but there will always be 10x the number of restaurants as there are restaurant review slots on reputable printed or online publications (if not 100x).
The web is great, and there are some people making some money off of it, but so far the business model does not support a vigorous, well-trained, and unbiased set of journalists/reviewers/writers not to mention editors, illustrators, and publishers.
We have crossed a bridge with the destruction of print news and trade publications, and we will never go back. But we are also discovering that what is on the other side of the bridge does not fully replace what we have lost.
October 5th, 2009 13:26
It’s not at all inexplicable. You completely miss the point.
If a brand wants me to talk about them, they can buy advertising, but I don’t want to review their products, it’s of no interest to me or to my readers. It’s astonishing to me that you’d think the business practices of a Walmart sponsored blogger are the way to go.
If you ever want to have a discussion about this, you have my contact information, and when I’m directing folks to fact, and statistics it would be great if you were a resource. So far, not yet.
October 5th, 2009 22:16
The fact that a blogger is paid to talk about something doesn’t mean that he is saying this or that is better than the other.
When you have a new product and you believe in it (otherwise why should you invest your money producing it?) paying bloggers to talk about it is a good way to let the world know that it exists.
What is the use of producing something nobody knows?
And it is also a good and effective way, because you get a lot of audience for a cheap price.
I mean, going on TV would be outrageously expensive and prohibitive for a small producer, on the NET he finds the niche market and has opportunities to sell.
Everybody is aware of the fact that if the product is not worth, it won’t be successful, in spite of all the bloggers who can write about it.
I guess the whole campaign is quite unfair.
It is one more on the advantage of the big monopolies.
The Internet is a good weapon against them, here you can promote, sell directly your products and can sell them also at a better price.
THAT hurts.
But it is time this ends.
Those anachronistic monopolies have to die, and the Internet is the right way.
Let the bloggers be the new TV advertisings.
On a blogger’s post Coca Cola and the unknown soda have the same place.
And I think THIS is very good.
October 6th, 2009 05:56
Companies may want to get reviews and often send products in order to get those reviews. In professional circles, there are a number of ethical rules for dealing with this (some publications are more stringent than others) so a mention of a “review copy I received” as part of a review might be enough to cover bloggers on something like this.
Where it is a bit of an issue is if you believe in the slippery slope argument. This step by the FCC opens the door to potentially more regulations of speech on the internet by different government. Up until this announcement, the US position (which was crystallized in ACLU vs. RENO) was that the US government was not regulating speech online, except in some extreme case where regulation was covered as it is is in other speech cases (eg. certain types of pornography).
So disclosure is something that is definitely good but I’m not sure that regulation is the way to ensure it.
October 8th, 2009 15:29
I wrote over a thousand bylined articles for over sixteen print magazines (and some Web sites) between 1986 – 2008.. in one case I remember, although other rags probably did the same thing, (and this was long before the Web or Blogs existed..).. a certain print magazine’s ad sales department would send out an advertising kit to every software or hardware developer / mfr. whose product was reviewed in that issue, and offer them discounted ad space on the page opposite the review of that product..
I have NO doubt that this was common practice, and, in many cases, probably still is..
I always prided myself on writing un-biased reviews.. if a product had flaws (and name one that doesn’t).. I said so.. if it was Golden, I said so.. except for one glaring example (I won’t name any names).. no Editor for whom I ever wrote tried to coerce me or change my writing and put lipstick on a pig.
My reviewing philosophy was and is simple.. if a product was inferior, or downright crap, I said so..
One magazine’s Tech Editor DID overty change one of my reviews from negative to positive.. and he had direct financial ties to that company. This was totally unethical behavior on his part.. inexcusable.. he was actually handing my reviews to the mfrs. and letting THEM make changes and remove negative remarks.. An isolated case? Hardly..
If a mfr. pays for ad space, that doesn’t automatically entitle them to positive reviews.. but you’re kidding yourself if you see product ads in print rags that just happen to be on the page facing a review of THAT product, and think it’s just a coincidence.. it’s not..
Print magazines make over 95% of their revenue from advertising.. the rest from subscriptions and newsstand sales.. some of them will do anything to kiss their advertisers’ butts, out of fear of losing that precious revenue.
Consumer Reports is a glowing example of the way a print magazine SHOULD be run. They buy every product they review, anonymously, including cars. The mainstream automotive rags get specially-prepped cars.
They run NO third-party advertising. One might disagree with their opinions, but you can’t accuse them of queering their reviews because a mfr. paid them to, or because they’re afraid of losing ad revenue with a negative review. In a perfect world, all magazines would behave like CR. It ain’t a perfect world..
And with the explosion of Blogs and the demise of so many print magazines, virtually anyone can throw up a site, declare themselves an “expert”, take mfrs.’ payola with both hands and basically just crank out glorified advertising disguised as “Editorial content”..