So news has broken out about the FTC planning to monitor blogs for paid reviews/links under new regulations (the PDF document can be seen here). The guidelines could be enforced as soon as this summer and would mean that bloggers and affiliates would have to disclose whether or not they are being compensated for any review/link they make for a product or service, be it in payment or free goods. The guidelines could even make advertisers liable for any misleading reviews or claims.
According to Rich Cleland, assistant director in the FTC’s division of advertising practices, the FTC will most likely focus on repeat offenders that continue after a warning to stop. This is absolutely massive news as affiliate marketing and paid blogging has become huge business in recent years. In the UK alone reports from Econsultancy saw the affiliate marketing industry as being worth a staggering $4bn in 2009. New media platforms such as Twitter have become the latest outlet which has employed people to make reviews for certain products or services and the FTC has stated that platforms such as this will not be excused.
Such guidelines could be considered reasonable in heavily regulated industries, such as health care, as bloggers/sites can be liable for any false claims made. However if you are made to disclose the fact you are being compensated for the review/link then this can destroy the integrity of the post and conversely a lot of credibility that has been built up from bloggers. Is this fair to people who genuinely endorse a product they received for free but wouldn’t otherwise have heard of? Isn’t that just good PR?
This also opens up a grey area where you perhaps review or recommend a product you genuinely endorse (which I have done on occasions) without being compensated. How does the FTC plan to judge this? If a blog maliciously makes false claims about a product despite no contact being made between them and an advertiser, can the FTC punish the advertiser?
Apparently the FTC doesn’t quite know how it plans to tackle the problem however just putting word out about this change is surely going to have an almost immediate effect especially as there is a threat of bloggers and affiliates having to pay restitution to customers.
Google are probably rubbing their hands with glee on this one. They have been trying to put a stop to paid links for some time now and have perhaps reached a point where they can’t handle this algorithmically. The FTC stepping in is a sure fire way to cause a stir and help put a stop to it.
This appears to be yet another thing to shake the foundations of online marketing and once again it will be interesting to see how it pans out.