Sunday, October 18, 2009

Hey FTC-Endorse THIS

As you may have noticed, I regularly do reviews and giveaways. I like trying new products and telling you guys about my experience, then giving you an opportunity to win the product itself-it's fun and come on-who doesn't like to win something cool? Unfortunately the FTC just made it harder for bloggers to have access to review and giveaway opportunities.

At the beginning of October the FTC announced they had approved the final revisions to it’s Guides Concerning the Use of Endorsements and Testimonials in Advertising. Shortly thereafter, they released the full text of this new law and the problems were immediately apparent.

In brief, this law requires all bloggers to disclose any material relationships behind reviews and giveaways-which is in itself a good policy that most review and giveaway bloggers already do on their own. [You can see my disclosure directly under my header.] This law also requires bloggers to apply to 'truth in advertising' standards, which again is a good policy and again is already practiced by most bloggers.

Here's the real problem-if a blogger makes a claim about a product that is considered "unsubstantiated" the advertiser is liable. This is an example, directly from the FTC guidelines:

Example 5: A skin care products advertiser participates in a blog advertising service. The
service matches up advertisers with bloggers who will promote the advertiser’s products on
their personal blogs. The advertiser requests that a blogger try a new body lotion and write
a review of the product on her blog. Although the advertiser does not make any specific
claims about the lotion’s ability to cure skin conditions and the blogger does not ask the
advertiser whether there is substantiation for the claim, in her review the blogger writes
that the lotion cures eczema and recommends the product to her blog readers who suffer
from this condition. The advertiser is subject to liability for misleading or unsubstantiated representations made through the blogger’s endorsement. The blogger also is subject to
liability for misleading or unsubstantiated representations made in the course of her
endorsement. The blogger is also liable if she fails to disclose clearly and conspicuously
that she is being paid for her services.

So the question becomes, what constitutes unsubstantiated claims? If I review a candle and I said I find the smell "relaxing" is that unsubstantiated, since that is not scientifically documented? The new rules say it could be-and if it were determined in a court of law that it was not only would I personally be subject to an $11,000 fine but the advertiser would have to pay out as well.

This effects bloggers tremendously-if a company sends it's product for review or giveaway to another company the advertiser is NOT liable for any unsubstantiated or misleading claims, but if they send their product to a blogger they could have to pay, big time. For the record, this law also includes all "endorsements" posted on Twitter, Amazon, Facebook, or any other online venue.

This new law discourages companies from seeking to advertise online directly through consumers and, let's be honest, severely hampers bloggers attempting to make some money via their sites. It takes even more power away from the consumer, who is now liable for their own personal opinions, and makes endorsements a business-to-business transaction.

This is bad news.

Still, even after reading this law, I will continue to do giveaways...provided that companies and advertisers are still willing to work with me (or any other blogger for that matter)...because I still feel that the best, most powerful form of advertising should be the friend to friend, word of mouth, consumer powered kind and that you, my readers, should still win free stuff for being so fabulous.

Free stuff like the Personalized Tote from Noah Baby Boutique that I am giving away through 10/24. It's fabulous and I endorse it. Come and get me FTC.


Helene said...

Yeah, I think it's really gonna chance the way reviews are done. People are going to be overly cautious and it makes me wonder if companies will stop doing reviews/giveaways through bloggers.

I would like to think that many of us bloggers already follow the guidelines anyway. It's just good practice. But you just know there's a bad apple in the bunch....there's always a reason why new laws and regulations are put in place. Cuz someone f***ed it up for the rest of us good guys!

Lorna Darden said...

Wow! That's bad. It's already hard enough trying to make money in this economy, now they make it harder. What's a person to do?

Vodka Logic said...

thanks for filling us in. I think I would still do a review..

Jenny said...

I can't believe they wasted their time on this law. You'd have to be pretty stupid to assume just because one person thinks it "cured her eczema" that it would work for everyone.

This comes down to one person ruining it for everyone like always. A few idiots got mad and now we have this ridiculous new law. URGH!

Muthering Heights said...

What a bummer!!

karen said...

Thanks for clearing that up, it is ridiculous and ties hands that really don't need to be tied. I get disclosing that you are being paid or receiving something in return for a review or endorsement, but the severe fines and penalties given the latitude of the charges is just... a time waster, right?

I just started a weekly newsletter and am working on building a website to house all my info (REVIEWS AND ENDORSEMENTS INCLUDED) so I guess I should start taking this into consideration!

Or not.

Samantha said...

I read about that, and thought about you and the other blogs that do feature stuff. My question is, why are we passing laws that are seemingly pointless when we have other things going on in the world that we should be concerned about? Ugh.

Love the new layout :)

P.S: Sorry I haven't commented much, seems I've racked up on following so many blogs, I've gotten behind on all of my reading!

Sharon said...

Good Morning and Well Said! Seems funny to me that with all the BIG things going on in this world, the FTC is worried about bloggers. Go figure!

Anonymous said...

I think transparency is not a bad thing at all. I'd rather know if someone's endorsing a product with a bias because it's free for them, rather than seeming like they bought it. I realize it may take the edge off the whole I'm just chatting to my buddies about this thing I picked up, but it's more honest. And in a balloon boy world, honesty is something that stands us all in good stead.

As for the 'endorsement' fines - well, I'm on the fence there. I also see how it cramps the 'chatting with your audience' style.

It will be interesting to see how the blogging community rises above it.