Influencer marketing is on a collision course with the US Federal Trade Commission and its new guidelines for endorsements and testimonials in advertising. The revised guides span consumer endorsements, expert endorsements, endorsement by organizations, and disclosure of material connections between advertisers and endorsers. The FTC has already said it expects the revised guidelines to affect most businesses that advertise in the US.
Don’t hit the snooze button on this because you think expert influencers such as industry analysts are beyond the scope of the revised guidelines. Recall the case of Microsoft, META Group and the UK Advertising Standards Authority. The ASA upheld complaints that a Microsoft print ad comparing Linux and Windows(R) costs was misleading. The heart of the ad was a META Group benchmark study. (The Inquirer, 25 Aug 2004)
Duncan and I have written about these guides a few times (here and here). We know the revised guidelines are coming, we just don’t know when. Many, including Ogilvy’s John Bell, expect the new guides to go into effect as early as next month. An FTC spokesman told me this morning that the effective date has not been set; the revisions are still in staff discussion. However, I tend to give John his due. Seems likely that an advertising powerhouse like Ogilvy has an ear or two placed close to the FTC staff discussions.
The revised FTC guides deserve close scrutiny. In short, transparency is no longer an option. You need to provide information about where you’ve seeded free products, services or other considerations in exchange for an endorsement. You may also need to provide evidence of the grounds for an endorsement, including repeatable results that back up claims.
What can you do?
- Team up with lawyers to understand the implications for endorsements and testimonials and to agree on how you will accommodate these guides in your best practices, approval processes and influencer relations.
- Agree on a simple rating system for determining the risks associated with endorsements and testimonials already in use. Come up with one or two criteria that determine each level of risk — high risk, moderate risk or low risk. Keep it simple.
- Review the endorsements and testimonials you’ve already released and rate the risk associated with each. Remember, the new guides will apply evenly to endorsements you initiate and to unprompted endorsements you pick up and use. You are accountable for claims made in both types of endorsements. If you use an endorsement, you’re accountable for it. Come up with an action plan as needed.
- Use your risk ratings to update your approval process for future endorsements and testimonials.
Useful information links:
Old FTC Guides Concerning Use of Endorsements and Testimonials in Advertising
Proposed revisions to the FTC Guides Concerning Use of Endorsements and Testimonials in Advertising, published for public comment in November 2008 (this link opens a pdf)
Extension for submitting comments to the proposed revisions (this link opens a pdf)
FTC press release announcing the revisions, Nov 2008
Related posts at John Bell’s blog, Digital Influence Mapping Project
Transparency is one of the words that has become a victim of Web 2.0. Â Everyone has their own idea of what transparency means in social media, and what constitutes embracing transparency. Â A good example: the recent MobileCrunch expose on Reverb Communications and the Apple App Store.
The plot is simple enough: Â an integrated PR-marketing agency has paid staff (whether employees or interns) purchase its client’s applications and then write reviews on the Apple App store. Â MobileCrunch’s Gagan Biyani raised the flag because the reviewers do not include a disclaimer in each review that they work for an agency being paid to promote the application. Â In other words, not enough transparency.Â Reader responses to the article — from Reverb Communications and 150+ others — reflect the opposing views on what constitutes transparency and acceptable standards of ethics on UGC sites.
This sort of thing is hardly news. Â It’s been going on for years at “reader” product reviews at media sites. Â Companies and their agencies have been planting positive reviews for as long as we’ve been reading them. Â We — the audience — all knew that this was going on. Â The only thing that has changed is the type of site where it appears.Â Few of us are surprised this practice is cropping up in social media and user-generated content sites.
So, what’s the moral of this story for marketers?
It demonstrates that marketers need to get past the notion that it’s OK to each craft our own definitions of transparency. Â We need to come together, as the marketing industry, to agree on a shared definition and best practices for transparency. Â The definition needs to span all the marketing silos — PR, advertising, marketing communications and every other marketing discipline — using social media as a communications channel.
Until then, all marketers are at risk of being viewed as little more thanÂ carpetbaggers intent on plundering social media sites for personal gain.
Richard Stiennon raises an interesting point in his Threat Chaos post, Finding Cool Companies: should analysts who blog at online media networks — in this case, ZDNet — be given media passes to competitor’s events — in this case, Gartner Symposium?
I don’t think so, but it does raise an amusing question of ethics.
Stiennon, a former Gartner analyst, recently launched an independent research and advisory venture of his own, IT Harvest. However, he blogs at ZDNet, along with analyst blogger buddies like Dana Gardner and Joe McKendrick.
Now, Stiennon’s attempt at getting a Gartner press pass was probably more hijinks than not. But consider this: Lots of analysts blog at various media sites. What happens if analysts take to the habit of introducing themselves as bloggers OR as analysts depending on what’s most convenient, or who they happen to be contacting at an organization, or … ?
As always, I hope you’ll voice your opinion on my opinion at the Tekrati blog.
A post in the HP-branded blog by David Gee, “True and Fair View…”, calls for the industry analyst community “to commit to the same standards of transparency, neutrality, governance and liability” as he believes can be found in the post-Sarbox world of financial investment advisors. The post is certainly not an HP OpenView management endorsement of IT analyst research quality or value. In fact, it reads as though Mr. Gee was inspired to write it based on the involvement of some analysts at a recent HP technical event.
Reprinted from Tekrati
Scott Kirsner quotes me in his Boston.com October 18th @Large column on technology. The column explores the need for greater transparency among industry analysts with regards to their vendor revenues.
Mr. Kirsner also quotes Ian Campbell, Judith Hurwitz, Rob Enderle and Tony Friscia from the analyst side, and Nick Desai, chief executive of Juice Wireless, a Los Angeles company that produces applications for mobile phones.
Rob Enderle assesses PR agency and vendor concerns over industry analyst integrity and ethics in an insightful column published by TechNewsWorld. In the column, Mr. Enderle offers a well-rounded perspective on the evolution of the industry analyst practices in question, and describes the typical industry analyst perspective on potential conflicts of interest. The column expands on his comments reported in August in Sam Whitmore’s Media Survey.