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Jun 13, 2013

Blogging For Swag Persists Despite FTC Rules

A recent New York Times article examines celebrity endorsements of products and services without disclosing when the celebrity has a financial interest in what s/he is endorsing, which may run afoul of the Federal Trade Commission "Guides Concerning the Use of Endorsements and Testimonials in Advertising," which generally require that "endorsers" may be liable for civil penalties if they make false or unsubstantiated claims about a product or fail to disclose "material connections" between themselves and an advertiser.

But the guidelines, which were revised in 2009 to address online activity, hold bloggers and social media to a different standard than the traditional press when it comes to "material connections," expressly stating that "bloggers may be subject to different disclosure requirements than reviewers in the traditional media." The rationale for this, according to the FTC,is that traditional media exercises "independent editorial responsibility" in writing reviews, while bloggers and social media users may not, and that freebies for traditional news reporters are "reasonably expected by the audience," while freebies for bloggers and influential Tweeters are not.

The Times article notes that "companies and the celebrities they are sponsoring risk being deceptive by not noting that these endorsements are advertisements," according to Mary K. Engle, associate director of the FTC's advertising practices division. In recent years, the Commission has acted against campaigns by companies such as Loft clothing stores, a public relations firm, and a company that sells guitar lessons on DVDs to provide discounted or free products or services to online content creators in return for mentions and reviews.

But the commission has not taken action against prior instances of celebrities endorsing products in which they have had a clear financial interest, including Gwyneth Paltrow's rave review of a hotel in Morocco and an online issue of Details magazine guest edited by actor Ashton Kutcher that profiled several tech companies that Kutcher had invested in.

Nor has the commission taken action against several instances (which I'd described here, here, here and here) in which marketers have provided free or discounted products/services to bloggers, Tweeters, and other online content creators. And the practice continues, as pointed out by a recent American Prospect article whose headline says it all: "Will Blog for Swag."

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