According to new guidelines from the Federal Trade Commission (FTC), bloggers who fail to disclose that they have received freebies when they write about a product can now be fined up to $11,000 per post. The new FTC Guide Concerning the Use of Endorsements and Testimonials in Advertising argues that any post of a blogger who receives “cash or in-kind payment to review a product” should be considered an endorsement. Because these posts are now officially considered endorsements, bloggers who receive freebies must now disclose this fact on their site.
Freebies and the Independent Blogger
While the FTC will obviously have a hard time enforcing these regulations, there can be no doubt that marketers regularly approach independent bloggers (and especially mommy bloggers) with freebies. When bloggers accept these exchanges, they may not always disclose them in the posts that result. So, while bloggers who are involved in these schemes often tend to say that they would have reviewed the product anyway or that their reviews are often critical, there can be little doubt that payments and freebies influence these stories.
These new rules and rather large fines should bring some bloggers and marketers into line, though others will surely continue to push the ethical boundaries. And blogging Payola is unlikely to go away completely because of these new rules.
This marks the first time the FTC has updated endorsement and testimonial rules since 1980. The new rules also take on celebrity endorsements. If celebrities endorse a product and make false or unsubstantiated claims, or don’t disclose ‘material connections’ between themselves and the advertisers in ads and outside the context of the ads (talk shows, social media, etc.), these celebrities can be held liable under the FTC Act. Judging from this, it would seem that celebrities who tweet about a product they endorse are now risking large fines.
