Are Bloggers the New Celebrity Endorsers? Beware the Dangers of Success

Rumor has it that Internships.com paid Charlie Sheen $50,000 per tweet.  It’s been said that Kim Kardashian is paid $10,000 per sponsored tweet, and Snoop Dogg’s tweets fetch $8,000 apiece.  Combined, Charlie, Kim, and Snoop have around 39 million followers – a staggering figure just shy of the combined populations of New York, Tokyo, and Beijing.  And a figure that demonstrates the potential brand exposure a company can receive using social media.

More and more advertisers have recognized this potential and have found that strategically engaging bloggers to promote their brand is a more economical and, arguably, more effective manner in which to promote their company.

According to a 2012 study completed by BlogHer, Inc., more than 61% of women in the United States that actively read blogs report that they have made purchases based on a blog recommendation.  In fact, in what BlogHer, Inc. describes as a “trust test,” most women surveyed believe that a sponsored blog post is more trustworthy than a celebrity endorsement for the same product – a ringing endorsement for the blogosphere’s influence on consumer purchasing trends.

But with success comes additional scrutiny.  In March 2013, the Federal Trade Commission issued an update to its .com Disclosures titled, “How to Make Effective Disclosures in Digital Advertising.” These latest guidelines are based on the same guiding principle that shapes most FTC regulations: prohibiting unfair and deceptive practices across all industries and all media.  The guidelines reinforce the requirement that any “material connection” between the blogger and the sponsoring company must be clearly communicated to the consumer.  But beware – the definition of “material connection” is not limited to money.  Free trial products, coupons, free merchandise, and whether a blogger is an employee must all be disclosed.

What does this mean to you?  First, the FTC will hold you, the advertiser, responsible if the blogger fails to clearly disclose any material connections – even if the endorsement is on the blogger’s own blog site.  Second, you should not only worry about the FTC looking over one shoulder, you should also worry about your competitors looking over the other.  What better way to help slow a competitor then by seeking an enforcement action due to an FTC violation?  Since the FTC’s mission is “to prevent business practices that are anticompetitive, deceptive, or unfair to consumers,” they certainly cannot ignore a claim of such a situation – no matter the source of the complaint.

So how can you fend off these threats?  Here are some steps you can take to protect your ad campaign:

  1. Review the Blogger’s Disclosure.   Any material connection disclosure in the blog post should be clear and conspicuous.   Example 21 of the FTC guidelines provides an illustration of an inadequate disclosure:

 

The disclosure above (which I highlighted in yellow), fails the clear and conspicuous test for two prime reasons:

  1. The disclosure appears in the last sentence after all the product information and the endorsement has been delivered.  The FTC believes that many consumers will never reach the last sentence, so they will never learn that the blogger has a material connection with the company by virtue of having received free product.
  2. The FTC believes that using hyperlinks prior to the disclosure offers multiple distractions, so the reader will click the links and leave the page without ever reading the disclosure.  Distracting graphics, sounds, text, and “add to cart” buttons are also distractions that should be used sparingly and only after the disclosure. Otherwise, the conspicuousness of the disclosure is lost.

The remedies are simple: (a) Place your disclosure front and center.  Consumers will appreciate learning of the connection up front, and you will avoid the assertion that the blogger buried the disclosure; (b) make sure that the blogger places the disclosure at the beginning of each sponsored post.  A blanket disclosure on the homepage of the blog is not good enough; (c) avoid strategically placed graphics, text, sounds, or links that could potentially draw attention away from the disclosure.

2. Use Short Form Disclosures – Carefully.   Bloggers often supplement their blog posts using their other social media accounts.  Social media platforms that have space constraints (like Twitter), does not absolve the blogger from complying with FTC guidelines.  Remember – clearly and conspicuously informing the consumer about the material connections is the key.  The tendency, and the overwhelming urge, to abbreviate everything in Twitter can lead quickly to non-compliance.

Short form disclosures should be carefully crafted to adequately inform the consumer of the essence of the material connection. Using words such as “Ad” or “Sponsored” in a tweet seems to assuage the FTC – although the preference is for those words to appear at the beginning, rather than the end of the tweet.  Stay away from #spon or other similar abbreviations, as the FTC does not believe that such an abbreviation clearly informs the consumer that the post is sponsored, nor does the FTC believe that most consumers understand that #spon denotes a sponsorship.  Remember, even if you believe that many consumers understand the meaning of #spon, misleading a significant minority of consumers is enough to trigger a violation of the FTC guidelines.

3. Don’t Be Creative With Disclosure Timing.  The speed that information is spread via Twitter is not lost on the FTC.  Some companies try to use the speed of information to their advantage by posting an endorsement without adequate disclosure and then having the blogger follow-up with another tweet minutes later disclosing the material connection.  This is not acceptable.  The FTC provides the following example:

Note that the initial post endorsing the product occurred six minutes before the material connection was disclosed.  The FTC finds this disclosure inadequate, as many consumers can see the initial post and then the consumer could stop reading, never to see the material connection disclosure.  The result: a deceptive posting.

If you are considering using a blogger to promote your brand, the material connection must be made crystal clear.  Bloggers are now competing directly with celebrity endorsers as the most visible means of brand promotion. Running a clean social media campaign that complies with the FTC guidelines will reinforce consumer trust in your organization and confidence in your brand.

And with any luck, your message will spread to an audience larger than the populations of New York, Beijing and Tokyo.

Peter J. Caruso II
Peter J. Caruso II

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