I have been doing my fair share of research on the Federal Trade Commission in the last couple months. My capstone project is centered on the regulation of advertising and through my research I found the guidelines to advertising according to the FTC for many different outlets. The FTC is in charge of protecting consumers from deceptive practices and unlawful strategies. I was intrigued when reading the new guidelines regarding word of mouth advertising or blogging. The FTC believes that bloggers should state their association with a company as they might be publishing a bias opinion on the product or company if they are compensated. If this word of mouth marketing is not credible then the marketing may not be trusted and found to be deceptive.
I remember learning about a one of these deceptive blogs last year in my public relations class. The blog started in 2006 by an American couple, Laura and Jim. Their goal was to visit every Wal-Mart in America. The blog was interestingly named "Wal-Marting Across America" .The couple would blog about their travels and the friendly staff at each Wal-Mart. A story from Business Week reported that:
"Every Wal-Mart employee that Laura and Jim run into, from store clerks to photogenic executives, absolutely loves to work at the store. Sound like a great Wal-Mart publicity campaign? Anyone familiar with Wal-Mart and its reputation for being quite stingy with wages and benefits will roll their eyes at such a rosy picture. In fact, some critics are so skeptical that they wonder whether Jim and Laura are real or whether they were concocted at the company's headquarters in Bentonville, Ark"
Over time this blog was found to be a hoax. The family was paid by Wal-Mart to go across America and to "blog" about the stores. The evidence proved the blog to be bias and not credible. If the family had not been compensated for their traveling and blog, then the American public might be more persuaded to go to a Wal-Mart store. Nice try Wal-Mart.
The FTC is making sure these kinds of mishaps do not occur to influence the American public. By composing new guidelines they are protecting the essence and credibility of word of mouth advertising.
Summary of FTC Guidelines:
- Advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect.
- "Material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed.
- Both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement – or for failure to disclose material connections between the advertiser and endorsers. The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.
