Social Media Marketing And The FTC

    May 7, 2009


624824_restrainedDoes anyone else hear Judas Priest after reading that headline? No?

Um, anyway, the FTC has been cracking down on the newer methods of marketing, and social media marketing is not immune as SEOmoz’s general counsel, Sarah Bird, pointed out recently in an interview with Eric Enge. The new guidelines, available from the FTC, appear to threaten the future of SMM. The bottom line?

If you’re being compensated to talk about someone’s product, then you need to disclose it.

Rand Fishkin (you know, Sarah’s bossman) summarizes a few important points for us:

  • Most SMM is okay: “Want to create accounts for your client or project at social sites, interact with the community under those accounts or build up popularity/followers? You’re in the clear, and can do so without saying who’s paying you or why you’re engaging in those activities.”
  • This doesn’t apply to link building: “it’s not relevant to the consumer that an agency or consultant is doing link acquisition, this doesn’t fall under something the FTC cares about.”
  • Nofollow isn’t good enough for the FTC: “you need to label links that have been purchased in visual ways on the page (”sponsored links,” “advertisements,” “supporters,” etc.) to clearly indicate the financial relationship. Google’s guidelines don’t request this human-visible disclosure, but instead want those links to use rel=”nofollow”"
  • Most linkbait, viral content and microsites are okay: “Since viral content is typically free, generally not specifically endorsing a product/service and doesn’t fall under the “paid links” issue, it’s pretty safe to engage in without disclosure”

Rand also offers an important clarification:

It only gets hairy if/when you’re leaving comments or content that endorses a product or company that’s paid you to do so. For example, if SEOmoz hired a social media crew to go say nice things about our tools or post a link to them in every forum on the web where SEO was discussed, they’d need to state their relationship with us each time they engaged in that fashion.

I’m gonna come right out and say what I’m thinking: Did anyone seriously think it was perfectly fine to take money for talking up a product without mentioning you’re getting paid? This goes beyond the paid links/Google/nofollow polemic.

I think the FTC is right to lay down these guidelines (but I do think it’s going to have a really hard time enforcing them). If they turned a blind eye to this, ultimately, it would undermine the foundations of social media marketing itself.

When we pose as average consumers—even if we have tried the product and genuinely like it—and go out to promote a product as part of earning our pay and purposefully gloss over that fact, can we really expect anyone to take any endorsements seriously?

Take off your marketer hat and let’s pretend we’re on Amazon. We’re looking at a book/CD/$6000 television you’re thinking of buying. Better check the reviews. Hm . . . There are 10 reviews—all 5 star reviews. Must be a perfect product, right? Let’s say instead these reviews are posted across the web on various blogs, forums and review sites. They’re clearly written by different people. Convinced to buy that product yet?

Or maybe the company hired a social media marketer. Without disclosure, there’s no way of knowing. Those posts look like organic feedback, genuine buzz for the product. (Hope that $6000 TV works out for you.)

Ultimately, someone, somewhere is going to figure out that all these glowing reviews are coming from someone with a dog in the fight. Once people realize what’s going on, will they trust anyone’s reviews? When you can’t tell the paid reviews (sometimes we call these “ads“) from the genuine ones, you have to discount them all.

Is all social media marketing illegal or unethical? Of course not. It’s one thing to buy ads on MySpace, to create a page for your brand on Facebook, to build an iPhone app. These are situations where it should be obvious—situations the FTC likens to Tiger Woods pimping golf balls on a commercial. We all know he’s getting paid, don’t we?

As Sarah and Rand pointed out, most SMM is perfectly okay. It’s only when we start to pose as consumers while trying to generate buzz, leads and sales for our clients that we run into serious ethics problems—and now the law.

What do you think? Is it unethical to promote a product without disclosing your relationships? Or is that just par for the course these days? And seriously, how is the FTC going to enforce these guidelines?