FTC Cracks Down On The Shills Of The Blogosphere

thou shalt not shill

Image by duncan via Flickr

Very little irritates me more about online life than undisclosed consideration. This is the practice of marketers passing out free products, services or money to bloggers who then favorably review the product without disclosing the freebie. It poisons conversation, distorts history and lends precious credence to the braying of marketing chumps and others who treat everything on the Internet as an exercise in “brand building”. Those of us who’d rather not adopt the habits of bullshit purveyors as we conduct our own lives and pursue our own tastes and interests don’t play around with our reputations by omitting potentially coloring circumstances from our writing. The problem is, undisclosed consideration makes it difficult to identify who is crapping in the well and who isn’t.

This practice wasn’t invented in the blogosphere. I saw it for years, albeit with more transparency, working behind the counter at Pravda Records in the late 1980s. Every month, writer after writer for local and national music magazines came into the store to unload their promo CDs to us for a couple of dollars apiece. It was widely known that the records they reviewed weren’t something they paid for, and that the extra dollars we paid them for their Guadalcanal Diary and Slammin’ Watusis CDs were part of the perks of their job. The arrangement didn’t necessarily ensure positive reviews (who could suffer through Concrete Blonde and not cry for help in print?) but neither was the process presented as “I’m a guy who bought this and this is what I think”.

Today’s blogosphere has compelled trillions of words and indulged hundreds of millions of motivations for those words, not all of which can be trusted, but practically all of which enjoy a benefit of the doubt purely because they’re on blogs and blogs are individuals writing opinions, right?

The Federal Trade Commission seems to think so, and have moved to do something about the problem of undisclosed consideration on blogs. Starting December 1, the FTC will fine bloggers up to $11,000 for failing to reveal material connections to what they write:

“The revised Guides also add new examples to illustrate the long standing principle that ‘material connections’ (sometimes payments or free products) between advertisers and endorsers–connections that consumers would not expect–must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other ‘word-of-mouth’ marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.

Of course this won’t catch 90% of what goes on out there, but that’s not the point.  It’s a bulwark against a burgeoning shillocracy and it will turn some heads that need turning.  Any move to bring greater media literacy is a move welcome in these parts, even if it comes almost  twenty years too late to disclose, say, Bill Wyman at the Chicago Reader’s “material connections”.

Reblog this post [with Zemanta]

4 Responses to “FTC Cracks Down On The Shills Of The Blogosphere”

  1. 1 mike h
    October 5, 2009 at 2:17 pm

    Intriguing reading from RW370 as usual. This whole idea begins to address the concept of sponsored conversation on the web, but the issue is far too complex for this memo from the FTC to fully address.

    First of all as the FTC states, these are guidelines, not laws. So enforcement will be very difficult – and expensive given the vagueness of the document. I think issuing this report will stir the conversation (unsponsored of course) but nothing will materially change because of it. The biggest offenders may give pause, but really how can a blogger be held accountable to these rules?

    My unscientific guess is that less than 1% of bloggers will make $11,000 in an entire year of gross revenue. Maybe even an entire decade. So a fine like that surely would be viewed by any court as onerous.

    Now where exactly is that line? Sure, it is clear in a written review where an author is clearly endorsing a product. But how about an affiliate link; is that considered a sponsorship? Let’s say a hobbyist runs a photography site. To defer expenses (in a most modest way) they run an image of a cool new lens on the right sidebar of the blog and that clicks through to Amazon for more information and the opportunity to purchase. The blogger may benefit from an eventual sale, but need this be tagged with a disclaimer? What if this photography site has useful deep-niche affiliate links throughout? The reader may be pleased by such rich information being posted in one place and the blogger could have multiple affiliate links blended with content. Is this immoral or a crime in the eyes of the FTC?

    Twitter has emerged as a tool for marketers as well. Can one reasonable expect to include a disclaimer in replying to a request for help or a recommendation with an affiliate link? …all in under 140 characters?

    As usual the Feds are way out of their league in trying to legistlate such a thing. Really isn’t the best way to police the internet to do so as a community rather than handing down such ridiculousness from the government? It should tell you something the last time they revised these rules was in 1980. The marketing world has aged a thousand years since then.

    Ok, now I’ll sit back and wait for the next RW370 blog entry on Bill W’s alleged situation 20 years ago…do tell!

  2. October 5, 2009 at 4:29 pm

    Miguel! Always a pleasure!

    Let me first suggest the 1% guess at a figure for bloggers-earning-over-$11K is likely a bit low by now. Advertising spend next year, all total for the entire world, is pegged at somewhere in the $450 billion range. Billion with a “b”. Out of this huge pie comes PR and marketing, and PR has adopted blogging, Google, and SEO with a growing fierceness and is shifting budget away from trad media like crazy in nearly every sector. There is a sea change underway that is replacing marketing with findability as a basic notion, and with the way that Google favors blogs, they are by far the dominant channel to the top of the search engine results page. I’m going to dig around and get some specific numbers about that. Watch this space.

    The issue with affiliate links and what I term shilling is definitely a gray area, yet, less ambiguous than the question of the motivation in the editorial surrounding that link. That’s because the existence of the link is evident. A blogger with outbound product buy links may have gotten paid to put them there, (even links that don’t lead to e-commerce sites can be surreptitiously bought and paid for) but there are technical means to determine presence or absence in an affiliate program. Google cares about this, and they do make the distinction in their indexing. I tend to follow their lead, assessing a writer’s credibility using link analysis, but the final decision about the trustworthiness of a given source is, to me, most affected by the disclosures in the content. The more literate I can be about a writer’s motivations, the better, and the more silent that writer is on that score, the less trustworthy I find them.

    It is true of course that FTC regs won’t help much, but I have to say that I do appreciate the premise that stealth marketplaces are contrary to public interests. When a marketing company puts up a mouthpiece blog that competes with a notional individual for search engine space, for “mindshare” etc, the negative “ecological” impact is real.

    And as far as Bill W. goes, hey, all I can say is during his stint in Chicago, he sure did his part for Hollywood.

  3. 3 Connor
    October 10, 2009 at 12:15 pm

    Not sure if you saw this, but The Nation put out a pretty optimistic piece about the new FTC:http://www.thenation.com/doc/20090629/pertschuk

    I liked this part:

    “What the agency needed was a cop mentality–send people to jail. Hold them up to ridicule. Word gets out in the underworld, he said. Shortly after that, FTC chair Leibowitz responded indirectly by naming David Vladeck to direct the agency’s Bureau of Consumer Protection. Vladeck served as lead litigator, and later director, of Ralph Nader’s Public Citizen litigation group for nearly thirty years, continuing his advocacy as a law professor at Georgetown University Law School.”

    • October 13, 2009 at 7:31 pm

      Nice piece, Connor. Having a Naderite in the driver’s seat beats the crap out of having some Norquistian abomination. There’s no solution to people acting like assholes, but it’s time to try a few decades of at least officially frowning on it.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s



rob [at] warmowski [dot] com

@warmowski on twitter

Rob’s Bands

Rob Warmowski entry at Chicago Punk Database
1984-89: Defoliants
1991-94: Buzzmuscle
2001-05: San Andreas Fault
2008- : Sirs
2008- : Allende

Rob at Huffington Post

October 2009

%d bloggers like this: