The Social

The Internet Advertising Bureau has come out against new guidelines proposed by the Federal Trade Commission that would require bloggers to disclose their affiliations with sponsors, marketers, and free giveaways. The reason? The IAB claims that the rules unfairly regulate online media more than offline.

"What concerns us the most in these revisions is that the Internet, the cheapest, most widely accessible communications medium ever invented, would have less freedom than other media," IAB president and CEO Randall Rothenberg wrote in an open letter to FTC chairman Jon Leibowitz. "These revisions are punitive to the online world and unfairly distinguish between the same speech, based on the medium in which it is delivered. The practices have long been afforded strong First Amendment protections in traditional media outlets, but the Commission is saying that the same speech deserves fewer Constitutional protections online."

He illustrated it with a personal example:

So there I was last Saturday, about to send out on my Twitter feed--which automatically updates my Facebook page and links to my personal blog--a photograph of this wonderful baked halibut dish I'd just made as a surprise for my wife. I was in the middle of typing a rave review of the recipe, which I'd pulled from my favorite cookbook, "Delicioso! The Regional Cooking of Spain" by Penelope Casas. But before I could press the 'post' button, I stopped and canceled the whole thing.

I remembered that the book was a freebie, sent to me by an editor at the Alfred A. Knopf publishing house 13 years ago. And I didn't want you guys to haul me into court and fine me for violating the rules you've just promulgated to muzzle social media.

The FTC has said that the rules, which stipulate that violations may face up to $11,000 in fines, are designed for education rather than punishment. But Rothenberg isn't buying it.

"The Guides do allow you to pursue bloggers," he insisted. "They do hold individuals more liable than larger corporations. They do explicitly say online social media have less protection than offline corporate media. They do obstruct online companies' opportunities to drive cultural conversation more than offline companies'. They do threaten with prosecution book publishers, movie producers, and other companies that supply products to individual social media conversationalists."

The bigger problem is that offline media isn't subject to the same restrictions, he explained. And, according to the letter, clamping down on one medium but not another constitutes a First Amendment violation.

The FTC has not yet responded publicly.

(Credit: Josh Lowensohn/CNET)

Prominent users of Twitter and Facebook won't be exempt from controversial new Federal Trade Commission guidelines that keep tabs on blogger freebies and giveaways, according to Richard Cleland, associate director for the FTC's advertising division. The agency absolutely plans to keep tabs on social networks as well as blogs in accordance with revised regulations that could see violators fined up to $11,000, he said.

Here's a sample scenario: a celebrity or other prominent figure with loads of friends on Facebook receives free hotel says from Hotel Chain X in exchange for running Hotel Chain X ads on his or her blog. If that person then signs up as a Facebook fan of Hotel Chain X--which, remember, could mean that the person's name can show up for his or her Facebook friends alongside Hotel Chain X display ads on the social network--he or she could be held liable by the FTC.

"It would be the same thing if you were going to pay the celebrity a thousand dollars to go register as a fan," Cleland said. "In that case, there wouldn't be any question about it."

Facebook spokesman Barry Schnitt told CNET News that the social network doesn't have anything concrete to say in reaction to the new regulations just yet. "I don't think we have anything to say other than that we've had an ongoing dialogue with the FTC and we'd love to talk to them more about what this means," Schnitt said. "I think we're already consistent with the spirit of it."

Schnitt added that some of the practices that may be encompassed by the new FTC guidelines are already banned by Facebook. "We say in our statement of Rights and Responsibilities, and people actually applauded this when we added it in a few months ago, that you will not use your personal profile for your own commercial gain such as selling your status to an advertiser." This is contained in section 4.2 of the document, he said.

As for Twitter, the FTC isn't letting you get a pass with the excuse that 140 characters--Twitter's famous text limit--is simply too short. "There are ways to abbreviate a disclosure that fit within 140 characters," Cleland said. "You may have to say a little bit of something else, but if you can't make the disclosure, you can't make the ad."

The question still remains as to exactly how the new guidelines will be enforced, given the sheer scope of online media--not to mention the millions upon millions of active Twitter and Facebook users.

"As a practical matter, we don't have the resources to look at 500,000 blogs," Cleland said. "We don't even have the resources to monitor a thousand blogs. And if somebody reports violations then we might look at individual cases, but in the bigger picture, we think that we have a reason to believe that if bloggers understand the circumstances under which a disclosure should be made, that they'll be able to make the disclosure. Right now we're trying to focus on education."

That's worth highlighting. Small-time bloggers freaking out over whether the FTC will really crack down on them may be pleased to know that the FTC at least claims its aim is to make everyone aware of what's right and wrong rather than to hunt down every Twitter user who may have been given a free toaster or something. Unless, that is, somebody rats them out--and at least one blogger is already raising concerns that angry readers may use the regulations to attempt to get back at blogs they don't like.

Industry blogger Peter Feld of Brandchannel thinks he can see another outcome. "A safe prediction for 2010: some big scandal when the first celebrity to run afoul of the new rules, by promoting a product on Twitter or a talk show, gets fined by the FTC."

This post was updated at 5:13 p.m. PT with comment from Facebook.

Independent bloggers who fail to disclose paid reviews or freebies can face up to $11,000 in fines from the Federal Trade Commission, according to revisions to the agency's "Guides Concerning the Use of Endorsements and Testimonials in Advertising" published Monday.

This marks the first time that the Guides document has been updated since 1980.

From an FTC-issued release:

"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."

The FTC also has its eye on celebrities. "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," the release explaining the revisions explained.

That means, theoretically, that if a celebrity gushes about a new car on his or her Twitter account and it turns out that the car was given away for free, the celebrity could be fined by the FTC.

Word of the FTC's crackdown on blogger endorsements first broke in June and set off a wave of chatter in communities of bloggers who are well used to receiving and keeping free products from marketers and PR agencies--most notably the thriving "mommy blogger" sector.

It's going to be hard to police--there are a lot of bloggers out there, not to mention a lot of different kinds of bloggers, and a lot of marketers. And as some media critics have pointed out, undisclosed endorsements of freebies have plagued some sectors of the magazine industry for decades now.

I can has free stuff in the mail?

(Credit: Caroline McCarthy/CNET News)

How acceptable is it for independent bloggers to accept free products and other giveaways? It's been a heated discussion of late.

Now MomDot, a community site for the ever-expanding corps of "mommy bloggers," has decided to encourage its followers to spend a week ignoring the PR and marketing industries altogether.

"MomDot is challenging bloggers to participate for one week in August in a 'PR Blackout' challenge where you do not blog any giveaways, any reviews, and zero press releases," the post on Monday announced. "In fact, we don't want you to talk to PR at all that whole week. We want to see your blog naked, raw, and back to basics. Talk about your kids, your marriage, your college, your hopes, your dreams, your house and whatever you can come up with for one week."

A week. A whole week that they can't write about PR pitches and stuff that's been sent to them for free. Quel horreur, right?

It's suggested as a solution to "bloggy burnout," or the notion that "mom bloggers are simply doing too much," but it's impossible to take a "PR Blackout" out of the context of the controversy over blogger freebies. This has all been front and center for a few weeks, once it was revealed that the Federal Trade Commission (FTC) was considering including bloggers under guidelines that ban deceptive or unfair business practices. Basically, this means that if a blogger writes about a product that was given away for free or with any added compensation, that must be disclosed. "Mommy blogs," written by and catering to a demographic that's an obvious marketer's paradise, have found themselves in the crosshairs.

I don't have kids, and even if I did I don't think I'd blog much about them out of the concern that their future sixth-grade classmates would find a way to use it as blackmail, so maybe I'm not at liberty to judge. But I think MomDot is sort of missing the point. Working with the public relations industry is core to any journalist's (and now blogger's) job, as is the use of press releases and in some cases review products. What MomDot is assuming is that "mommy bloggers" are simply rehashing press releases and posting photos of stuff they got for free, turning less into independent bloggers and more into PR mouthpieces.

That's a little bit insulting, in my opinion, to the scores of smart, funny, and critical bloggers who happen to write about their lifestyles as mothers. Many of these women are blogging as a side project while they take time off from very successful corporate careers to focus on raising their kids. I'm not all that well schooled in which mommy blogs are worth reading, but I'm willing to bet that plenty of them are willing to read a press release or play with a new product and promptly write about how stupid they think it is.

It seems like this is a case where a few bad eggs are spoiling the omelet, or however that old saying goes. The problem isn't PR, but bloggers who are working with it in a less-than-sincere way.

The FTC's proposed new rule, and MomDot's reaction to all the buzz about it, does highlight some real problems (never mind how difficult it'll be to police thousands of blogs). It can be a very questionable marketing strategy to offer bloggers free stuff simply so that they'll write about it, but with the digital age offering anyone a mouthpiece and an audience, I'm afraid it's a strategy that's here to stay. But I don't think the real problem is the giveaways themselves, although some of the reports of free Caribbean cruise vacations are worth raising a few eyebrows over. The issue is which of the recipients of everything from e-mailed press releases to movie tickets to kiddie-toy test products are really just acting as marketing outlets, and which ones aren't.

It's not restricted to moms who blog. Tech bloggers have often been accused of doing the same thing with regard to free gadgets--as when Microsoft courted bloggers with copies of Windows Vista that just happened to be loaded on souped-up Acer Ferrari laptops. I don't get a whole lot of review products here at CNET since I cover the Web and media rather than hardware, but our gadget reviewers have a policy of packaging everything back up and shipping it back once their reviews are complete.

Beyond my own industry, I see posts and Twitter tweets about trips, free gadgets, and other giveaways coming from prominent folk in social media, with the obvious intent that the company or agency behind it simply wants them to write about it and have their digital reach act as an advertising outlet, and I tend to think less of their blogging prowess when they don't seem willing to turn a critical eye to any of it.

Izea, for example, the marketing company that's become one of the most prominent faces of blogger giveaways, says it supports the FTC investigation and requires all bloggers to disclose compensation and freebies, but has also acknowledged that for at least one giveaway it avoided including bloggers who might have given the client negative press. Disclosure in these situations is obviously important. So is a general, blogosphere-wide awareness that marketers are chomping at the bit for their audiences. Some bloggers will be fine with this. Others will rightly see this as a need for some sort of community-wide guidelines to be put in place. I know there's been talk of this.

The encouragement to "write about your family, not giveaways" is admirable. But the reality is that many of these bloggers have turned anecdotes about parenting into a full-fledged business, and working with PR is part of the game. The likes of MomDot should be encouraging quality content, media savviness, and best practices, rather than a "PR blackout" that misses the point.

And--just a thought--maybe the real solution to "bloggy burnout" is taking a few days away from the keyboard and spending a little bit of extra time with your kids.

The Federal Trade Commission is planning to crack down on bloggers who review or promote products while earning freebies or payments, the Associated Press reported Sunday.

This would, for the first time, bring bloggers under FTC guidelines that ban deceptive or unfair business practices.

"New guidelines, expected to be approved late this summer with possible modifications, would clarify that the agency can go after bloggers--as well as the companies that compensate them--for any false claims or failure to disclose conflicts of interest," the article explained.

The rules could be quite strict, even extending to the practice of affiliate links--for example, a music blogger who links to a song on Amazon MP3 or iTunes that earns an affiliate commission in the process.

The practice of free products for bloggers, most of whom are not bound by ethical guidelines that journalists have historically followed, has been making headlines for some time now. Microsoft, for example, created a wave of bad press a few years ago when it gave free Acer laptops preloaded with Windows Vista to several dozen bloggers.

Some companies have sprung up around the whole notion of blogger compensation and giveaways. The AP article mentions some of the marketing companies that have made a business out of offering bloggers incentives--free trips, products, gift certificates, or outright payments--for coverage. One of them, Izea, has been generating controversy in the tech press since it started PayPerPost.

Izea says that it requires bloggers to disclose what they've gotten paid for or what they've received for free. But with the proposed FTC guidelines, if a blogger fails to disclose a freebie or payment, both Izea and the blogger could be held responsible. The FTC could also take issue with the fact that for at least one promotion, Izea has said it avoided including bloggers who would be likely to give the company negative press.

Izea CEO Ted Murphy wrote in a blog post Monday that the company supports stricter FTC regulations for bloggers.

"The companies that should be worried about these changes are those that have no standards and no way to enforce disclosure," Murphy wrote. "We have invested millions of dollars creating systems that allow us to automate transactions and verify standardized disclosure."

But some bloggers, the AP article mentioned, are concerned that the FTC's efforts could go too far, possibly generating probes into posts that were written without any compensation, and possibly leading bloggers to post with more restraint. And some believe it would be better if bloggers created their own standards based on niche and industry.

Then there's this: does the FTC realize just how many small-time bloggers are out there? Championing business ethics is a worthy goal, but, um, good luck getting much done when there are hundreds of thousands of blogs out there and new ones popping up more or less daily. Ever heard of the expression "herding cats?"

This post was updated at 11:37 a.m. PT with comment from Izea.