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Thursday, 5 January 2012

Why Non-Disclosed Sponsored Posts Are a Bad Idea - DailyBlogTips

Why Non-Disclosed Sponsored Posts Are a Bad Idea

Posted: 04 Jan 2012 08:52 PM PST

Alan Freed, the DJ who popularized the term rock n' roll died broke; the immortal Dick Clark was hauled before a federal committee; and the entire music industry was shaken to the core by the payola scandals of the early Sixties. The then-common practice of recording companies paying popular DJs to spin specific cuts was found to be in violation of the US Federal Communications Act sections 317 and 507 which requires full disclosure of pay for play.

The more things change the more they stay the same, as in today's social media sphere bloggers are facing the same allegations of accepting under the table cash and gifts in exchange for favorable mentions of particular companies in their posts: A stealth practice which not only violates federal regulations, but also corrupts the essential relationship of trust and confidence legitimate bloggers try so hard to establish with their readership.

Hyundai Payday for bloggers

Hyundai Motor America was investigated by the Federal Trade Commission’s (FTC) Division of Advertising Practices to determine whether its campaign to motivate bloggers to write about its Super Bowl XLV commercials violated The FTC Act.
Due to the fact that the basic tenet of current corporate governance seems to be "establish deniability," Hyundai was able to duck the federal bullet by claiming that they were not aware in advance that the "unnamed outside social media company" was providing gift certificates to bloggers as an incentive to write about the television commercials, in a modern version of the payola scandals of half a century ago.

Under the FTC regulations, companies are responsible for the actions of the advertising and media agencies they work for, but the FTC let Hyundai off the hook apparently believing the auto manufacturer's claims of ignorance and incompetence.

Translating FTCese into blogger reference

The language in the FTC's Revised Endorsement Guides refers to "ads" but it can readily be correlated to blogger terms:

Blog descriptions of products and services must reflect the truth and not attempt to mislead.
If the blogger does not believe that the results of their experience will be the same as those which a reader can expect, the blog must disclose the results which the consumer will experience.
Any value relationship between the blogger and the marketer of the product or service should be disclosed, including: provision of cash or gifts; "review products" which do not need to be returned; and stock holding positions in the company or any related one.

Misshapen blob of porous legislation

The FTC Guides are a misshapen blob of embarrassingly porous legislation which not only feature more loopholes than a knitted sweater, but have no teeth. Bloggers cannot be fined for violating the FTC Guides so the legal incentive to comply is non-existent. Any blogger can happily collect cash or gifts without disclosing the fact to the readership and face nothing more than a raspberry from the Feds.

The true incentive to adherence to the FTC Guides is just how far a blogger can obfuscate the transparency which is a prerequisite to establishing credence and authority with an audience.

Lie in your blog: Lose your readership

The blogger who cashes a check or accepts a free laptop in exchange for writing glowing testimonials about a Solid State Drive which actually bricked within days is not just committing a ghastly violation of journalistic ethics but also doing a vast disservice to the reader who might be tempted to go out and buy that product and lose all their data.

The reader's confidence in the blogger will be severely damaged by the factual dichotomy between review and reality and the faithful adherence to reading the blog will be terminated. This steady creep of readership loss will eventually lead the blogger to lose their audience and in turn lose their payola. No company is going to incentivize a blogger whose readership is plummeting.
The market dynamics of retribution against payola-accepting bloggers are considerably more powerful than the effectively insignificant slap on the wrist that can be expected from the Feds. No blogger should ever consider breaking their readers' trust in exchange for a few bucks or a trinket.

Hal Licino is a successful author, award-winning freelance writer, and frequent contributor to a blog hosted by Benchmark Email, an email marketing service for small businesses. He also writes a weekly column for Daily Blog Tips.

Original Post: Why Non-Disclosed Sponsored Posts Are a Bad Idea