business news in context, analysis with attitude

The US Federal Trade Commission (FTC) yesterday published new guidelines covering the relationship between bloggers and advertisers/sponsors that may be providing them with product and/or compensation in exchange for endorsements. According to the new rules – the first changes in these regulations since 1980 – bloggers must disclose the relationship in a way that is “clear and conspicuous,” and risk an $11,000 fine per violation.

According to the FTC announcement, “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 said that it is more likely to go after advertisers than bloggers, except in cases of egregious violations.
KC's View:
Bloggers generally are pretty good at demanding transparency from the rest of the world…so it seems absolutely appropriate that they be required to disclose what their financial relationships are when those relationships result in the endorsement of various products.

For the record…I am happy to admit that the companies represented in tile ads and DrumBeats here on MNB are paid sponsors of the site. In fact, I’m thrilled to say so…because their support means that they believe in MNB’s approach to information and commentary, and that they think MNB is a great way to reach a highly engaged user base. (That would be you.)

The great news for me is that pretty much every sponsor I’ve ever had on MNB is the kind of company I take pleasure in endorsing.

So check out my sponsors. Try their products and services. And for my sake, be transparent about the fact that you saw their ads on MNB.