Athletes Can Start Endorsing A Brand In Hours... But A Blogger Does It And It's A Federal Issue?

from the hmmm... dept

As the FTC still wants to stick by its questionable guidelines concerning bloggers "endorsing" products, I found it interesting that the NY Times was profiling a new online service that more easily allows brands to sign endorsement deals with star athletes. Basically, they just need to fill out a few forms, and within hours, that athlete may be the face of the local car dealership. Now, I don't see anything wrong with this, but I'm curious as to why this is somehow okay, but when a blogger fails to mention that he or she got a book for free, the FTC will consider fining them? Does anyone actually believe that the star football player shops at the local Ford dealer?

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Did The FTC's New 'Blogger' Guidelines Just Change The Way All Book/Music Reviews Must Be Conducted?

from the just-wondering dept

A bunch of folks have been sending in the fact that the FTC has (as was widely expected) approved new rules on "endorsements" or "testimonials," including a section on bloggers or "word-of-mouth marketers." The end goal here is definitely admirable, but I question whether or not this ruling really makes sense:

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.

Again, the concept is definitely admirable. There's long been a fear that companies are effectively bribing people with free stuff in order to get good reviews, and the FTC wants people to reveal that info. But... does that really make sense? It seems to me like this could just create a totally unnecessary minefield for anyone who blogs. And why is this focused on bloggers and word-of-mouth marketers? Almost all book and music reviews in the mainstream press involve the books and music being sent for free - and there's never been any question of impartiality of most of those reviews -- but why are they now left out of these rules? Is every blogger who reviews a book going to have to disclose where they got it? What about music? Many music bloggers are sent mp3s by the record labels. Do they need to reveal who sent them stuff? Does that really matter?

The real question, from my standpoint, is whether or not the FTC is really needed here. If someone is constantly blogging positively about stuff they get for free, they put their own credibility at risk, as people realize that the products aren't actually very good. It seems like the type of situation that sorts itself out. Those who are constantly pushing products for questionable reasons hurt themselves and soon no one trusts them. Does the FTC really need to be involved in that process? In the meantime, I'm suddenly glad that we don't do reviews on this site for the most part. I do occasionally mention or review books, but I guess I'll have to mention when I buy those books vs. when I'm sent them for free (it's about 50/50), which seems pretty pointless.

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Advertising: The Revolution Won't Be Through Friend Requests

from the skip-this-step dept

Yesterday Facebook announced its long-awaited advertising program. This was inevitable: if you're going to justify a valuation just shy of Iceland's GDP, you've got to eventually propose a means of generating revenue. Facebook will no doubt earn quite a bit of money at the ad game. But the initiatives disclosed yesterday are likely to be a mixed bag — and not at all as innovative as founder Mark Zuckerberg would have you to believe.

The most straightforward of the new offerings is Facebook's contextual advertising system. Drawing on the vast amounts of data provided by its users and supplying metrics and query capabilities will no doubt prove to be lucrative. Much has been made of Facebook's particularly rich user data — perhaps too much. Although that data is likely to be better structured and therefore easier to leverage, it's not obvious that Facebook will be able to target ads to its users more precisely than, say, Google does within Gmail. Still, it's hard to imagine these ads being anything less than a huge financial success.

The same can't be said for Facebook Pages, which will provide brands with profiles on Facebook. Facebook has already tried this approach with Wal-Mart, and the results were disastrous. Not only did the nominally back-to-school-oriented page fill up with complaints about the retailer's business practices, but — perhaps more tellingly — many users attacked Wal-Mart and Facebook for bringing corporate shilling to their beloved social network. MySpace's brand profiles have met with a similarly lackluster response: An Inconvenient Truth's MySpace page was something of a marketing coup, but once the novelty wore off the practice failed to produce anything of significance. Although other companies will attract less ire than Wal-Mart, it's hard to imagine users being any more keen to engage with them (except, perhaps, for already-elite brands like Apple or Nike).

The final and most interesting prong of Facebook's strategy is Beacon, a system that will allow partner sites to post users' actions back to Facebook. Having your Amazon purchases or Netflix selections displayed in your mini-feed are the sorts of applications that are being hyped. As you might imagine, Beacon carries privacy concerns, as well as worries that the move will result in a further dilution of Facebook's already annoyingly low signal:noise ratio.

But to my mind the biggest unknown is whether the new data will be considered meaningful by consumers. There's no question that endorsement of a product by a peer is the most effective form of advertising available. Beacon is built with the hope that there are many marginal cases in which users would be willing to recommend the products they're consuming, but can't be bothered to take deliberate action to do so. But does purchasing a product necessarily mean a user wants to endorse it? Or do consumers prefer to curate their public purchases, picking and choosing the brands that they want to use to define their online identity?

It's not clear what the answer is, but I think there's reason to be skeptical of any initiative that attempts to automate individual peer recommendation. After all, genuine human enthusiasm is the sole reason why such recommendations are so effective.

Tom Lee is an expert at the Insight Community. To get insight and analysis from Tom Lee and other experts on challenges your company faces, click here.

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