Should the FTC Regulate Bloggers? Yes, But Start with the Analysts and Media …

Earlier today, news hit the wire that the Federal Trade Commision or FTC is going to require bloggers to disclose "paid reviews or freebies" or face "up to $11,000 in fines". Now, I'm sure many folks will take a Howard Stern-esque gut reaction to this. In other words, they'll argue this is just the FTC over-stepping its bounds as a regulatory body. But I'm one blogger (or analyst, writer, columnist -- pick your term) who actually thinks such regulatory policing makes complete sense. However, I'm not so sure the current ruling will impact anyone in our sector. The only blogger who writes paid posts in our sector, Jon Hansen, is very careful to fully disclose and refer to the fact that aspects of his body of work is underwritten or funded by sponsors. Other bloggers in this sector that I know -- except those affiliated with companies, but even many of those, such as the ones on Supply Excellence -- remain highly independent and some, like Michael Lamoureux, even disclose specific existing and past client relationships (as I do on Spend Matters). Try getting analyst firms and old media publications to do the same.

For this reason, I think the FTC ruling will have limited or no impact on our sector. However, it's worth understanding it in detail. The above-linked CNET report quotes from the rules and suggests: "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."

Personally, I would hope this ruling does away with -- or greatly reduces -- paid-product reviews and endorsements that hide behind a cloak of objectivity in the B2C world. But in our B2B sector, I'd argue that the FTC should first look at the traditional media and analyst firms that I know would be in violation of the spirit of this ruling. Heck, I wish I could serve as an expert witness in this area (I say this as having been someone who has approved checks for both groups over the years knowing how written coverage and reporting has been at worst, directly tied to payments, and at best, indirectly). Now, this is not a firm rule -- and some firms and pubs are better than others -- but I'd argue that pay-to-play without full disclosure is more a fact of life in the legacy procurement and supply chain media/analyst world than it is in the new and social media one. In fact, I'd say at this point that leading bloggers and smaller firms throughout the enterprise applications, consulting and outsourcing markets are now viewed as at least as objective -- if not more so -- than incumbent sources.

Jason Busch

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