Can The FTC Enforce Honesty As The Best Policy?

Politics

from the Truth-Be-Sold dept

The FTC’s advertising-practices division is considering an update to ad guidelines that would hold bloggers liable for false or misleading statements, if they are compensated to promote or review a product. The FTC will vote on changes to its guidelines this summer, and the agency says it will review public comments beforehand. But is additional regulation really necessary?

While some ad agencies are worried about the “chilling effect” new regulations might have on nascent viral campaigns, other groups point out that transparency should be at the core of any social media campaign in the first place. And this is concept that should be recognized before any word-of-mouth ad campaign is even started: transparency and authenticity are the keys to a brand’s marketing reputation. If a company thinks it can fool consumers with astroturf campaigns, it should really think twice about the potential damage such dishonesty can do. In fact, ultimately, running honest marketing efforts will be much more effective for winning over consumers. So although the threat of new regulations might force some companies to reconsider their sneaky viral ads plans, the more realistic penalty for disingenuous ads is the loss of trust from valued customers.

Assuming, though, that additional gov’t regulations are actually instituted — holding bloggers liable will not necessarily solve the “problem” of paid blog reviews. Presumably, the objection to paid reviews is that such content misleads consumers and that companies behind the fabricated opinions are free to create as much false info as they want. However, if the liability for this unsavory behavior is laid at the feet of bloggers, then the blame is shifted from the company (that is more justly at fault) to a possible multitude of bloggers. An evil corporation bent on promoting misinformation would love to spread the liability around, since the legal burden would be on individual bloggers. The unintended consequence might be that even more dishonest ad campaigns are encouraged since the liability does not lie with the corporations backing them.

So before the FTC begins regulating blog posts, some thought to the ramifications will hopefully be brought up. The goal of protecting consumers may be a noble one, but the side effects of bad regulations could potentially make things worse.

Filed Under: bloggers, ftc, viral marketing