×

What The New FTC Blog Rules Mean For The Future of Marketing

Blogs and Twitter postings used to be the wild west of product endorsement. You never quite knew which mommy blogger was pushing a free stroller or whether a food critic had just enjoyed a luxurious night out on the house. Now the FTC's new "Guide Concerning the use of Endorsements and Testimonials in advertising" is trying to change all that.

The guidelines target pay-per-post Web sites where companies compensate bloggers with cash or products in exchange for endorsements, and looking for disclosure around blogs and social media sites companies set up for their products. Under the FTC's new rules, if a blogger doesn't disclose a tie to a marketer, he or she could end up paying as much as $11,000.

But I'd argue that the rules of the wild west of digital media would be tough to change.

The FTC has attracted the ire of many a blogger including my colleague Dennis Kneale. The long-overdue regulatory update - the commission's first since 1980 - raises some serious questions about how digital communication will be regulated and the future of digital marketing. But whether or not these rules theoretically infringe on free speech, the truth is, they'll be nearly impossible to enforce beyond the obvious charge against a blogger shilling for a company that's paying for the ads plastering his or her webpage. Unlike the days of three broadcast networks, the blogosphere and Twittersphere are effectively infinite, and thus unpolice-able.

From a purely practical standpoint not only do these laws have no teeth, but also they reveal the FTC's lack of understanding about the constant change in this industry. For one thing, thanks to tools like Google's Ad Sense technology that matches ads and content, it's easy to inadvertently blog about a sponsor brand - Google aims for that crossover to drive clicks. (The FTC started examining social media as a marketing force in 2004, but since then it's changed a million times. Consider that Twitter wasn't even a blip on most Americans' radar until this year).

The FTC is particularly concerned about marketing campaigns that appear to be "grassroots" but are actually carefully choreographed campaigns. I'd argue that most of the time the connection between brand and Tweeted endorsement are pretty decipherable. Plus, consumers are savvy about marketing and will only become increasingly smart about reading this world.

On Friday ComScore released numbers that reveal that half as many people clicked on web ads this year than in the same period in 2007. Yes, that shows that consumers can distinguish between news copy and a faux article. But also think about what it means about where marketers are forced to go to connect with consumers: to their worlds of blogs, Tweets and Facebook status updates. Advertisers have no choice but to send out their wares to relevant bloggers, especially as there are fewer traditional news outlets - just yesterday Conde Nast shuttered four magazines. I think its readers who will best monitor their content. In this age of Tivo, and when people sign up for direct marketing via Twitter from brands like Jet Blue, people know an ad when they see it-and sometimes they don't mind.

The FTC's guideline that seems most impossible is that regulating celebrities, saying they "have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads such as on talk shows or on social media." Celebrities are walking endorsements for the clothes they wear and the lattes they sip, and I'd be surprised if people didn't realize that most of that stuff is handed to them for free. Does wearing a specific brand of shoe count as an endorsement? Does a Tweet about going to a certain restaurant count as marketing if the star was given special treatment there? You can bet everything but the most egregious examples will fly under the radar.

Bottom line: Marketers need to make use of social media and blogs more than ever. I'd be surprised if these rules changed much at all, other than inspiring the occasional disclosure by a niche blogger or two. The one thing the FTC *can* count on is the fact that social media will continue to evolve at the speed of light, giving us another Twitter-like technology that will be even more sprawling, interactive, valuable to marketers and even more impossible to monitor.

Questions? Comments? MediaMoney@cnbc.com