New rules on blogger payola and relationships

The FTC requires bloggers to clearly disclose any "material connection" to an advertiser

Effective immediately: If you’re a blogger (and who isn’t these days?) and fail to disclose paid reviews, endorsements or freebies, you could face up to $11,000 in fines from the Federal Trade Commission, according to revisions to the agency's "Guides Concerning the Use of Endorsements and Testimonials in Advertising" published on October 3. The agency, which protects consumers from fraud or deceptive business practices, is now standing firm about online media practices that to date have been operating according to informal codes.

An excerpt from an FTC-issued release:

"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."

Even messages on Twitter and other social communities are included in this crackdown.

Celebrities are not immune either. "Celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media," the release explained.

I have a few initial thoughts and questions about the impact of these Guides:

Most readers will appreciate this transparency. Honest disclosures empower readers to make up their own minds about product reviews and content they consume. The problem before these Guides were released was that readers didn't know of the possibility of bias (intentional or otherwise) unless the "conflict of interest" was revealed.

For the past few months, the advertising network that I run, the Real Girls Network, has required our bloggers to include appropriate disclosure in each piece of sponsored content they publish. It’s a one-liner at the end of a post. Here's an example on SouthernPlate.com. But what we'd like to know, and which is not outlined in the FTC’s Guides, is where exactly to publish this disclosure and if there are approved options for specific language.

How can the FTC expect to effectively police the gigantic blogosphere? Realistically, will bloggers remember to keep receipts for the products they buy? Will high-profile bloggers be watched more closely than those with smaller audiences?

I imagine mommy bloggers are already freaking out. The freebies they receive on a daily basis must now be made public information. How are readers going to tolerate reading a disclosure (“My child’s diaper in this photo was sent to us by Pampers”) within every other post?