New FTC Mandated Disclosure Rules

This past Monday, the Federal Trade Commission made some big changes to its rules on endorsements and testimonials in advertising. It’s the 1st time in 29 years that the FTC has changed them, but it’s a project they’ve been cooking up for a while now. The reason? The Social Media landscape. The agency, charged with protecting consumer interests, has decided to update its policy on endorsements because the Internet has become a compelling medium in shaping consumer decisions. “In 1980 most of all advertising was disseminated by the advertisers themselves; today a good part of that advertising is being disseminated by users,” said Richard Cleland, assistant director- division of advertising practices at the FTC.

The main takeaway is that commercial relationships need to be disclosed, although they did not say how. For bloggers who review products, this means that the days of free-flow giveaways may be over. Gadget bloggers and reviewers on Amazon and such now must disclose freebies and financial interests or face fines up to $11,000 per incident.

What does this mean for affiliates? Affiliate-created blogs, review sites and other pages have proliferated, filled with claims that drive traffic to merchants. However, when this content contains exaggerated claims or fails to disclose connections with sellers, there may be liability for deceptive advertising.

Still, the new rules are fairly ambiguous, but what’s exciting about this is that the social media marketing company I work for (full disclosure, I am not being compensated for this post ) IZEA Inc., has been advocating disclosure for years, and to quote Ted Murphy, CEO of IZEA, the company has “spent thousands of man-hours and millions of dollars building the marketplaces and tools to make social media marketing easy, effective and FTC compliant.”

Go us!!!

The Social Media Revolution

Here’s a cool video on the social media “revolution” by Erick Qualman. You can disagree on the specific stats or it’s intent, but the video is enlightening as it is entertaining:

Wall Street Journal Going Social

Since the traditional newspaper industry is running out of readers, and thus money,  The Wall Street Journal is gunning for the LinkedIn crowd and all its monetization opportunities — jobs, ads, and, a marketing pool for WSJ subscriptions — with a new social network called WSJ Connect, according to TechCrunch. Apparently, they’re even calling it “LinkedIn Killer” internally.

Instead of building it internally, like they did with its existing WSJ Community, they’ve tapped another arm of parent company News Corp. — Slingshot Lab. WSJ Connect is still in the planning/conceptual stages, but if it moves forward, it would leverage the WSJ brand as a separate property with out a need for a paid subscription to the newspaper.

Just another example of a traditional brand embracing social media as an alternate revenue source, and of course, another nail in the traditional newspaper coffin.

SEO vs. SMO

My main forte at work is SEO. Clients come to me asking for assistance in generating more organic, relevant search traffic which, hopefully, converts. But my company’s main offering is social media optimization. But does social media create conversions? What’s the difference between SEO and SMO?

I read in interesting article recently by Jeff Casmer, an IMer and consultant. Here are a few takeaways:

Humans, for the most part, have a need to feel connected, to relate and interact with others. Social media optimization thrives on that need. Social media is all about communication. Its about sharing opinions, and experiences with others via blogs, wikis, message boards (forums), and videos.

While SEO is still an effective means to gain traffic, the web is no longer two dimensional. It has evolved. It’s become increasingly interactive, taken on a three dimensional shape. One that caters to our visual and audio senses, and allows web browsers to have more control over what they see, hear, and, what is now.

Social media optimization, according to Wikipedia, is a way to optimize web sites so they would be more easily connected or interlaced with online communities and community websites, also called social media sites. Methods of SMO include adding RSS feeds, adding a DiggThis button, and incorporating third party community functionalities like Flicker photo slides and galleries or YouTube videos.

The four characteristics of Social Media Optimization are:

Participation- Consumers are not afraid to participate in communities by generating content and engaging in conversations about topics that interest them. Web masters who know this are constantly encouraging user participation on their own sites and blogs.

Conversation- Consumers today do not want to be marketed to. Blatant advertisements are not as effective as they used to be. Instead, consumers wish to be communicated with through conversation that is being stirred up on blogs, wikis and forums. Consumers now have methods to express their thoughts, recommendations and complaints and they are doing so. Webmasters can now communicate with their target audience in real time, and can take these concerns, recommendations to better serve their audience.

Openess- To build trust with their target audience in order facilitate conversation, webmasters must first be open with them. They need to let them know who they are right off the bat. Pretending to be someone your not is the surest way to lose trust. And because any good business is first built on trust its crucial to be open and honest with your market.

Community- Social media conversation is not pulled out of thin air. Every form of social media is based on the fact that we all want to belong to something; they all have a community component to them. Social media sites are micro-communities that allow people with similar interest to share insight, advice, and recommendations about products and services. Before a webmaster can begin to monetize they must first become an accepted member of the community. This is why the first two characteristics are so important.

Many web sites are still static, meaning they are rarely updated and are used as a storefront. Setting up a blog or adding unique, interactive pieces to sites like Digg is a great way to increase linkage to your website. Site owners can encourage visitor participation by facilitating the conversation that is happening virtually everywhere. Consumers are already talking about products and services and buying them; brands need to help them get their attention on theirs. By not joining in, brands are silencing themselves. And that is pretty un-social…

It’s All Relative

by Pat LaPointe

Brilliant Web strategy? Check.

Sophisticated analytics package? Check.

Compelling business case? Check.

Closing that one big hole that could torpedo your career? Uhhhhhhh……. Most new marketing initiatives fail to achieve anything close to their business-case potential. Why? Unilateral analysis, or looking at the world only through your own company’s eyes, as if there was no competition.

It sounds stupid, I know, yet most of us perform our analysis of the expected payback on marketing investments without even imagining how competitors might respond and what that response would likely do to our forecast results. Obviously, if we do something that gets traction in the market, they will respond to prevent a loss of share in volume or margin. But how do you factor that into a business case?

Scenario planning helps. Always “flex” your business case under at least three possible scenarios: A) competitors don’t react; B) competitors react, but not immediately; C) competitors react immediately. Then work with a group of informed people from your sales, marketing, and finance groups to assess the probability of each of the three possibilities, and weight your business case outcomes accordingly.

If you want to be even more thorough, try adding other dimensions of “magnitude” of competitive response (low/proportionate/high) and “effectiveness” of the response (low/parity/high) relative to your own efforts. You then evaluate eight to 12 possible scenarios and see more clearly the exact circumstances under which your proposed program or initiative has the best and worst probable paybacks. Then if you decide to proceed, you can set in place listening posts to get early warnings of your competitor’s reactions and hopefully stay one step ahead.

In the meantime, your CFO will be highly impressed with your comprehensive business case acumen. Check.

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