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!!!