New FTC guidelines on advertising affects bloggers

The U.S. Fair Trade Commission has recently released new rules on advertising that appears in the form of endorsements and testimonials. This is one of those "the times they are a changing" moments given that these guidelines were last updated in 1980, my how the world has changed since then. There are many ways endorsements & testimonials show up which aren't so clearly ethical and the new technologies being developed offer new ways for us to communicate with each other. If the FTC were to remain limited by the old rules written before the Web was invented how would the FTC be able to regulate this new medium?

Let's think a moment about bloggers and endorsements.

Obviously some bloggers spend their blogging time writing about products and either tracking product press releases or doing reviews about products. There's nothing new about that and many magazines revolve around a similar vein of writing.

For decades there has been concern about slanted magazine reviews. That's why the original FTC guidelines came into being, right?

If the principle is "Caveat Emptor" it is up to the customer to decide whether or not to believe a given product review, right? But if payments or freebies provided by the manufacturer are not disclosed then how is the customer to know whether to take the review with a grain of salt? Requiring the reviewer to disclose stuff provided by the manufacturer makes for transparency.

For bloggers the FTC press release has this to say:

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. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.

Some examples about online payola:-

Belkin’s Online Review Payola Plot Thickens: "A Belkin employee was recently busted offering payment for positive reviews of a Belkin network router—whether or not the reviewer had even seen one"

NBC Analyst Admits Receiving Tech Payola: About a 2005 "payola scheme by NBC tech analyst Cory Greenberg surfaced Wednesday, in which he was receiving upwards of $15,000 a piece from technology companies to positively promote their products on NBC's Today Show."

Links: 

FTC to bloggers: Fess up or pay up

Links: 

FTC Publishes Final Guides Governing Endorsements, Testimonials

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FTC Plans to Monitor ‘Blogger Payola’

Links: 

http://en.wikipedia.org/wiki/Payola

First, do no evil?

Google sure wants us to believe they are moral and upstanding. One of their first questions in any decision is supposedly an evilness rating, with their corporate mantra to "do no evil". But they're a corporation, and as a corporation they're only in it for the money. Or so it seems.

Google developing eavesdropping software: The idea is that as computers more frequently have built in microphones (and cameras) that Google can use the audio from the microphone to select context-relavent advertising based on the sounds in the background. Is the person watching television while playing on the Internet? Google can listen to the television program, and through the magic of software determine what you're watching, the relavent keywords for that show, and then pop up relavent advertising on your computer screen.

Um.. so Google is going to listen, through the microphone on your computer, to the sounds wherever you are .. and they're going to try to understand what's going on around you based on those sounds? And it's all for the purpose of showing you advertsing?

So, just how long before someone like George W. Bush gets a brilliant idea that the NSA should be wiretapping personal computers through the built-in microphone?

And, what about those video cameras that are more and more often built into computers?

Just how safe from invasions of privacy are we as the devices are more complex? How do you know whether the microphone or camera built into your computer is 'on'? Maybe the microphone is on and recording and there's no visual indication? And if it's on and recording without visual indication, then where is the recording going?

For Windows users, the rampant spyware issue ought to give pause for thought ... spyware gets surreptitiously installed on your computer, in some cases simply by having your computer on the internet. Spyware can do anything, and it seems "anything" could include activating the microphone (and/or camera) built into the computer, and sending the recordings over the Internet.

Getting back to Google ... they sure make nice about this, saying their software only digests the audio and doesn't send the actual recordings back to the mothership. Instead the mothership just receives tags giving them knowledge of the sort of content, not the actual sounds. That sure makes me feel better, right?

How can we independantly determine that's really what Google's software is doing? And, there's potentially a zillion other bits of traffic that your computer does without your knowledge.