|Commercial Alert has formally requested that the FTC investigate buzz-marketing practices.
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Commercial Alert, a Portland, Ore., organization backed by Ralph Nader, said today it had written to the FTC to request an inquiry.
An FTC spokeswoman could not immediately comment on the letter, though officials told Advertising Age earlier this month that word-of-mouth advertising isn’t something that the agency is looking at.
Commercial Alert singles out Tremor, in part, because the company is said to have enlisted 250,000 teenagers in its buzz-marketing sales force. According to Tremor’s Web site, “P&G created our unit to drive research and explore the challenges and promises of word-of-mouth marketing.” The Web site also claims to deliver 200,000 influential teenagers, the “gateway to the total teen population.”
'Targeting of minors'
Commercial Alert's letter, addressed to Secretary Donald Clark, reads: “The commission should carefully examine the targeting of minors by buzz marketing, because children and teenagers tend to be more impressionable and easy to deceive. The commission should do this, at a minimum, by issuing subpoenas to executives at Procter & Gamble’s Tremor and other buzz marketers that target children and teenagers, to determine whether their endorsers are disclosing that they are paid marketers.”
The consumer group alleges numerous transgressions involving buzz marketing, including a Sony Ericsson Mobile effort that took place in 2002 and featured “fake tourists” who asked passersby to take their photos with a new camera phone in New York’s Times Square.
“We have always been transparent in communicating that Tremor is a marketing service to our teens,” a P&G spokeswoman said. “We have been upfront with them to let them know that we are part of Procter & Gamble and a word-of-mouth marketing program. ... We’re not compensating someone to endorse a product.”
She added that P&G has not had any contact from the FTC indicating an interest in establishing regulations or seeking testimony. “If we are contacted,” she said, “we’re willing to fully cooperate.”
Doug Wood, chairman of the advertising and marketing practices of law firm Reed Smith, which acts on behalf of many advertising firms, said, “You have to show that a consumer acting reasonably would be misled. ... Consumers are not as naïve as Mr. Nader’s group would like to think.”
The Word of Mouth Marketing Association was not immediately available for comment, but has a code of ethics posted at its Web site. The code states that buzz agents must define who a buzz marketer works for and must not lie about its identity. It also states that marketers must manage relationships with minors responsibly.
One hurdle for Commercial Alert is how pervasive word-of-mouth marketing has become. The industry is said to generate between $40 million and $60 million annually. Even the government has indulged in undisclosed viral marketing. The Department of Education paid columnist Armstrong Williams $240,000 to tout the Bush administration’s “No Child Left Behind” campaign in his writing and during TV appearances. Mr. Williams has since disclosed he was the recipient of government funds.
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Jack Neff contributed to this report.