Why the FTC's Social-Media Guidelines Are Great News for Marketers

They Offer Clear Rules and Safe Harbor on Social-Media Marketing

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Andy Sernovitz
Andy Sernovitz
The FTC gave advertisers three gifts this week: Clear rules on how to work in social media; specific instructions on how to stay out of trouble; and a warning about who is running your social media campaigns.

This is great news. Now we have the clarity to properly invest in social media, without having to guess about legal risks.

There's not a single new rule in the FTC announcement. Fake endorsements have always been illegal. In traditional advertising, you wouldn't dare suggest to your boss or client that you pay off reporters or hiring actors to give fake testimonials. (You'd be fired.) So how did we think the same thing was OK just because it's social media?

Idea #1: You don't get a free pass just because it's social media. Bloggers and social media marketers aren't exempt from the same rules of honesty and fairness that everyone else has to follow. The big ideas are pretty simple:

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  • The average consumer has to understand who is paying for what.
  • Ads should look like ads, never be hidden as editorial.
  • For bloggers and consumers, free speech is still free. But if you choose to get paid, you're are responsible for what you do and say, like any other professional journalist or paid endorser. (The FTC gave us clear criteria of what sort of compensation and actions turn a blogger into a paid endorser.)
  • For marketers, you're free to earn all the blog coverage you want. But as soon as you start paying for it, you are responsible for the actions of the people you pay.

Idea #2. Three guides for safe social media outreach. The FTC gave us a simple list of things we should to do stay out of trouble:

  1. Require disclosure and truthfulness in social media outreach.
  2. Monitor the conversation and correct misstatements.
  3. Create social media policies and training programs.

They even went so far as to specifically state that if you do these things, you probably won't have legal liability, even if a rogue employee or independent blogger does something inappropriate.

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The FTC also took away the usual excuses with a clear list of warnings: Confusing or unclear disclosure doesn't count. "We can't control what bloggers say" doesn't get you off the hook -- if you compensate bloggers, they work for you and you're responsible. And, the "there's no way to monitor this" complaints were laughable to the FTC, which knows exactly how much you're going to spend on brand monitoring in social media.

Idea #3. Did your agencies protect you?Nothing in the new FTC rules should have been the least bit surprising to you. You should already have strict disclosure procedures, monitoring programs, and a social media policy in place.

Replace your social media agency today if you weren't advised long ago about these legal and ethical issues. Run from them if they put you in a campaign that crosses into the grey area.

Ad Age Webcast
Question the experts live at our 'Hot Topic: The Skinny on the FTC's Endorsements and Testimonials Guidelines' webcast on November 3.

The FTC specifically stated that if an agency or blogger-relations service breaks the rules, the marketer is completely liable.

Remember: This is the law, not a matter of opinion or debate among social media experts.

If you need specific guidance on creating a social media policy for your company, download the open-source Disclosure Best Practices Toolkit from the Social Media Business Council.

And always remember the true secret to fantastic, authentic word of mouth: Ethics come first. Honesty, service, and respect are how we earn the support and trust of our fans.

Andy Sernovitz is CEO of the Social Media Business Council and author of "Word of Mouth Marketing."
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