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The FTC has always regulated the advertising industry and the online sector has been on its radar for quite some time. Ethical questions surrounding word-of-mouth and seeding tactics such as blogging, commenting, and tweeting came to the forefront and advertisers got so creative using these tactics it became difficult to discern a genuine online endorsement from a marketing ploy.

To some who engage in blogging and social media, it seems heavy-handed to further regulate online marketing in the name of protecting the consumer; after all, aren’t consumers subject to the same assault of the senses when encountered with a commercial on television or billboard while driving down the freeway?

This argument makes some sense until you realize consumers are aware a commercial or billboard is an advertisement, and not the unbridled opinion of a fellow consumer, whereas marketing messages carefully disguised as a blog post, Facebook update, or tweet can be trickier to unearth.

It’s not always clear endorsements coming from a blogger, friend or peer are not genuine, and when you consider the tremendous power peer recommendations hold over consumer purchase decisions, advertisers and their conduits failing to identify endorsements as ‘paid’ in some way are using deceptive marketing tactics, a practice which has been illegal under FTC guidelines since 1938. While regulating something as nimble as online word-of-mouth is a seemingly insurmountable task, as consumer complaints about online practices mounted it was clear to the FTC something needed to be done.

To that end, today the FTC announced several revisions to its advertisers’ guide regarding endorsements by bloggers and other word-of-mouth tactics designed to keep marketers playing by the rules. Specifically, the FTC now reserves the right to fine bloggers up to 11k for failing to disclose their relationship to advertisers’ whose product or service they are promoting. Advertisers can also be held liable for bloggers or other agents failing to disclose their relationship before providing an endorsement, although the extent to which advertisers will be held accountable is unclear, and if you are an affiliate marketer, this applies to you, too, so be sure to disclose your relationship to the parent companies you work with or risk some hefty fines.

But the FTC didn’t stop there. The real kicker involves the the new FTC guidelines regarding testimonials, which are so strict they leave little room for liberal interpretation and put all the focus on cold, hard truth.

All in all this should not come as a surprise to anyone engaged in social media for marketing purposes. As we’ve said before, transparency is the way to go. Even if you’ve been following best practices, now is a good time to revisit your social media policy, and if you don’t have one, by all means, get started. With the FTC cracking down like this, there is little room for error.

How do you think this will change online marketing? Is it a big deal, or is regulated transparency par for the course?  And will the FTC’s new rules make regular folks more wary of sharing recommendations with friends? Post your thoughts below.

Note: This blog post was sponsored by the FTC.

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