The next time an agent at a real estate trade show gives you their opinion and glowing recommendation for a great new product or service you MUST buy, ask if they’re being paid to give you that “opinion”. Guerilla marketers, aka stealth, ninja, buzz and WOM (word of mouth) pay consumers to endorse products and services to other consumers. As it stands now, these consumer promoters are not required by law to disclose that they are being paid. That may change. The FTC will investigate, on a case by case basis, whether the failure to disclose is deceptive advertising in violation of Section 5 of the Federal Trade Commission Act. [pdf FTC letter staff opinion here]
The word (Copyblogger) in Blogland (Andy Beard) and elsewhere (Washington Post) is that Pay-Per-Post bloggers and other online affiliate marketers may have to disclose they are being paid for their endorsements. WOMMA, the Word of Mouth Marketing Association, read the staff opinion letter as applying to stealth or ninja marketing, which they also condemn, not the friendly, non-deceptive buzz or word of mouth marketing that is fair play. Another hairball for the guardians of the consumer to untangle. Professor Walter Carl, blogging from the WOMMA Summit in Washington D.C. last week, has an excellent summary of the FTC position here.
So, if you’re using paid testimonials to promote your product or service, the FTC may be watching you. Personally, I follow the old adage: Don’t believe everything you read and only half of what you see.
Related Post:
Seed Marketing: The Silent Invasion.
Video of M. Engles of the FTC on staff opinion letter here.
