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FTC to regulate social media

Discussion in 'BlackHat Lounge' started by vegasvillan, Apr 8, 2009.

  1. vegasvillan

    vegasvillan Regular Member

    Jan 15, 2009
    Likes Received:
    The FTC is revising the guidelines for the first time since 1980, in response to the new forms of advertising spawned by the internet. Social Media is a primary target of the new regulations.
    ?The guides needed to be updated to address not only the changes in technology, but also the consequences of new marketing practices,? said Richard Cleland, assistant director for the FTC?s division of advertising practices. ?Word-of-mouth marketing is not exempt from the laws of truthful advertising.?
    The main target of the new guidelines appears to be the widespread practice of viral marketing in which companies recruit non- employees to talk up products in exchange for samples or promotions.
    How does this impact YOU directly?
    It means that companies cannot pay bloggers or ?blog advocates? to provide false or ?hyped? information about products or services. You may compare this to the FTC law that prohibits paying ?actors? to provide testimonials about a product or service without including a caption text that says ?this is an actor and all testimonials are paid actors.? Most people do not know it is legal to hire dramatic testimonials in many states. Most television viewers are influenced by actors, even when they understand that a testimonial is not real.
    All of this being said it is important to recognized one thing.
    Authentic testimonials always convert better than paid ones, and they ring more ?true? on video and audio. They have more staying power as well. In the same way, ?blogger advocates? are more effective because they are speaking from their own experience.
    I suspect that the big reason this is being addressed by the FTC is because of the recent slough of PPC advertising ads appearing throughout Google?s adsense network that look EXACTLY like a real social media blog. For example, we found an ?social media imitation site? put up by an alleged ?David Brown? at govteconomicstimulus.com/about-me/david-brown/. It went down last week, as it was a scam to be sure. Even as a social media expert, it was difficult for me to tell if this ?ithemes style? social media blog was real or fraudulent.
    We will address more of these issues in the coming months, and how you can protect yourself against such fraudulent behaviors entering into the Social Media Space.