According to a recent article on TechCrunch, under new FTC guidelines “Even Citizen Journalists Must Disclose Paid Endorsements.” This is fairly big news in the social media space and something that we don’t feel has received enough attention.
The activities of brands in social media take place over a wide spectrum. Some do nothing, some put display adverting around social content, some build community organically, some use display advertisement to drive community development, some provide tools for passionate community members to share their brand advocacy, and some actually pay or “sponsor” those they feel are influential to speak about their brand. It’s the final category the FTC is taking issue with, and we wholeheartedly agree with their stance (though we also believe it’s unnecessary).
The power of social media for brands is based on the concept of authenticity and trust. I’m more likely to listen to a friend’s product recommendation than that of a TV commentator because I trust my friend and believe they have no ulterior motive for their opinions. Brands that pay for placement in the social ecosystem without full disclosure dirty the water and diminish the value of all such recommendations.
However, we believe social media is far more resistant to such payments than traditional media. Readers hold bloggers accountable for lack of disclosure, and said bloggers rapidly loose credibility and relevance for participating in silent paid placement. Brands that pay for posts risk major reputation issues, and friend relationship are even more sensitive to sponsored advocacy than journalists – one puts one’s social capital is at risk by simply shilling for a brand, and that sort of capital is not so easily replaced with the monetary kind.
In short, while we support the FTC’s new guidelines, we also believe in the ability of social media to self-police.
