Increasingly, companies are paying users of social networking sites like Facebook and Twitter to hype their brands online. The Federal Trade Commission has responded by updating its rules to make sure ads are identified as such. But author and blogger Andy Sernovitz says regulating the ads will be difficult.
Giving Up The Ghost
Artist: DJ Shadow
BOB GARFIELD: Information passed by word of mouth, studies show, is more trusted even than info from official sources and vastly more than commercial advertising. And with the advent of social media tools that exponentially increase word of mouth’s reach, no wonder that marketers have jumped in to exploit its power. Some have done so openly, others by stealth, for instance, by compensating bloggers and Twitterers for hyping brands online. Now the Federal Trade Commission is stepping in to ensure that the shout-out for an acne cleanser from a Facebook friend isn't an ad in disguise. My old pal Andy Sernovitz is author of Word of Mouth Marketing, and he joins me. Hey, Andy, welcome to OTM.
ANDY SERNOVITZ: Hey, Bob, thanks for having me.
BOB GARFIELD: Before we get to the FTC, tell me the various ways marketers try to fake word of mouth.
ANDY SERNOVITZ: There’s two big ways that people try to sneak past you: either they lie about who they are, so you think you’re reading an honest comment on a blog and it’s actually a marketer in disguise with 20 different logins, or they're paying other people to recommend something on their blogs or email or Facebook and not telling you that those people have been paid. You usually see it most from either sort of low-end, sleazy, like, health remedies and get-rich-quick schemes and that end, or you see it from entertainment companies, from folks who are out there to hype a song or a movie.
BOB GARFIELD: Some of this is called pay-per-post, right – bloggers getting X number of cents for every time they post a favorable appraisal of a new song or something?
ANDY SERNOVITZ: Yeah, you see a couple of big operations. One company’s actually called PayPerPost, and it pays you to write blog posts about stuff. There’s a new one called Magpie that pays you to send stuff out over your Twitter account under your name. And where it gets more interesting is the way things get repeated in social media. And this is what concerns me more, is that a company might pay through this pay-per-post service to get 200 people to blog something about them. And it says this was a paid placement in the blog post, so technically that’s okay. They did say it was paid for. But then those blog posts get repeated on their Facebook page and then on Twitter, and then someone else copies it, and suddenly 10 times more posts have the exact same paid review. Well, we've lost the disclosure that made it honest. I mean, really, the big idea here is this word “disclosure.” And what it says is, it’s okay to pay for coverage. That’s called advertising. But you have to say, and now a word from our sponsors.
BOB GARFIELD: Which is where the FTC comes in. Tell me about its new rules.
ANDY SERNOVITZ: Well, what's interesting is they're clarifying old rules. It has always been illegal to advertise something and not tell people you were paid for it. So there’s nothing really new here. They're clarifying it and they're making it stronger. So the FTC is openly saying, if you’re taking money to advertise something, you have to tell people you were paid for it. They are making it clear that that now applies to social media and blogs and Twitter, and they're also making it clear that it’s not just the company who’s responsible but the bloggers are responsible. If they're getting paid, they're no longer independent people with free speech rights; they are media who are taking advertising, and they better reveal that they're being paid for the advertising.
BOB GARFIELD: So let's talk about Twitter, for a moment. Does anyone pay attention to a tweet that is clearly, really an ad?
ANDY SERNOVITZ: We're about to find out. If the first three letters were “A-D-:” as in “ad” and you could write on the side of your Twitter page, you know, I take advertising, look for the words “A-D-:” and that if that’s good enough, or the followers of a particular Twitterer - the Huffington Post might decide to have every other tweet be an ad, and you may say it’s worth it because they've got good content. But if Joe Schmo starts putting everything out as an ad, you may say, I don't care what this guy has to say and I don't want to get advertising. And that’s what we're going to have to figure out as we get used to this new media.
BOB GARFIELD: Andy, thank you.
ANDY SERNOVITZ: Thank you.
BOB GARFIELD: Andy Sernovitz is author of Word of Mouth Marketing. He runs the Blog Council, a group for heads of social media at big companies, which, word has it is, like, the totally best blog council anywhere.