Blogging in the Digital Age
As consumer-generated media such as blogs or social networking websites grow in influence, public relations and marketing professionals have increased the amount of attention given to nontraditional mediums as well as the amount of advertising dollars spent in these areas.
According to a 2013 survey released by Nielsen, “advertisers increasingly view paid social media advertising as an integrated, cross-platform tactic and run it in conjunction with other online and offline media,” as such, “65 percent of marketers increased their social media ad budgets for 2013.”
In a June article for Business 2 Community, social media marketer Jana Stambaugh acknowledges that “bloggers hope to write articles, features, and reviews for companies in exchange for free products and/or added compensation.” In her professional opinion, when a person starts a blog, they start a business. Stambaugh suggests that, “When you start a blog, you’re asking people to read what you think, believe what you say, take you seriously, and follow your advice.”
Laura McWhinnie, a digital creative consultant and blogger, argues, “If you’re working with brands under the table, it can completely undermine the credibility and reputation you’ve been trying to build” and suggests that bloggers “disclose everything” in an effort to maintain integrity and avoid complaints from consumers who “feel duped.”
The U.S. Federal Trade Commission (FTC) is charged with ensuring “a level playing field in the competitive arena by preventing ‘deceptive acts and practices'” by enacting regulatory guidelines and standard to ensure that consumers are presented with “truthful, non-deceptive claims.”
The influence of consumer-generated media and the affects they can have on the business-consumer relationship presented a challenge to the FTC’s desire to prevent false advertising or misleading comments, so the Commission adopted revised Guides Concerning the Use of Endorsements and Testimonials in Advertising under the authority of 15 U.S.C. §45 in October of 2009.
While some practitioners question whether or not these new regulations will impede upon First Amendment rights to free speech, others welcome the disclosure regulations and call them a guideline for “trust and transparency” for consumer-generated media.
The new FTC Guides for blogger endorsements heavily focus on the use of nontraditional media to share advertising messages and commercial speech. According to the test presented in Kasky v. Nike, Inc., “commercial speech” is speech where the speaker is engaged in commerce, the intended audience consists of actual and potential purchasers, and the messages shared are intended to influence buying decisions. As such, the Commission argues that a blogger endorsement is a form of “sponsored advertising message” that is not protected by the Constitution.
According to the Federal Register, “The Guides have always defined ‘endorsements’ by focusing on the message consumers take from the speech at issue” and the focus on consumer takeaway “is completely consistent with the approach the Commission uses to determine whether a practice is deceptive, and thus, in violation of the FTC Policy Statement on Deception of 1984.”
The report states that the Commission does not believe that all uses of consumer-generated media should be deemed “endorsements” as defined by the Guides. To determine the purpose of the message, the FTC suggests that the relationship between the advertiser and the speaker be analyzed and suggests two fundamental questions are utilized to test statements made via new media:
- Is the speaker acting solely independently, in which case there is no endorsement; or,
- Is the speaker acting on behalf of the advertiser or its agent, such that the speaker’s statement is an “endorsement” that is part of an overall marketing campaign, in which case the speaker’s statement can be considered “sponsored” by the advertiser and therefore an “advertising message.”
This test (when combined with various other factors concerning the speaker / advertiser relationship) suggests that if the consumer purchases a product with their own money and praises it on a personal blog; they will not be deemed to be providing an endorsement. This test suggests that, if the consumer received the product for free from the advertiser and/or is “paid by the advertiser or a third party to speak on its behalf,” the speech will be covered by the Guides and disclosure of the relationship is warranted.
If one were to subject this claim to the test presented by Central Hudson Gas & Electric v. Public Service Commission, which allows the Court to determine the constitutional protections allotted a particular statement by recognizing whether or not the speech is commercially-related, he or she could determine the constitutionality of thee blog regulations.
According to the Central Hudson test, if the statement (a) supports legal activities or products, it is protected commercial speech; then, (b) the government must show that the regulation serves a substantial government purpose; (c) the manner of regulation directly supports the government’s purpose; and (d) that the regulation is narrowly tailored.
As Stambaugh suggests, bloggers commonly review activities or products which are commonly available to their readers—which the average person would assume to be legal. In this case, the government, i.e. the FTC, could argue that the regulation serves its fundamental purpose of promoting a competitive marketplace by preventing deceptive practices, such as sponsored endorsements giving the perception that they are personal opinions or beliefs.
The regulation provides a level of accountability to both the advertiser and the blogger, so it could be argued that the regulation directly supports the government’s purpose and that it’s narrowly tailored as to not affect bloggers on personal blogs writing in the interest of informing the public.
The Federal Trade Commission supports the belief that “guidance as to the types of consumer-generated content that will be considered ‘endorsements’…and the responsibilities of the parties involved, informs both advertisers and endorsers of their attendant responsibilities in ensuring that advertising is truthful and non-misleading, and reduces potential misunderstanding of their obligations under Section 5 of the FTC Act.”
This claim is supported by the Court’s ruling in RJ Reynolds Co. v. FDA. In this case, the Court supported the FDA’s “disclosure requirement” as an appropriate means of preventing consumers from being misled by a company or product.
One should note that the Commission acknowledges that “bloggers may be subject to different disclosure requirements than reviewers in traditional media” because under usual circumstances, the Commission does not consider reviews published in traditional media to be “sponsored advertising messages.” This is supported by the fact that the Commission doesn’t believe that knowing whether the “media entity publishing the review paid for the item” would “affect the weight consumers give to the reviewer’s statement” which may not be the case when considering statements made via consumer-generated media.
Bloggers who oppose the FTC’s Guides should keep in mind that speech which is economically motivated will always be considered commercial speech. By accepting payment or incentives in exchange for a review or their influence, bloggers are acknowledging the commercialism of their relationship with the advertiser or third party and the influence the relationship will have on their words.
The Kasky and Central Hudson tests both confirm that such statements can be classified as commercial speech, which is allotted less constitutional protection and is subject to government regulation. If bloggers truly wish to be taken seriously as marketers and influencers, they should accept the burdens that come with the territory. You can’t act like an advertiser and not be subject to the same Guides.