By Flexo

The Federal Trade Commission has released an official opinion about word-of-mouth marketing, those endeavors where people endorse products or services and are paid to do so by the company. The FTC believes that these practices are deceptive and any affiliate relationship should be disclosed.

As of right now, this is an opinion and not the law. I do think this is the best practice. Outfits like PayPerPost don’t always require that the advertiser distinguish between real editorial and paid content. I think these types of advertising are damaging for bloggers who are trying to build a trustful readership; but, as we all know, many bloggers would rather collect as much coin as possible regardless of whether doing so entails slightly misleading the reader.

The Washington Post says:

The FTC said it would investigate cases where there is a relationship between the endorser of a product and the seller that is not disclosed and could affect the endorsement. The FTC staff said it would go after violators on a case-by-case basis. Consequences could include a cease-and-desist order, fines and civil penalties ranging from thousands of dollars to millions of dollars. Engle said the agency had not brought any cases against word-of-mouth marketers.

The FTC obviously isn’t going to go after thousands of bloggers and small-time website entrepreneurs. They might go after some of the big fish, if someone — say, a competitor — lodges a complaint.

Interestingly, Advertising Age seems to take a different point of view. Since the FTC’s opinion was less harsh than what the group that raised the issue to the organization was hoping for, AdAge feels this is the step in the right direction for the advertising industry:

The ruling could lead to increased spending in an area that’s already growing in popularity with marketers.

On Consumerism Commentary, I try to disclose whenever I use an affiliate link with “[aff]” after the link. I haven’t always been in the habit of doing this, but I will do so more often. I don’t participate in any programs like PayPerPost or ReviewMe, but I have participated in campaigns with the rest of the MoneyBlogNetwork which include traditional advertising as well as an editorial about a product or service.