Pay Per Post is screwed, big time

December 13, 2006 — 3 Comments

We’ve heard all of the debate, the rhetoric, the hysterics, the utter nonsense, but for all the noise some in the blogosphere have made, none of it has made a difference. The Government of the United States of America though can make a difference, and it would appear that they are. Running a pay per post style business that doesn’t force bloggers to disclose paid listings (like Pay Per Post)?, guess what, you just got f*cked, big time.

The Washington Post reports that the Federal Trade Commission ruled Monday 11 December that companies engaging in word-of-mouth marketing, in which people are compensated to promote products to their peers, must disclose those relationships.

Yep, that means companies like Pay Per Post, and some of their peers (I’d note some firms do force disclosure, as they should).

It gets better:

Word-of-mouth advertising is already covered under existing FTC regulations that govern commercial endorsements. What the FTC sought to do yesterday in its staff opinion was to note that such marketing could be deceptive if consumers were more likely to trust the product’s endorser “based on their assumed independence from the marketer.”

If you’re running paid endorsements on your own blog, don’t think that this doesn’t affect you and that it only affects the company paying you:

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.

Note: violators. That’s both the company paying, and the individual deceiving. If you’re running paid for posts and not disclosing the commercial relationship, you could potentially end up liable for a fine, or even a prison sentence. Do you really want to take the risk?