When I saw this come across my desk, I thought right away that it was relevant to this site.  However, I needed a much brighter mind than mine to break it down for me.  So I enlisted the help of the brightest sports blogger-lawyer I know, Texans Chick Steph Stradley.  Here’s Steph’s take…

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You might be someone that runs a blog as a hobby or a job.  Advertisers and the Federal Trade Commission (FTC) may see you as an “online influencer.”  The following isn’t legal advice but are things to think about for advertisers and bloggers when they work together.

The FTC is concerned about truth-in-advertising, and has extended rules for bloggers to make ethical disclosures revealing material relationships between themselves and advertisers, sponsors and businesses.  If a blogger was doing an endorsement or a testimonial, for example, they need to reveal the nature of their relationship with a brand to their readers so nobody gets misled.

By their words and in their recent actions, the FTC is mostly targeting advertisers in enforcing these rules and not bloggers, who may or may not be aware of the rules.

In a recent action [pdf file] against “Legacy Learning Systems,” a guitar instructional company, the FTC claimed the company recruited “Review Ad” affiliates who drove traffic to the company in exchange for commissions.  Often the traffic was driven by positive blog posts and reviews that encouraged readers to buy the program.

The FTC said it wasn’t sufficient that the company had in its contracts with bloggers to abide by FTC rules.  The FTC claimed the company, “failed to implement a reasonable monitoring program” to ensure affiliates “clearly and prominently disclosed their relationship.”  The FTC cited situations where writers clearly misled readers, not revealing that the writers profited from the endorsement.

Things For Brands To Think About:

1. Make It Easy on Bloggers.  If you have a contract with a blogger, make it clear and reasonable as it relates to FTC disclosures.

Clear in explaining the FTC rules and guidelines on how to blog and use social media in a way that demonstrates the relationship between brand and blogger. Give examples of appropriate disclosures that make sense for the blog medium and social media. You have a legal staff, the blogger likely doesn’t.  You aren’t acting as the blogger’s lawyer, but giving some guidance is a smart thing to do. Reasonable in not over-lawyering the contract. Make it appropriate for the relationship-if there is little chance of misleading the public, no sense having a contract that is stupidly onerous.  In addition, over-lawyered provisions likely will alienate the writer who is probably not getting much of a benefit from the relationship.

2. Brand Monitoring, You need to have a content monitoring program for the materials produced by bloggers.  Means you likely need to document that program as well, probably more stringently if the blogger is likely to profit from deceiving the public. In other words, if the lack of disclosure of the relationship between the blogger and brand would likely affirmatively mislead readers, the FTC may pay more attention.  The reason why the FTC came down hard on Legacy Learning is that many of the affiliates suggested their reviews were independent when they weren’t—what looked to be a bold-face lie that profited both the company and bloggers.

Though this sounds like a pain, it is likely cheaper than a big fine, hiring lawyers to deal with FTC complaint, and complying with a consent order that tells you how to run your affiliate program.  The Legacy Learning Consent Order [pdf file] is an example of what a poor result can be.

3. Disclosures Shouldn’t Deter Relationships.  Blogger-brand relationships can make good business sense. Just don’t encourage lies or purposely ignore lies. That makes sense whether the FTC tells you that or not.

Things for Bloggers to Think About:

1. Don’t Rely on Brands to Tell You What to Do.  I’m sure you wouldn’t want to mislead your readers.  So take a look at the guidelines and follow them, whether a company contractually requires you to do so or not.  Just as some bloggers may not know the rules, some companies may not either. These rules can apply to social media as well, so yes, you need to disclose relationships within 140 characters of Twitter too. #paid ad

2. Don’t Work With Brands You Wouldn’t Want to Disclose. The best brand/blogger matchups are those that make sense for both the company and the writer.  If you don’t feel comfortable revealing the relationship, then maybe it is a bad idea to do the promotion. If you don’t feel good endorsing the brand or have questions about what they are telling you about the product, then don’t say those things.

3. Don’t Lie, Mislead. The FTC has better things to do than to mess with people who didn’t benefit much from a brand relationship.  That being said, don’t be a tempting target by profiting from a lie.

[Via Amy Mudge and Deborah Birnbaum at the Arnold & Porter LLP Consumer Advertising Blog which has much more detailed information on this subject. I do NOT have a relationship with this law firm, nor am I a paid endorser.]