October 7, 2009

BlogHer, the FTC, ethics and conflicts of interest

How BlogHer deals with reviews and conflicts of interest from JD Lasica on Vimeo.

JD LasicaI‘ve been struck by the varying reactions to this week’s news that the Federal Trade Commission will now begin to regulate product endorsements not just in advertisements but also on blogs and other forms of social media. (PDF here; the regs don’t start until page 55.)

Two heavyweight bloggers and longtime free speech champions Jeff Jarvis and Dan Gillmor — bless them — have lambasted the FTC for its move into the online arena (here are Jeff‘s and Dan‘s posts, and reader comments). While I think skepticism is in order, and the specifics of the government’s involvement need to be more clearly defined, in the end I believe the FTC’s move is a healthy and welcome development for social media.

I’m coupling my thoughts on the FTC ruling with an interview (above) I did a while back with Jory Des Jardins, co-founder of BlogHer, which I’ve just gotten around to publishing today. In it, Jory describes how JCPenney approached BlogHer with the idea of having bloggers in its network of 2,500 blogs write about its new line of Linden Street furniture as part of BlogHer’s review program.

As in its past dealings with retailers, the BlogHer exec team decided on this approach: It would allow a dozen bloggers to accept $500 gift cards to purchase furniture from JCPenney, but only on the condition that the bloggers fully disclose the relationship with both Penney and BlogHer, that the bloggers be free to write reviews and produce videos telling about their experience — both positive and negative — and that the reviewers could not accept any advertising from JCPenney. Importantly, they were not paid to write product endorsements but to write reviews. BlogHer then assembled their posts into a widget, which they ran across their blog network.

JCPenney was “thrilled” with the program, and so were the bloggers. (You can judge for yourself about the quality of the reviews; this one was typical. The authenticity is what makes this valuable to marketers.) BlogHer has run several similar retailer partnerships — and in each case, Jory says, the key ingredient was disclosure.

Watch, embed or download the video on Vimeo

Lisa Stone, another co-founder of BlogHer, evoked the same themes in her keynote address to the Online News Association conference on Saturday. One reason for BlogHer’s continued growth and success, she said, was they adhere to the same standards and practices that traditional journalism institutions have built up over the decades. By 2006, BlogHer “became the schoolmarms of the Internet,” Lisa said.

Every one of the 2,500 bloggers participating in the BlogHer network must fax in a signed agreement to abide by BlogHer’s community guidelines. BlogHer blogs must not contain “editorial content that has been commissioned and paid for by a third party, (either cash or goods in barter),” the guidelines say, and so I wish the guidelines page would address how reviews fall into a different category. (For the record, I think the way BlogHer has done this is absolutely fine, though this would violate many newspapers’ policies.)

Lisa also made clear that BlogHer has no desire to impose its guidelines on the entire Internet. “We don’t believe in a universal standard for the Internet,” she said.

Fair enough. It’s not BlogHer’s job to police the Internet. Nor mine. Nor the Media Bloggers Association’s. Two years ago I chaired a committee to write the association’s Statement of Principles, which includes this:

“Clearly disclose conflicts of interest including personal relationships, financial considerations or anything else that might influence or appear to influence your independence and integrity. If you accept payments from advertisers or sponsors, clearly demarcate advertorial from editorial content.”

Jeff was against even those voluntary guidelines. But the MBA, too, made clear it was imposing those standards on its own members, not on all bloggers.

In social media, an explosive growth in deceptive practices

While it’s impossible to measure precisely, we’ve seen an explosion in deceptive uses of social media, particularly over the past six months. Payola goes out to bloggers who embed commercial links (without disclosing it). Twitterers are now paid to tweet about their sponsors — making us wonder whether a promotional tweet is genuine or merely pay-per-tweet. Direct-message come-ons by people I’ve (mistakenly) followed on Twitter now fill my Twitter in-box.

As Time wrote this week:

At a site called Sponsored Tweets, Twitter users can sign in, set the price they want companies to pay them for tweeting an ad on their behalf and wait for the offers to come in. Jocelyn French, the mother of a 2-year-old boy and 1-year-old girl, has tweeted for a parenting website, a college-information site and Kmart, among others, at $1 a pop. “I figure, hey, why not get paid at the same time?” French says. On average, companies are paying Sponsored Tweets users $29 per tweet.

Years ago, Dave Winer fretted about commercial interests polluting the free exchange of ideas in the blogosphere. Well, now those commercial interests threaten to pollute all of social media.

This is not a new debate. Lewis Perdue and I drafted a set of ethical giudelines that we suggested commercial blogs voluntarily incorporate back in the early part of this decade. And I wrote a series of articles about online ethics and news sites for the Online Journalism Review:

Ethics codes: A compact of trust (1998)

The cost of ethics: Influence peddling in the blogosphere (2005)

And so, even though government involvement in any aspect of the online arena must be carefully considered, I welcome the FTC’s ruling and hope that Silicon Valley can work with the agency to make sure it doesn’t become overzealous. (Agency officials have already said they’re unlikely to go after any individual bloggers.) The details of the FTC’s rule-making are far from perfect, and its application in other areas needs to be examined, but let’s keep focused on the central principle of transparency and truth in advertising.

I think Jeff and Dan are mistaken. This is not about free speech. It’s about deceptive practices that need to be disclosed — a decades-long role that the federal government has played in all kinds of media, from the FTC to the FDA. (And no one says you have to disclose your relationship in every Twitter tweet. Tweet your product, then tweet your relationship with the company.)

On-the-up-and-up reviewers like Steve Garfield, and the BlogHer bloggers, and my own blog and countless thousands of others have long played by the rules of fairness and disclosure. Nobody’s explained why the Decepticons should get a free pass. While Internet pioneers have hoped we would be able to self-regulate the flood of online deception, that clearly has not happened. So it’s welcome news that the Obama administration has taken a step toward weeding out the charlatans, just as it’s appropriate that earlier administrations went after spammers and this administration is pushing for network neutrality.

In all three cases, the online marketplace of ideas — which we’ll be spending an increasing amount of our time in — cannot be allowed to turn into a cesspool.

Related

FTC: FTC Publishes Final Guides Governing Endorsements, Testimonials

FTC: Guides Concerning the Use of Endorsements and Testimonials in Advertising: Notice Announcing Adoption of Revised Guides (PDF)

Time: Brought to You by Twitter

BuzzMachine: FTC regulates our speech

• Dan Gillmor at Mediactive: A Dangerous Federal Intervention in Social Media

Mediabistro: Transparency is key

ReadWriteWeb: FTC to Bloggers: Disclose Freebies or Face $11,000 Fine

EdRants: Interview with the FTC’s Richard Cleland.

Mediabistro: New IZEA Featured Blogger Julia Allison Forgets Disclosure, Keeps JobJD Lasica, founder of Socialmedia.biz, is now co-founder of the cruise discovery engine Cruiseable. See his About page, contact JD or follow him on Twitter or Google Plus.

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  • Great post, JD, and we, too, think these guidelines…if enforced consistently and fairly…are perfectly fine. We also agree that we'll have to keep an eye on that last part. And I'm sure, as a community, we all will.

    You ask above how reviews are different? Actually they're not. Even though BlogHer reviewers can give their authentic opinions, those posts are placed in a separate sponsored section…either on an entirely separate blog where BlogHer does not serve advertising, or in a labeled sponsored section of their blogs, again without our other advertising. They not only disclose in the post, but have a BlogHer Reviewer badge that goes on that site or section.

    We think that disclosure and transparency is great…and that context is just as important. Keeping any kind of sponsored content in its own space, away from the editorial well and very clearly, visually and textually identified, ensures that every single viewer/reader is opting in to that content. The goal is not just to be ethical, but to make sure your content (whether editorial or sponsored) is all signal, no noise, to your readers.

  • JD,
    I believe in disclosure and transparency, as evidenced by the disclosures page on my blog. But you're wrong about the equivalency here. Journalists are not subject to the same scrutiny, standards, and penalties as bloggers. I'm sure you, too, saw trucks back up to the loading docks with freebies for journalists. They are not regulated. Keep in mind that the vast majority of bloggers do not believe they are doing anything at all related to media or journalism. They are people talking. As I said in my post this is like sending a government goon into Denny's to listen to your conversation as you recommend a pizzeria without revealing it's staffed by your Uncle Luigi. That'll be $11k.

  • JD Lasica

    Elisa, thanks for being trailblazers in this still nascent territory.

    Jeff, I know you feel passionately about this. Most bloggers I've heard from disagree with your position, though perhaps are reluctant to say so publicly for fear of being branded somehow out of step.

    I think the FTC's rules need a thorough scrubbing and rethinking-through, but in the end their bottom line — requiring fair disclosure to prevent an infested landscape of on-the-sly marketing flackery — should be applauded.

    It doesn't matter whether they call themselves bloggers, journalists or marketers, the rules should be the same for all.

    And, yes, in principle I'd apply the same disclosure rules to print publications that accept money to cover advertisers in the editorial columns. (Because we're talking about disclosure, not preventing a single sentence from being published, I think it could withstand a court challenge.) It's shameful that you have to subscribe to CJR to find out which publications are betraying its readers.

    But at least there we have decades of tradition and often know what we're getting — journalism or marketing flackery. Not so in the social media spaces.

  • I agree with jeffjarvis on this one pretty much across the board! When do we all agree that the government and other entities like the FTC are overstepping their boundaries? What happened to the freedom of speech? And in the online arena – the freedom of opinion? We were promised many things upon the inauguration of Barrack Obama (none of which came true and probably won't) to include a more transparent government. When do we stop debating these problems and start demanding the freedoms our country was created to represent? This is a huge trespass in my opinion and I believe that it will over reach its definitions just like every other regulatory act passed into law.

  • jdlasica

    I suspect the huge influx of spam to social networking services like Twitter will eventually lead a lot of folks to come around to the conclusion that government oversight of what essentially are in many cases *online commercial transactions* is, unfortunately, a necessary evil.

  • Great post. I have come up with a solution that will not only satisfy the FTC but also it will keep Google off your back. Check it out and tell me what you think.

    FTC Demands Monetary Disclosure From Bloggers – I Have a Possible Solution