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You Should Always Disclose Financial Compensation In Exchange For Online Endorsements #TBT

You Should Always Disclose Financial Compensation In Exchange For Online Endorsements TBT  daily-golden-nugget-1279-2
The other day while having a rather long lunch date with my friend and industry colleague, Peggy Jo Donahue, we touched on the topic of disclosure for paid endorsements and how they should be handled online. It is an important topic that I realized I have not written about in too much detail other than to briefly mention it in this ancient Nugget from October 2010.

So for today's ThrowbackThursday, I'm going back to that brief topic of FTC guidelines for disclosure of paid endorsements and testimonials.

Blogging is so easy to do, and information is so prevalent online that the FTC wants to make sure that consumers are properly aware when brands are paying for endorsements rather than providing an honest opinion.

Celebrity endorsements happen all the time and I'm always wondering if celebrities actually use the products they talk about in TV commercials. Although you might not consider yourself a celebrity, everything you publish online has the chance to influence the purchasing decision of another person.

The FTC does not want your opinion to influence someone else without disclosing if you were compensated for your opinion.

It's important to realize that we are all celebrities in our own spheres of influence. Even if you only have 120 Facebook friends, 30 Twitter followers, 50 friends on Instagram, and 10 circled friends on Google+, that's still 210 people who you might be able to influence with your opinion.

If I tell you that "Ford is a horrible car company" it might be because I've had some bad experiences with their cars. It's not likely that a comment like that would be endorsed, but on the other hand, if I said "GMC is a great car company, much better than Ford," there's a chance that GMC might be paying me to say that.

I'd have to mention it somewhere in my blog post that I was paid by GMC. I wasn't.

Here's a more concrete example... I write about jewelry photography a lot. Since the spring of 2013, I've been raving about the Photocubics Flashbox and how much better it is than any other photography system I've ever tried. My reviews of the product are always over the top because I'm quite passionate about it; so much so, that someone might think my enthusiasm is motivated by money, but that's not the case.

Every time I mention PhotoCubics, I'm also careful to indicate that I do not get compensated to mention their name nor do I accept commissions from them. Once upon a time, I was offered a commission agreement, but I turned it down. Providing my readers with legitimate information based on my experience is more important to me than the small commission I might make a few times per year.

As a blogger, I've been approached through Twitter several times by people who want me to write about their product. These offers are usually for new SEO services or tools. In fact, just this week someone tweeted me with an invite to review their marketing scheme. I'm not a fan of packaged marketing schemes so I replied quite unfavorably to their offer. When you read my future Nugget about smarmy marketing schemes, you'll know why I wrote it.

By the way, I find it interesting that I only receive solicitations for paid endorsements through Twitter direct messages; it's never through email or another social network.

It doesn't matter if you publish your writing in a small blog or in a magazine, you must disclose if the topic you write about is somehow financially linked to you. Personally, I like to always state that I'm not getting paid for my opinions just to make sure there's no doubt.

On a related topic, the FTC also requires that you disclose any compensation related to testimonials. You should not offer gifts or discounts of any kind in exchange for a customer testimonial, and when you do, that fact should be indicated in the testimonial.

In other words, you can't offer customers a 10% discount on their next purchase in exchange for a Yelp or Google review. You can't offer them a gift card to your store as an incentive for them to go online and leave a future review.

You are allowed to ask customers for their honest review after purchasing your goods and services, but you can't offer them anything in exchange. If they ask for something in return, you simply tell them that you are not allowed to offer compensation for their online reviews.

The bottom line of today's Nugget is that you should not offer or take compensation when you mention business brands online, at least not without admitting that you were paid in some way. Common ways to say this include phrases like "full disclosure: I was compensated for this post," or "full disclosure: I was hired to write this editorial," or even "full disclosure: I work for the parent company or xyz product."

Some people also like to make sure their past compensations are not incorrectly associated with their current writings. As an example, I recently read a review of the Disney MagicBand where the guy said "Disclosure: I previously worked for Disney for 10 years but this is a non-compensated opinion blog."

PS: If you happen to be a friend of mine or Peggy Jo on Facebook, you can see the details of our lunch here.

AT: 06/18/2015 09:51:37 AM   LINK TO THIS GOLD NUGGET
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