FTC to Investigate Viral Marketing Practices

[mandy]

The Federal Trade Commission yesterday said that companies engaging in word-of-mouth marketing, in which people are compensated to promote products to their peers, must disclose those relationships.

In a staff opinion issued yesterday, the consumer protection agency weighed in for the first time on the practice. Though no accurate figures exist on how much money advertisers spend on such marketing, it is quickly becoming a preferred method for reaching consumers who are skeptical of other forms of advertising.

Word-of-mouth marketing can take any form of peer-to-peer communication, such as a post on a Web blog, a MySpace.com page for a movie character, or the comments of a stranger on a bus...

full article: http://www.washingtonpost.com/wp-dyn/con...technology

[amy]

companies engaging in word-of-mouth marketing, in which people are compensated to promote products to their peers, must disclose those relationships.

I guess consumers will have to settle for the FTC's solution since passing a law requiring people to think for themselves rather than blindly following the advice of others is out of the question.

[BellisimaJ.]

I guess consumers will have to settle for the FTC's solution since passing a law requiring people to think for themselves rather than blindly following the advice of others is out of the question.

heeplove: heeplove: heeplove:

[mandy]

A related article:

The FTC's recent staff opinion might cast the legality of paid blogging programs in the U.S. in a questionable light. Underscore Marketing's president discusses what this opinion means for marketers.

Over the past few months, several companies have entered into the business of making it easy for marketers to incentivize bloggers to write about their products and services. The most popular of these companies is PayPerPost, but others have also entered the space, including LoudLaunch (which hasn't yet formally launched) and ReviewMe...

If you're a marketer paying people to write favorable blog posts about your company or its products, now might be the time to start sweating bullets...

full article: http://imediaconnection.com/content/12967.asp