FTC Wants Disclosure For Word-of-Mouth, Word-of-Mouse Marketing

Fresh from the Washington Post:

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.

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.

This announcement comes just a day after Sony was discovered creating a fake site, complete with fake comments, and shortly after Wal-marting Across America hit the news.

It should come as no surprise that the FTC wants disclosure. The ‘paid endorsement’ disclaimer is common in television ads. What remains to be seen is how disclosure will be regulated on the Web, and what kind of impact this will have on business models likePayPerPost and affiliate marketing.


  1. Very interesting… I never even came accross that one yet. Then again… I suppose I should read the paper more!

    Konrad Braun
    http://www.powerhits.ca.tt




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