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.
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.