Common Sense Guidelines from the FTC

Posted by: in Social Media Insights & Trends on October 6, 2009

It’s important to take guidelines seriously and do the equivalent of “listening” via the reading of the document to understand what direction we are being provided.

Earlier this week, the Federal Trade Commission (FTC) introduced new guidelines related to social media, effective December 1, 2009. This is an important and positive step in clarifying the responsibilities of a company when engaging in social media. These guidelines are of interest to companies of all sizes worldwide, since they arguably reflect one of the first substantial forms of guidance from a government related to social media.

Here is what we believe you need to know.

The FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising state that companies will be held accountable if social media outreach and word of mouth campaigns do not result in truthful disclosure. It’s hard to find someone who would say they engage in “untruthful disclosure”, but take the time to read on what this means. Said a different way, the guidelines state that the post of any blogger who receives cash or in-kind payment to review a product is considered to be a sponsored advertising message, and therefore may be subject to enforcement.

The FTC specifically states that there are three things you need to do to limit your liability.

  1. Require disclosure and truthfulness in social media outreach.
  2. Monitor the conversation and correct misstatements.
  3. Create social media policies and training programs.

The key step for any company that will engage in social media is to ensure you have a state-of-the-art social media policy that includes clear rules on transparency and disclosure. In addition, it is important to have a training program in place to educate your employees on what is acceptable online. And, it is of great benefit to have an analytics and monitoring program in place so you know where conversations are occurring and what is being said about your brand.

If you don’t have time to read the guidelines, keep in mind the most important action you can take are the creation of your policy and related training.

If you would like to read a further summary of key insights from the guidelines, we recommend you read more from the Social Media Business Council.

The topic of guidelines, their importance and what they mean is a longer conversation, so Neville Hobson and myself will talk more about this topic in a podcast later this week. Stay tuned.

Bob Pearson, Chief Technology & Media Officer, WeissComm Group & Chief Evangelist, Social Media Business Council

By: Bob Pearson

Bob is the President of W2O Group, an independent network of digital communications and marketing companies. He is an author, frequent speaker and instructor for Rutgers center for management development. After the success of his book Pre-Commerce, Bob is currently working on a new book on the future of media titled Storytizing that will be available in 2014. Prior to W2O Group, Bob worked as VP of Communities and Conversations at Dell to develop the Fortune 500’s first global social media function -- an industry-leading approach to the use of social media, as highlighted in the best seller, GroundSwell. Before Dell, Bob was Head of Global Corporate Communications and Head of Global Pharma Communications at Novartis Pharmaceuticals in Basel, Switzerland, where he served on the Pharma Executive Committee. He also serves on a variety of Boards in health and technology. Highlights include serving as an original member of the P&G digital advisory board and being appointed by the Governor of Texas to serve as chair and vice chair of the emerging technology fund for the State of Texas.

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  1. A clear call to action for social media guidelines and training

    A couple of days ago, the US Federal Trade Commission (FTC) published new guidance and use of testimonials and endorsements in advertising. It’s prompted quite a bit of critical commentary and opinion by many business influencers in the US.
    While this…

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