December 17th, 2006

Let’s Try This Again: If It’s Not CRYSTAL CLEAR That Something Is An Ad, It’s DECEPTION

by

PayPerPost finally caved under pressure from the FTC and every blogger with an ounce of ethics — they now require “some” form of disclosure, which can include a “site” disclosure, i.e. you can bury a link to your “disclosure” in your sidebar. I was a bit dismayed to see that some of those who have been critical of PayPerPost also seem to have caved a bit (with all due respect) in responding to this latest misdirection:

Mike Arrington: Still, it is a big move in the right direction.
Scoble: Oh, well, PayPerPost just gave a nice listening gesture and that’s why they are getting the tip of the hat from me and Mike.
Mathew Ingram: As Mike notes, it isn’t a perfect solution, since bloggers can choose to have a site-wide disclosure policy rather than disclosing which specific posts are paid for, but it is a whole lot better than nothing.

While I appreciate the impulse to credit apparent good intentions, deceptive advertising is like pregnancy — it’s not a matter of degrees. If I’m reading something and I can’t tell it was paid for because the disclosure is buried on another page — THAT’S STILL DECEPTION! This may be a “step in the right direction,” but the reality is in many cases it WON’T be better than nothing. The litmus test is NOT whether you’ve posted a disclosure policy — the test is whether someone reading a paid blog post knows beyond any doubt that the post was paid. Sorry, but I just don’t see any shades of gray here.

All advertising walks a fine line — much of what we consider acceptable advertising practices do at the end of the day deceive some people. Many ads are recognizable as ads because we’re accustomed to the formats (e.g. 30 second TV spot, full-page magazine ad), not because the disclosure is clear.

Even Google, which worships at the feet of the user experience, likely crossed the deception line for some users when it change its advertising format from this:

Old Google Ads

To this:

New Google Ads

(Via Matt Cutts)

What jumped out at me from PayPerPost’s press release was this shot across the bow of the affiliate marketers:

As part of this announcement, we invite a competing and even larger part of the WOM marketing industry, affiliate marketers, to join PayPerPost in mandating full disclosure. Mary Engle, FTC director of advertising practices, recently stated “the FTC examines a number of criteria in deciding whether to bring a case against a marketer but usually looks more closely at actions that lead consumers to make purchase decisions. Some word-of-mouth marketing is focused on getting consumers to visit websites rather than to make immediate purchases.” Given that affiliate programs, regardless of FTC disclosure adherence, specifically reward bloggers for driving immediate purchases, affiliate marketers are encouraged to mandate disclosure, or embrace WOM marketplaces like PayPerPost that deliver the highest online marketing ROI with less risk of future FTC scrutiny.

Although PayPerPost has been the whipping boy for this issue, you can be sure that with all of the hopes and dreams of the media/technology industry pinned on advertising, it’s only going to get bigger.

Comments (18 Responses so far)

  1. [IMG] Scott Karp / Publishing 2.0: Let’s Try This Again: If It’s Not CRYSTAL CLEAR That Something …

  2. Let’s Try This Again: If It’s Not CRYSTAL CLEAR That Something Is An Ad, It’s DECEPTION

  3. I”m no fan of PayPerPost, but I was shocked at the refusal of prominent affiliate marketing folks to even entertain the fact (not possibility) that existing endorsement laws apply to some forms of affiliate marketing. I’m not sure, however, that PayPerPost is highlighting that issue out of genuine concern for consumer protection.

  4. Brian, I think it’s a pretty safe bet that PayPerPost is highlighting the issue with affiliate marketing for less than altruistic reasons.

  5. [...] Now, the company has decided to change its approach, and — according to a press release Mike Arrington has reproduced on TechCrunch — will require bloggers who take part in the program to disclose that they are being compensated. As Mike notes, it isn’t a perfect solution, since bloggers can choose to have a site-wide disclosure policy rather than disclosing which specific posts are paid for, but it is a whole lot better than nothing (Scott Karp doesn’t think it goes far enough). [...]

  6. I’d also be willing to bet that a site wide disclosure isn’t going to legally cut it for PayPerPost bloggers. People love to assume that law is all about technicalities, but they are confusing procedural rules with substantive law. The latter is much more about common sense than people might think.

    I think the FTC will use a similar test to the one you’ve outlined above, if it ever comes to that (and that remains to be seen). Given the small amounts of money that these bloggers are willing to accept for these posts, it would be extremely sad to see one of them become the FTC poster child for improper disclosure practices.

  7. I’ve been thinking that the next time I want to write about some new gadget I like, I’m not to explicitly state “this is NOT a pay-for-post,” just to avoid any confusion or speculation … just to maintain the credibility of my independent recommendation.

  8. Nobody has been more vocal or critical than I have of PPP. I’m with everyone else, this is a good step, but I call for more.

    Blame Me, I Saved PPP, Where’s My Check?

    I call a truce, almost. Here’s the deal, you (PPP) need to require each blogger to put disclosure either at the beginning or end of their blog post, not just put the disclosure badge anywhere on the page. Only then will it be truly noticed and work in the reader’s favor.

    And you, Copyblogger, I will follow you to the ends of the Internets with that ftc affiliate marketing nonsense. :) Let it die, only you and a handful of others think it has anything to do with affiliate marketing. The PPP guys are desparate to point the arrow away from the target they put on their back through their own PR success. Don’t believe the hype!

  9. >>only you and a handful of others think it has anything to do with affiliate marketing.

    Yeah, and we’re all lawyers. :)

  10. Hold on, you took my Google ads image and trimmed out the border that separates the search results from the ads.

    I agree with you about PPP though. From Google’s perspective, paid posts should include machine-readable disclosure in the form of nofollow attributes on paid hyperlinks.

  11. [...] The thing that gets me; as pointed out by Scott Karp, is that a previous critical stance by many of the big boys of the b’sphere appears to have softened. Scott goes on to point out; quite rightly, hiding a disclosure notice on some page deep in a blog is not being up front with your readers While I appreciate the impulse to credit apparent good intentions, deceptive advertising is like pregnancy — it’s not a matter of degrees. If I’m reading something and I can’t tell it was paid for because the disclosure is buried on another page — THAT’S STILL DECEPTION! This may be a “step in the right direction,” but the reality is in many cases it WON’T be better than nothing. The litmus test is NOT whether you’ve posted a disclosure policy — the test is whether someone reading a paid blog post knows beyond any doubt that the post was paid. Sorry, but I just don’t see any shades of gray here. [...]

  12. Matt, I put up your original image — while the shadding for the ads above the organic results is certainly helpful, I don’t think a lightly colored, one pixel line makes up for the loss of the shaded boxes on the right — especially since the ads are now formated to look EXACTLY the same as the organic results.

  13. [...] Unfortunately, the folks at SS|PR failed to read my earlier post where I had already commented quite NEGATIVELY on this announcement. [...]

  14. We just conducted an interview covering some of these issues with Mary Engle of the FTC at the recent WOMMA Summit 2.

    See the video here:
    http://www.cobrandit.com/blog/2006/12/mary_engle_federal_trade_commi.html

  15. [...] Scott Karp writes that if something is not crystal clear its an ad, then it is deceptive marketing.  This cuts to the point of the FTC’s announcement.  The difference between an advertisement and word of mouth marketing or paid promotion is in essence whether the consumer knows that they are being marketed to.  I think the gist of Scott’s argument, and the FTC announcement is that if you are marketing something you need to let the consumer know you are marketing to them, and without that disclosure it is deceptive. [...]

  16. Thanks for loading the original image. Besides the border, the original image makes it a little more clear that those ads are over on the right-hand side of the page.

  17. I agree, if it isn’t clear it is wrong. It is much more difficult to sell when you are perfectly clear, but once your visitors become familiar with your reputation then clear is what they demand and appreciate. Sometimes it is hard to tell the difference between fact and fiction or review and sales pitch. But to survive long term, the clarity must prevail.

  18. [...] tagline, but it’s pretty clear what’s going on. I don’t think anyone was manipulated or deceived, which I take to be the ethical [...]

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