3 lessons for bloggers: Fashion, BP and the FTC

by Urs E. Gattiker on 2009/10/08 · 14 comments 14,197 views

in c corporate blogging,d business ethics,d business regulation,e marketing 101 style matters

Image - Roberto Cavalli -  model Fall 2009 for Spring 2010 lineThe public’s greater demand for transparency in financial markets also seems to resonate with designers presenting their wares in Milan during Fashion Week.

Instead of doing the talking, they were showing the goods.

Lesson 1 => In fashion terms, see-through garments are generally a message about direction, and maybe even intention, but not actual wardrobes.

The appearance of see-through does not usually move beyond the runway. However, it does confirm the truism that, no matter how much people talk about transparency, it is not always really what they want.

Bonus Tip: Unless you have the right high heels, things just don’t look right – Why women buy black high heels: the guide for everything.

BP
It has been four years since BP’s biggest refinery exploded in Texas, killing 15 people and injuring hundreds in the worst US industrial accident in more than a decade. But an OSHA audit by the US Department of Labor’s Office of Audit revealed that deaths since 2005 should have led to implementation of its “enhanced enforcement provisions”. This would have resulted in greater enforcement efforts, including enhanced follow-up inspections and more stringent settlement terms.

image - the wreckage at BP's facilitate in Texas City

Lesson 2 => better governance requires streamlining of regulatory tasks, as well as putting the right procedures into place.

BP’s Texas City refinery disaster suggests that plenty of regulation was in place, but the devil is in the details.

Bonus Tip: Fashion demonstrates that the more you tell, the less you show – BP Texas Refinery Accident Lessons Learned – John Mogford, BP Senior Group VP for Safety and Operations had a good teacher.

US Federal Trade Commission (FTC) and bloggers
As the above indicates, neither fashion houses’ clientele nor BP seem to appreciate transparency that much.

In order to make sponsorship and endorsement regarding blogs more transparent, the FTC released a guide to be adopted by December 1, 2009. What is of particular interest for bloggers are statements like:

“… postings by a blogger who is paid to speak about an advertiser’s product will be covered by the Guides, regardless of whether the blogger is paid directly by the marketer itself or by a third party on behalf of the marketer.”

    (p. 9)…

“… If [a] blogger frequently receives products from manufacturers because he or she is known to have wide readership within a particular demographic group that is the manufacturers’ target market, the blogger’s statements are likely to be deemed to be ‘endorsements’ [within the meaning of the Guides]…”

    (p.10)

“The Commission acknowledges that bloggers may be subject to different disclosure requirements than reviewers in traditional media. In general… the Commission does not consider reviews published in traditional media… to be sponsored advertising messages. Accordingly, such reviews are not ‘endorsements’ within the meaning of the Guides. Under these circumstances… knowing whether the media entity that published the review paid for the item in question would not affect the weight consumers give to the reviewer’s statements.”

    (p. 47)

Download FTC Guides – 84 pages, pdf
Enforcement starts December 1, 2009

    .

All things being equal, the above indicates that if the blogger gets product samples, tests them and/or writes a positive review (considered an endorsement), public disclosure is necessary.

Also check out:  US FTC – Nov 08 guidelines or the UK’s rules regarding fair dealings.

If we agree that such disclosure is desirable, why not also apply it to traditional media? It is often hard to believe that journalists who receive product samples and are invited to press junkets can legitimately claim independence and do not need to disclose such relationships (see also Bottomless goddy bag for journalists

Lesson 3: Regulators’ intentions to improve transparency regarding endorsement, sponsorship and getting paid to blog about a product are admirable. But in reality, this means more costly administrative work for bloggers and sponsors alike, as well as more litigation, even as things remain opaque.

Bonus Tip: Online and offline content is increasingly merging (e.g., Business Week spent $16 million to build their new social network, Image - Connect with Urs E. Gattiker on Business Week's Business Exchange Exchange)  ==> TV Guide and Business Week: Twins?

Bottom line
Transparency is fine in theory, but difficult in practice, as demonstrated by the appearance on transparent fashion – but only on the runway. No woman really wants her undergarment on display, anymore than she wants to reveal her motivations.

As the BP Texas City refinery case illustrates, regulation neither assures compliance nor better safety for workers and consumers, unless proper audits and enforcements are also put in place.

The FTC’s new guidelines for bloggers clearly illustrate that treating one group differently than another without cause starts things off on the wrong foot, creating an unfair double-standard.

From a better governance perspective, as well as fair justice, the FTC’s “Final Guides Governing Endorsements, Testimonials – Changes Affect Testimonial Advertisements, Bloggers, Celebrity Endorsements” are not worth the paper they are written. Except that they will cause a flood of litigation.

More resources about corporate transparency, blogging, etc.:

      ComMetrics:

Bono, Gore and Schiffer join contest

      ,

 

      Queen of Sky Blog:

now Queen of Screen blog – Ellen Simonetti

      , former Delta Airlines flight attendant,

 

      ComMetrics:

Paris Fashion to organize Davos 2010

      ,

 

      Financial Times:

BP fails to comply with safety standards

      , and

 

      Office of Inspector General — Office of Audit: 2009-03-31 Employers with reported fatalities were not always properly identified and inspected under OSHA’s enhanced enforcement program.

Report number 02-09-203-10-105

Got an idea? Leave a comment! We love to hear your thoughts: are you for or against paid blog posts? What about celebrity endorsements? When and how should a blogger have to disclose a commercial relationship?

This is a chance for anyone with first-hand knowledge (this means you) to please share any lessons learned!

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  • Olka Rufos

    Great information. It’s really useful. Thanks

    What about the journalist that gets a press release describing all the great new features of a product hitting the stores now. Such material is then used for writing the editorial content about this new product and, yes of course, the journalist ends up with a positive review.

    Is that just unethical behavior or would disclosure such as: ‘… this review is based on a press release ….. and the usual disclaimers apply’ :-) make this more transparent for readers?

    Fairness and better information for consumers is what the FTC is supposed to do – but here it failed miserably it looks like.

  • Sidar

    Hi

    thanks for this post – offers great insights in the regulation and transparency debate – more is not always better definitely not if it does not treat all groups fairly.

    Transparency is a nice concept it looks like but in reality its tough to follow through with regulation – financial markets as well as blogging are just 2 examples.

    What worries me is that bloggers are treated ‘harsher’ than journalists, why?

    For instance, is WSJ’s Mossberg — who now claims that Windows 7 is a winner — less influenced by the goodies he gets from Microsoft than a blogger would be?
    Can I trust his review or is it maybe unduly influenced by the relationship he has with MS …. why is he not required to disclose this?

    These are issues the FTC seems to ignore. I am afraid that there are many more indirect means for influencing people’s judgement about a product or service they are to report about or write a review for. How about a round of golf at your favourite course in a far away place? Any takers? Incidentally, do I need to disclose this as well as a journalist or maybe just if I blog? Go figure…

    I wonder how others feel about this? I love to hear.

  • http://thecommunicationsstrategist.wordpress.com/ Deni Kasrel

    Urs,

    1) Though not for me personally, some women actually do like having their underwear visible. I see it a fair amount while riding the subway. I guess they think it’s sexy. In any case, it is a style off the runway. Fashion moves to its own beat.

    2) I am both a blogger and a journalist (not that these need be mutually exclusive, but I write for traditional press as well as have my own blog). And I used to cover the music beat rather heavily, where free CDs are pretty much mandatory, because a music writer would go broke if they had to pay for everything they covered and it is impossible to keep up with every new release on one’s own.

    Why the FCC sees a distinction between traditional media and blogging is beyond me. For honest writers in any media, receiving a gratis CD, book, tech gadget or whatever for review does not automatically infer an implicit agreement that the item gets covered at all, and/or that the coverage will be favorable.

    The news format/media is irrelevant. The FCC’s rule is what would technically be called Pure BS. I am curious to know if it has been challenged on legal grounds. Some smart lawyer or legal group will likely get to it soon enough.
    .-= ´s last blog ..How To Captivate An Audience =-.

    • http://info.cytrap.eu Urs E. Gattiker

      Dear Olka, Sidar and Deni

      Thanks sooo much for your comments on this blog.

      What I understand is that you all seem to raise the issue

      a) how much can somebody be influenced by getting a product sample or other goodies – NOT REALLY – and
      b) should there be a distinction between type of media and disclosure requirements – NOT

      I agree and I find you are all putting your finger right on the sore spot of the FTC regulation/guide.

      We will see if this is another example of bad regulation that results in worse governance and more administrative nonesense to comply with or greater transparency for consumers.

      The future will tell us on this one.
      .
      Thanks again for contributing your insights and sharing with our readers. Hope to see you comment again soon.
      Urs
      @ComMetrics
      .-= ´s last blog ..Current job openings =-.

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