Nov3 2009

Imposed Code of Conduct on The Online Community

As of December 1st 2009, bloggers in the US will be obliged to declare sums of money or goods received to blog about a product or service. The VIPs of social media will have to declare material benefits received to promote a company on Facebook or Twitter. These are, in brief, the new regulations of the Federal Trade Commission (FTC).

The fine for incompliance with the new rules can reach up to $11,000. How will the online environment evolve in the future in this context and what will be the impact of such decisions? What will be the distinction between an ‘endorsement’ (acting on behalf of the advertiser) and ‘personal opinion’ or how will the FTC monitor the application of this law?

A game of “catch me if you can” maybe? These are difficult questions to answer even by seasoned specialists.

Is the FTC right to create such rules? Some say the blogosphere representatives required this. And with online advertising having different facets, that are not always honest, this has become a good business. There are also opinions about blog advertising being similar to WOM advertising, as the blogger is perceived as an unbiased source, an honest dialogue partner.   However it seems there are bloggers willing to post favorable articles, reviews or product presentations in return of money or goods.

Looking at the bigger picture this is also valid for social media, where international stars or opinion leader comment, promote or simply discuss products, services or companies. By their presence in social media, opinion leaders can influence both the popularity of the network they use and the behaviour of the users. An example is the microblogging site that is closely linked to other social media such as Facebook – Twitter recorded an impressive increase in popularity in the past year after international celebrities opened accounts. According to Twitter founder, Biz Stone (@biz), the number of active users increased by 900% in the past year. How would Twitter have evolved without the presence of top stars? We cannot say for sure.

Recent studies show that social media are so popular, their use worldwide exceeds the use of email. Similarly, users spend three times more time on social media than they do online in general.

In the context of the new regulations, other interesting questions come up; how will new media evolve? How will the average user be impacted? What about the advertiser? How will user-generated content develop? Hard to say. What will online advertising look like and how much will it cost? Equally hard to say.
We will certainly hear more about ‘blogvertising‘ – a term that appeared in 2006 – and perhaps other similar ones that will be created to match the ever-changing reality of the digital world.

About
Client Service Director at Action Romania. You can connect with Florentina on LinkedIn.

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