"Sponsored blogging" firm adopts disclosure requirement

In the wake of last week's Federal Trade Commission staff opinion on stealth marketing, one of the leading pay-for-posts companies has changed its practices. On December 18, PayPerPost altered its terms of service to require some form of disclosure by bloggers who accept money to talk about products or websites.

Stealth marketing attempts to build grassroots buzz about a product by using "real people" to pitch it—without disclosing the fact that they are being compensated to do so. Although the FTC declined to initiate a widespread investigation of the industry, it did note that "the failure to disclose the relationship between the marketer and the consumer would be deceptive unless the relationship were otherwise clear from the context."

PayPerPost's change requires that bloggers who use the company's marketplace to earn money for posting about products and services disclose the fact that they are paid, but it's not a robust disclosure. All that's required is a static message anywhere on the site saying that some posts are sponsored.

The move indicates that the FTC action is already having effects on the industry. Ted Murphy, the CEO of PayPerPost, says that the change will make his company more attractive to marketers, since it can now "deliver the highest online marketing ROI [return on investment] with less risk of future FTC scrutiny."

Plenty of advertisers are not excited about the change, though, if the company's forums are anything to go by. One advertiser explained his position (before the new policy was announced), telling bloggers that "I would prefer that PPP was not mentioned. I can understand your positions, but I hope you realize that Google seriously frowns upon paid links. It lowers the value of that link and some even say it will get you banned from the index."

Google frowns upon them, of course, because it's difficult to trust someone who's taking money to discuss a product. And yet numerous PayPerPost bloggers have convinced themselves that they are always scrupulously honest in discussing the "opportunities" that they are presented with. "Since I never lie, it doesn't seem necessary to indicate each post," wrote one. "I also do not want someone to see 'paid' and think it doesn't mean as much, because at no point will paid = no (sic) honest. At least in my book," said another.

First came the astroturf groups, and now bloggers have followed in their wake. Corporations have realized that the most trusted advertising comes from impartial observers. As the old adage goes, when all you've got is a hammer, everything looks like a nail, and marketers used to buying influence with dollars have just extended the concept a little bit further. Are there any limits to what will be done in the name of the almighty dollar?

:source: Source: http://arstechnica.com/news.ars/post/20061221-8480.html
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