FTC Gags Stealth Marketing

If a company wants to try out word-of-mouth marketing, they need to understand that building buzz without disclosing who's paying for that marketing could cause them a Federal-sized headache.

Word-Of-Mouth Marketing Association says there is a difference between buzz and stealth marketing. While buzz marketing ultimately can be identified by a consumer, stealth marketing cannot. That's why WOMMA has noted how the FTC response to an October 2005 report reiterated that marketing relationships need to be transparent. FTC declined to fully endorse a petition from a watchdog group in Oregon called Commercial Alert, which would have required FTC to take action against word-of-mouth marketers and compose guidelines for that type of marketing. A number of opinions about the FTC opinion have circulated through the blogosphere today as others offer their thoughts on the topic. Publishing 2.0 blogger Scott Karp Another blogger, Tony Hung writing at Deep Jive Interests, deconstructing a site that submitted a list of weight loss tips to several sharing sites received near-universal acclaim for revealing the site to be host to a variety of affiliate links. There just seemed to be one problem with the much-lauded accusations. The list of tips provided, while nothing earth-shattering, wasn't useless either. Despite the list's presence on a site focused on dental issues, it got a lot of attention and probably earned a few affiliate click-throughs. Was it stealth marketing? By virtue of non-obvious disclosure of the affiliate relationships, possibly. Was the list junk? Judging by its content, no. If the FTC makes an example of such affiliate-driven sites by attempting to fine them, a lot of other questions will be raised. Is this a stifling of free speech? If the customer derives a benefit from an affiliation and is not defrauded, has an offense taken place? Somewhere at some point this will be tested by the FTC, and rebutted by someone's lawyers. Being forthright and transparent with promotional plans will be a better course of action, though. Add to Del.icio.us | Digg | Reddit | Furl Bookmark Murdok: David Utter is a staff writer for Murdok covering technology and business.