Social Media practitioners use the word “transparency” frequently, but it seems to mean different things to different people. To me, transparency isn’t something organizations bring to their Social Media efforts but instead is a fundamental change in corporate mindset being accelerated by Social Media’s growth and adoption. It isn’t a choice made on Twitter but the way an organization may choose to live. In short, transparency is a principle, not a strategy or tactic. Some recent experiences with Fullhouse and Forrester, my current and future employers, have helped me to recognize the meaning, value, and importance of transparency.
Over the past two months, I’ve had the very good fortune to be part of the intensive recruiting process of market research firm, Forrester. As readers of Experience: The Blog know, I will start with Forrester in the San Francisco Bay area in mid-November. I feel very lucky and excited to be joining a firm I hold in high regard.
There are many reasons that I respect Forrester, but one is quite personal: the smart and respectful way their analysts responded to a blog post in which I critiqued their guidance on Sponsored Conversations (AKA Paid Blog Posts). I noted that they support Sponsored Conversations on blogs, so I jokingly offered to pay Forrester for coverage on their own Groundswell blog. Of course, I knew Forrester would never accept such an offer, but I hoped my approach might spark dialog about one of the hottest topics in Social Computing.
It certainly would have been easy enough to consider me a nuisance and opt for an opaque or translucent response, such as ignoring the post, contacting me privately, dismissing me as incorrect or uninformed, or perhaps even firing off a “cease and desist” letter to demand I discontinue quoting material from the Groundswell blog. Instead, Josh Bernoff and Sean Corcoran responded both on my blog and on the Forrester blog, and they did so in a public way, inviting response and interaction from others and engaging in open dialog.
Josh and Sean lived the transparency they recommend to their clients; they treated all voices in the debate as equal and informative, discussed rather than defended, listened, and considered. Not only did my deliberately cheeky blog post not earn their animosity, it was among the reasons they included me as a candidate for the analyst opening.
Meanwhile, as the recruiting process with Forrester grew more serious, I made the decision to be transparent with my current employer, Fullhouse. I felt I could be open about my career opportunity because the agency is a caring and transparent place. Of course, my bosses were not excited about the possibility of losing an agency leader, but they opted for support and transparency over alternatives such as showing me the door or making it difficult to take the time I needed to meet with Forrester. In the words of my boss, “Had you told me you were interviewing with the agency across the street, I’d kick your ass, but I recognize why Forrester would be such a great fit for you.”
By making transparency a part of the culture at Fullhouse, its leaders gained quite a lot: They were aware of and could plan for my departure rather than finding it a surprise; they fostered an environment of trust and respect; they reinforced why Fullhouse is such an excellent place to work; and they made my decision more difficult. Fullhouse may have lost an employee, but they continue to have a raving fan.
For Forrester and Fullhouse, transparency is a part of the culture and is represented by their care for those inside and outside the organization, their willingness to meet stakeholders halfway, the respect they demonstrate for individuals and ideas, and a commitment to live by principles that consider others’ interests, not just their own.
Tim Williams of Ignition Consulting once shared his definition of a principle, and it is one that stuck with me: “A principle isn’t a principle unless it could potentially cost you money.” Transparency can certainly cost an organization money in the short run, but a commitment to transparency will bear benefits in the end.
In an increasingly social world, brands and companies cannot build networks, earn trust, create fans, or foster influence through defensiveness, self-interest, close-mindedness, or other opaque attitudes and actions. Transparency isn’t easy, but as demonstrated by Fullhouse and Forrester, transparency is a principle that is increasingly vital in a world of frictionless communication.
We Social Marketers love to tell others how marketing is fundamentally changing, but what if that is not only counterproductive but also inaccurate? This was the provocative hypothesis explored tonight during a 20-minute car ride I enjoyed with Jeremy Epstein of Never Stop Marketing. (Apparently, I should have driven slower in order to enjoy our fascinating conversation for longer.)
Clearly, something is happening in the marketing realm--traditional media is stagnating, media consumption habits are changing, individuals have access to tools that furnish mass-media-like power and reach, technology is permitting consumers to filter and limit marketing messages, trust in advertising is low, and peer-to-peer influence and communication is increasing. But what if all this isn't so much a change as a return to the norm?
Before studying the validity of that question, let's first explore why the words we use matter. Those of us who were early adopters of Social Computing platforms clearly love and embrace change--not only are we comfortable with it, we want and demand it--but there are those who don't welcome change as easily. (To be fair, even early adopters are famous for welcoming certain sorts of change and not others--just look at the "Big Blogger" hubbub that has erupted because of tiny changes in the FTC's guidance pertaining to sponsorship and disclosure).
In addition to the fact change is scary, takes time and effort, and involves risk, there's another problem with telling people they need to change--whether intended or not, a whiff of criticism is conveyed. People who are doing things right don't need to change; conversely, someone who needs to be told change is necessary is--by definition--doing something wrong. So, it should come as no surprise that marketing decision makers may not respond to the "world is changing" message that is often conveyed by bloggers, speakers, and social media professionals.
Of course, if the world really is changing, we shouldn't hesitate to say so simply because some don't appreciate the message. But what if the evolution occurring today isn't an advance to a bold new marketing future but instead is a correction that returns the marketing profession to something known and familiar? What if Social Computing isn't pushing marketing into the unknown but is merely giving a new twist to something very old? Might decision makers be more open to Social Media if it were packaged not as the latest fad but instead as a return to the fundamentals of relationship-based marketing?
During our discussion, Jeremy mentioned Paul Revere as an example of a successful Social Businessperson, albeit one who died 190 years before Twitter and Facebook became household words. As noted in the article, "Paul Revere the Businessman," there is far more to Revere than we learned (or perhaps remember) from history books. We remember him for a single urgent horse ride on one evening, but he lived 83 years and was a successful business owner, growing his silversmithing trade into a small empire encompassing engraving, a hardware store, a foundry, and a copper mill.
What was the secret to his success? The article notes that Revere became a Mason, actively participating as an officer and helping to open new lodges throughout Massachusetts. "His involvement in Freemasonry affected his business pursuits and livelihood" and "many of Revere’s customers during the late 1700s were Masons." Records indicate that Revere's involvement in freemasonry led to regular and ongoing business over a period of almost 40 years.
Joining a group, building a network, fostering relationships, contributing to the community, and receiving a return on that time and effort? How innovative, untested, and utterly radical!
Obviously, the point being made is that, while the tools may be different today, relationship-based marketing isn't new but as old as human commerce. In fact, if marketers want to identify the upstart medium in their field, that wouldn't be Social Media but Mass Media!
The term "Mass Media" is only 80 years old. Its growth into our popular language recognized that technology was putting brand new tools of communication scale into the hands only of those few who could afford it. In the past century, Mass Media had a profound change on the way products were developed, companies formed, brands marketed, and people lived.
Today, technology is again on the march, only now it is putting the tools of scale into the hands of Twitterers, bloggers, and Facebook fans. And, we again face profound changes in the way products are developed, companies formed, brands marketed, and people live.
Clearly, a substantial and profound metamorphosis is underway, but rather than framing this to marketing executives as a risk-filled journey of experimentation into the unknown, we Social Marketing practitioners may be well advised to take a different tact. Relationship-based, one-to-one marketing that creates influence and intimacy isn't the stuff of the future but of the past. The tools may be George Jetson, but the strategy was ancient by the time Paul Revere was networking with Mason lodge members.
Attaining reach in traditional media is easy--buy an ad. Attaining reach in Social Media can be more challenging--marketers can buy ads to guarantee impressions on Social Networks, but those impressions are far less impactful than the ones that occur when consumers praise, recommend, or share their enthusiasm for a product with others.
All impressions are not equal, so it is important that metrics-obsessed marketers take care to consider subjective sentiment along with objective measures of scale. The difference between reach and sentiment can be demonstrated by assessing the impressions and attitudes generated by two recent newsmakers--Balloon Boy and Jaycee Dugard.
There isn't much that connects the stories of Falcon Heene and Jaycee Dugard, other than the way their stories captivated the hearts and attention of the nation. Heene, known as "Balloon Boy," was thought to be trapped inside an experimental balloon that became untethered, resulting in a chase watched live on cable news nets by almost 5 million people--double the usual number of viewers. Dugard reentered the national consciousness for the miraculous story of her safe return, eighteen years after she was kidnapped at the age of eleven.
These two news stories received terrific attention in the media, generating high awareness via sustained and repeated impressions. They have been featured prominently on national TV news, hit the front page of newspapers, and set the blogosphere and Twitterverse on fire. As a result, Falcon and Jaycee both became household names.
But even though the reach of these two hot stories are similar, the popular sentiment about the two couldn't be more different. Richard Heene, Falcon's dad, reportedly staged the balloon stunt in an attempt to land a reality TV show deal; instead he faces jail time and the loss of his children, and his reputation has been vilified everywhere from Twitter to editorial pages. Meanwhile, an outpouring of interest and goodwill continue to shower Jaycee Dugard; her story has been called "an inspiration" and her recent People magazine cover story is expected to be one of the year's best-selling magazines.
This certainly is an extreme example, but it effectively demonstrates how scale, in and of itself, is a pretty ineffective way to evaluate results in Social Media (or any marketing, for that matter). Tallying blog mentions of a brand or counting the tweets of a branded hashtag is nowhere near the same thing as measuring the impact of Social Marketing programs on consumer perception or purchase intent.
Marketers must be careful not to become Richard Heenes, attempting to spark buzz in any way possible in the mistaken belief that impressions matter and the end justifies the means. As Mr. Heene found, any Social PR is not good Social PR.
As some of you who follow my Tweet stream may know, I am leaving Fullhouse (a place I love full of bright people I respect) for an exciting new opportunity; I'll be joining Forrester's Foster City (Bay area) office as a Sr. Analyst of Social Computing.
You may have noticed that my blog production has been down a bit recently; that's because Forrester's recruiting process is thorough and time consuming, but also very fun and exciting. I got the chance to write my first Forrester report and then present it in their Cambridge, MA home office. (I hope to share more about this report--exploring the relationship between trust, influence, and scale in Social Media--in the future.)
I found the experience of researching and writing a report to be very similar to the process I've used on this blog, only with Forrester there are some tight (and very helpful) guidelines. Also, while blogging has been a solitary endeavour, the Forrester process is collaborative. I've always been conscious of the challenges and limitations of being a one-person research, writing, editing, and proofing team, so working on the Forrester report with another person's input was different and enjoyable.
I intend to continue to maintain this blog in the future, but the coming couple of weeks will be challenging ones as I finish up with Fullhouse, move 2,189 miles, and begin my new and exciting career at Forrester. Please continue to monitor this blog, where I hope to share observations about my transition to Forrester, explore report ideas, convey Social Media news and insights, and ask for input and guidance from my readers.
If any of you have thoughts on what you expect from a good analyst, topics that I should explore, contacts I ought to make, or even tips on the Bay Area (I'll be settling in San Mateo, 20 miles south of San Francisco), please feel free to email me (augie --at-- mkeray.com) or comment here. While ExperiencetheBlog.com may not get my full attention for a few weeks, I am committed to keeping it an exciting, informative, helpful, and interesting spot for Social Media, Social Marketing, and Social Computing commentary.
The long-awaited new guidelines from the Federal Trade Commission (FTC) were published today, and they aren't much of a surprise. While addressing blogs, message boards, and other forms of new media, the FTC didn't stray from its traditional commitment to ensure that consumers know when they are seeing paid advertising.
What does today's FTC update mean to Social Marketers and bloggers? You may find it interesting what the FTC did--and didn't--say:
1. Sponsorship = Advertising:
Given marketers' and bloggers' use of the term "Sponsored Conversations" to refer to paid blog posts, it is probably no coincidence that the FTC uses the term "sponsorship" in the following statement: “The fundamental question is whether, viewed objectively, the relationship between the advertiser and the speaker is such that the speaker’s statement can be considered ‘sponsored’ by the advertiser and therefore an ‘advertising message.’”
A blogger who posts a product-based statement independently and without commercial arrangements with the brand is not making an endorsement by the FTC's definition and thus needs not be concerned about the rules governing advertising. But as we'll see, a blogger's post that is sponsored can become an advertising endorsement and may trigger legal requirements with respect to factual information and disclosure of commercial arrangements, under certain conditions.
2. The FTC is furnishing guidelines, not rules:
The FTC has the power of Federal law to enforce legal advertising standards, but today's document defines guidelines and not rules. The Commission recognizes that the marketing and communications world is changing and is too complex for hard and fast rules. The FTC notes that it will have to “consider each use of these new media on a case-by-case basis for purposes of law enforcement, as it does with all advertising.”
So, what factors will the FTC weigh in determining if a given relationship between brand and blogger meets the standard for an "endorsement"? Today's FTC document lists the following:
Whether the speaker is compensated by the advertiser or its agent;
Whether the product or service in question was provided for free by the advertiser;
The terms of any agreement;
The length of the relationship;
The previous receipt of products or services from the same or similar advertisers, or the likelihood of future receipt of such products or services; and
The value of the items or services received.
In other words, the FTC is not tightly defining the legal standards for bloggers and brands, but it is telling us enough to advise caution with respect to paid blog posts, endorsements, and disclosure.
3. Independent consumers are still free to share their praise of brands: Some more histrionic observers felt the FTC's guidelines would limit consumers' ability to compliment and recommend products via ratings, on blogs, and in Social Networks. This is nowhere near the case; the FTC notes that “a consumer who purchases a product with his or her own money and praises it on a personal blog or on an electronic message board will not be deemed to be providing an endorsement.”
4. It is not necessarily an exchange of value between brand and blogger that triggers an endorsement but the existence of a material relationship. The FTC furnishes three similar examples of a blogger writing about a brand to draw distinctions between what is and is not an endorsement.
The first example is a simple and obvious one--the consumer buys the product and then praises it; this is clearly a legitimate, unsponsored communication.
The second example involves a blogger who posts praise after receiving free product. The key in this example is that the blogger who praises the brand is not targeted by that brand but instead receives a coupon for free product generated by a store computer based upon the consumer's past purchase patterns. In this case, the FTC notes "given the absence of a relationship between the speaker and the manufacturer or other factors supporting the conclusion that she is acting on behalf of the manufacturer (i.e., that her statement is 'sponsored'), her review would not be deemed to be an endorsement."
The last example should be considered carefully by marketers who have established networks of consumers to whom product is regularly distributed. The example involves a consumer who joins "a network marketing program under which she periodically receives various products about which she can write reviews if she wants to do so." Says the FTC, "If she receives a free bag of the new dog food through this program, her positive review would be considered an endorsement." As we'll explore later, the Commission suggests that endorsements made via blog posts require disclosure and adherence to the legal requirements of paid advertising.
5. Giving product to bloggers for the purpose of posting reviews may or may not make the bloggers' recommendations an "endorsement" (but it probably does): The FTC takes great pains to try to address the issue of brands that disseminate free product for the purpose of garnering positive product reviews in Social Media. The Commission states that a blogger who "receive(s) merchandise from a marketer with a request to review it, but with no compensation paid other than the value of the product itself" may be considered "endorsed" by the brand depending upon "among other things, the value of that product, and on whether the blogger routinely receives such requests."
The FTC clarifies that last portion of their statement in this way: "If that 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.'" In the view of the FTC, "Although the monetary value of any particular product might not be exorbitant, knowledge of the blogger’s receipt of a stream of free merchandise could affect the weight or credibility of his or her endorsement."
In other words, someone who maintains a review blog and regularly receives free product for the purpose of authoring and posting reviews is more likely to be considered an "endorser" than a blogger who only occasionally receives products to review. Some find this curious, because it seems contrary to established practices in traditional media. There are, of course, journalists--such as movie reviewers or food critics--who frequently receive free product, but their articles in newspapers and magazines are not considered "endorsements" per the FTC.
To those who want to make the case that bloggers are being treated differently than journalists in traditional media, the FTC has a response: "The Commission acknowledges that bloggers may be subject to different disclosure requirements than reviewers in traditional media." In other words, get over it!
Regardless of whether you find this guidance puzzling or not, this much is clear: The FTC is putting brands on notice. Giving free products to popular bloggers or recruiting networks of consumers into "word of mouth marketing programs" for the purpose of distributing free products for review will likely be considered and regulated as paid media.
6. The fact that compensated bloggers are free to say whatever they want does not prevent their posts from being considered legal endorsements: It doesn't matter that a brand pays a blogger and then permits him or her to express anything s/he wants, without editorial control or rules. And it also doesn't matter that bloggers compensated by a brand feel they are expressing their true and honest opinions, unbiased by the commercial arrangement. The FTC notes that “an advertiser’s lack of control over the specific statement made via these new forms of consumer-generated media would not automatically disqualify that statement from being deemed an ‘endorsement’ within the meaning of the Guides.’”
7. The fact that compensated bloggers are free to say whatever they want does not protect the brand from the legal responsibilities that come with paid advertising: The FTC understands that marketers may not have control over what bloggers say, but "if the advertiser initiated the process that led to endorsements being made – e.g., by providing products to well-known bloggers or to endorsers enrolled in word of mouth marketing programs – it potentially is liable for misleading statements made by those consumers."
The risks to brands also include the risk that a compensated blogger fails to disclose the material relationship. Notes the FTC, "In employing this means of marketing, the advertiser has assumed the risk that an endorser may fail to disclose a material connection or misrepresent a product, and the potential liability that accompanies that risk." The Commission promises, should legal action result from a blogger's failure to disclose, that it will "exercise its prosecutorial discretion" and "consider the advertiser’s efforts to advise these endorsers of their responsibilities and to monitor their online behavior."
In short, marketers must understand they are accepting certain legal risks by entering into Sponsored Conversations. These risks can be mitigated by carefully apprising bloggers of rules for disclosure and accuracy and then monitoring them for compliance, but this does not completely eliminate all risk.
8. Because Social Media is a vehicle for authentic peer-to-peer dialog, the presence of sponsored speech (i.e., advertising) is suggesting a greater need for disclosure than may be required in other media.
The FTC recognizes that the medium matters; consumers are more likely to recognize advertising as advertising in some media more than others. A TV ad is clearly "sponsored" and thus does not require any special disclosure on the part of advertisers or networks. But in Social Media, the distinction between earned and paid media is far less evident to consumers.
The nature of Social Media and the FTC's greater expectation for disclosure is evident in their revised example pertaining to a video game blogger who is sent a free game system by a manufacturer, along with a request that the blogger write about the system. Notes the Commission, "Because his review is disseminated via a form of consumer-generated media in which his relationship to the advertiser is not inherently obvious, readers are unlikely to know that he has received the video game system free of charge in exchange for his review of the product, and given the value of the video game system, this fact likely would materially affect the credibility they attach to his endorsement" (emphasis mine).
9. If your organization doesn't have Social Media guidelines in place, create and communicate them ASAP!
The FTC notes that employers are liable for the actions of their employees in Social Media. For example, if an employee participates in a Facebook forum or bulletin board by praising his or her employer's brands but fails to disclose his or her relationship to the brands, that could trigger prosecution.
The FTC notes that legitimate efforts to create and enforce rules that protect consumers from injury "would warrant consideration in its decision as to whether law enforcement action would be appropriate." Moreover, the FTC notes that "although the Commission has brought law enforcement actions against companies whose failure to establish or maintain appropriate internal procedures resulted in consumer injury, it is not aware of any instance in which an enforcement action was brought against a company for the actions of a single 'rogue' employee who violated established company policy."
So, get your Social Media policies in place and actively enforce them. Not only is this a good, common sense practice, it also helps to establish a defense in the event one of your employees strays into a legal minefield.
10. The FTC has outlined when material relationships must be disclosed, but it still hasn't said what constitutes "clear and conspicuous" disclosure on blogs, microblogs, or elsewhere in Social Media.
The FTC's approach to disclosure requirements is based on three primary questions:
Does a material relationship exist between endorser (i.e., blogger, consumer posting in Social Media, etc.) and brand?
If so, would the presence of this material relationship affect the weight or credibility given to the endorsement by consumers?
If so, is the endorsement likely to be recognized as paid advertising by consumers based on the circumstances, communications vehicle, and medium?
The FTC outlines a slew of diverse and subtle examples of when material arrangements relating to endorsements must be disclosed, both in Social and traditional media. For example:
A film star appears in a commercial endorsing a food product in exchange for a $1M fee or royalties on sales; no disclosure is required because such payments likely are ordinarily expected by viewers.
A well-known professional tennis player appears on a talk show and raves about the laser vision correction surgery at a clinic that she identifies by name. The athlete does not disclose that she has a contractual relationship to speak publicly about the clinic. Consumers might not realize that a celebrity discussing a medical procedure in a television interview has been paid for doing so, and knowledge of such payments would likely affect the weight or credibility consumers give to the endorsement. Thus, disclosure is legally required.
The same tennis player under the same contract endorses the clinic via a real-time Social Media site, and the same rules apply; consumers might not realize that she is a paid endorser and knowing this might affect the weight consumers give to her endorsement, so the relationship with the clinic should be disclosed.
A physician endorses an anti-snoring product. Consumers would expect the physician to be reasonably compensated for his appearance in the ad, so no special disclosure is required to alert consumers the physician was paid.
But the same physician in the same ad may require disclosure if he receives a percentage of gross product sales or he owns part of the company; either of these facts would likely materially affect the credibility that consumers attach to the endorsement. Accordingly, the advertisement should clearly and conspicuously disclose such a connection between the company and the physician.
So, assuming a brand does have a commercial arrangement with a blogger, the blogger endorses the brand's product, and this relationship requires disclosure in the blog post, what meets the legal definition of "Clear and Conspicuous" disclosure? The FTC doesn't attempt to address this question at all. In other FTC documents, it establishes standards as to how proximal and evident disclosures must be, but the new guidelines do not attempt to address acceptable disclosure in Social Media. It is left to brands to discern if its disclosure policies are sufficient under the laws and guidelines established by the Commission.
Marketers are advised to ensure sponsored bloggers write and construct their blog posts in a way that make the disclosure immediately apparent to even the most casual of readers. This means disclosure in the headline or in the first part of the blog post and not a brief mention at the end!
The FTC guidelines are purposely vague, but their direction is clear. The FTC is taking a conservative approach to whether compensation to bloggers and others in Social Media--be it cash or free product--must be disclosed to consumers. The Commission's guidance suggests that the sorts of arrangements that involve remunerating others to promote products via WOM make their blog posts and other comments in Social Media legal endorsements. Since these endorsements are not expected or recognized by consumers as paid media, the FTC believes that disclosure is most likely required.
Marketers and bloggers who engage in these sorts of commercial arrangements must understand their legal obligations and the risks of failing to adhere to FTC laws pertaining to advertising. Marketers must be prepared to ensure that bloggers disclose material relationships and do not make false or unsubstantiated claims; bloggers who are compensated are also potentially legally liable for their failure to disclose commercial arrangements or for incorrect claims communicated via their blog posts.
As noted, the FTC believes each situation is unique and must be evaluated on a case-by-case basis. As enforcement actions occur in the future, we will be provided with further clarifications to how the Commission and courts interpret the legal issues of sponsorship, endorsement, and disclosure in our new and evolving Social Media channels.
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