Internet bloggers and Hollywood sport and music industry celebrities looking for a fast buck, from slapping their endorsement on a product could soon face having to take responsibility for any problems associated with the product under tough new US laws relating to deceptive advertising practices.
US officials say that the celebrities and bloggers will now be held liable for any false statements they make about products as part of a crackdown by US regulators on deceptive advertising practices.
The new rules on the use of testimonials in advertising, released by the Federal Trade Commission claim that anyone who endorses a product, including celebrities and bloggers, must make explicit the compensation received from companies.
According to the Financial Times in the UK many of the new guidelines, which were expected, are focused on online word-of-mouth and social-media advertising, two categories that have grown during the recession. Spending on social media marketing reached $1.35bn in 2007 and is expected to reach $3.7bn by 2011, said the Word of Mouth Marketing Association.
In recent months Companies in Australia like Panasonic, Samsung and Sony have invested in new online marketing programs spanning Twitter, Facebook and via email marketing.
“The FTC is trying to get a grip on this new media, and in doing this they’re saying they need full and complete disclosures,” said Mr DiResta. “But this industry is changing by the hour when you’ve got all sorts of social media platforms, whether they’re blogs or tweets.”