DMN3 Blog

If so, how well do they comply with the recently revised FTC Guides on Endorsements and Testimonials? It’s my experience that many such online reputation management efforts either ignore or violate the spirit of the new FTC Guides. Online reputation and image management is now an essential part of "public relations" for many companies.

Last week, I discussed the recently revised FTC Guides for governing the use of endorsements and testimonials in advertising. Online reputation management is a service provided either “in house” or through third party digital PR or marketing agencies, such as New Media Strategies, BzzAgent, Brickfish and Ammo Marketing. Their efforts are geared at altering word of mouth perceptions across the Internet. The idea is to counter negative online publicity or word of mouth "noise" with positive postings.

The positive postings work like this - (1) Pushing the negative content lower in search results, review sites, news feeds, etc. so they are less visible and less likely to be read. And, (2) creating a more positive overall tone for the product or service. If the number of positive postings far outnumber the negative, consumers tend to downgrade the relevancy of those that are "negative nancies."

Yelp.com, one of the most prominent review sites with over 10 million reviews, is under fire. Several class action lawsuits have been filed against the review site alleging that it has unscrupulous sales practices and runs an extortion scheme. They allege that negative reviews are removed or modified (moved lower down the list) for businesses if they agree to sign an advertising contract with monthly payments. Yelp denies the allegations and that it manipulates the content of its Web site. Learn more about the lawsuit. Basically what the lawsuits claim is that Yelp does “reputation management” on its review sites in return for advertising revenue.

Yelp has responded by making changes. It is eliminating "Favorite Review" which was part of its ad package and is increasing transparency. You can see Yelp's April 5th CEO's Blog Post on the subject.

Be aware that what appears to be a grass roots market of opinions, recommendations and endorsements may often not be dominated by grass roots consumers. Instead, many companies see these social media sites as opportunities to influence word of mouth about their brand. Companies are plenty aware of the 70% of Internet users trust online recommendations and reviews - (Nielsen Study)

PR/Image firms are tracking negative comments about just about everything these days. They often seek to either change the minds of those who post negative content or use other social media postings to counter those comments.

They monitor “key influencers” and seek them out to help spread their message quickly. These key influencers are well respected in their discipline and have a large online following.

Anyone can say anything on the Internet. It’s just a plain fact that many of the reviews on such sites are fiction, written by someone who stands to profit from the review. Often people are compensated to write reviews by either direct payments or free products or service. On the other hand, there are many reviews posted on the Internet by consumers who wish to share their experience with a particular product or service.

The revised FTC Guides governing endorsements and testimonials clearly and explicitly states that any “material connection” must be disclosed. Material connection includes payments or free products or services. They also state that endorsements/testimonials must reflect the honest opinions, findings, beliefs, or experience of the endorser.

It is abundantly clear from the Guides’ examples, that they apply to social media sites on the Internet as well as to what we would immediately recognize as advertising. That means that Twitter or Facebook postings that tout a restaurant lunch must disclose any material connection that might exist between them and the restaurant.

Online reputation management systems or firms recognize the new FTC Guides. They work by reaching out to tweeters, bloggers, reviewers, etc. who have an online following that is relevant to their client’s market. They offer incentives to post about their client. The firms are also supposed to educate the people they utilize regarding their responsibilities to adhere to the FTC Guides when they post or comment online.

The Washington Post ran a story about this topic and how Domino’s Pizza used key influences and their blogs to help spread the word of its new recipe. You can access the story here: Reputations at Stake, Companies Try to Alter Word of Mouth Online

Unfortunately for the consumer, the FTC Guides are often ignored or downplayed dramatically when it comes to postings by those with a material connection to the brand they are discussing online.

Remember  what you see, hear or read on the Internet is not always reality. Perhaps we should be less trusting of what we see in the way of online reviews, testimonials and endorsements. As with everything in the business world, consumers should have a “buyer beware” mindset when gathering product or service information online.