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FTC keeping an eye on web endorsements

Social media marketing still has a sense of the “Wild, Wild West” about it, in that marketers remain unsure of what is ethical, and what isn’t, in some areas. The Federal Trade Commission is serving notice, however, that the sheriff in town is paying attention to user reviews.

The FTC revised its ethics guidelines last year to encourage marketers to disclose expected or typical results of a product’s use under normal circumstances, instead of “results not typical” outcomes. The guidelines also affected marketers’ use of online reviews.

The agency said this week that California marketing company Reverb Communications had settled charges that it engaged in deceptive advertising when its employees wrote and posted positive reviews of clients’ games in Apple’s iTunes store. The bigger problem, according to the FTC, is that they didn’t disclose that they were paid to do so.

On a related note, marketing services firm Epsilon released a study this week showing that young consumers – those that spend many hours per week on the web – trust offline marketing materials more than online pitches. The ease with which a marketer can manipulate online content is a major reason why that’s the case.

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