FTC Wags Finger At Word-Of-Mouth Marketing

Companies using so-called “word of mouth marketing” must disclose who’s paying the shill’s bills, the FTC said Monday.

Word-of-mouth marketing can take the form of paid actors loudly ordering particular brands of spirits in bars or people who troll message boards and tout their master’s products, or recently, in the cases of McDonald’s, Sony and Walmart, fake blogs.

Whatever the iteration, the FTC’s staff advisory opinion found such marketing could be deceptive if consumers were more likely to trust the endorser, “based on their assumed independence from the marketer.”

“The FTC staff said it would go after violators on a case-by-case basis. Consequences could include a cease-and-desist order, fines and civil penalties ranging from thousands of dollars to millions of dollars,” wrote the Washington Post.

Here is a FTC complaint form. — BEN POPKEN

FTC Moves to Unmask Word-of-Mouth Marketing [Washington Post] (Thanks to Michael!)