Disclosure of Material Connections

Disclosure of material connections: what you need to know

David Kamerer, PhD, APRLoyola University Chicago

Executive summary:

If you have a material connection with a product or service and write about it, you must disclose that connection to your readers.

Example: You write a restaurant/food blog. You receive a free meal at Joe’s Restaurant. If you write about your meal, you must tell your readers that you did not pay for your meal.

This also extends to influencers.

Logos

Pathos

Ethos

Sources of information, old model:

Journalism

Advertising

Sources of information , new model:

JournalismAdvertisingMedia relationsOwned mediaOnlineSocial

Edelman model: media cloverleaf

Everyone is a publisher

PayolaBlogolaAdvertorialInfo-tainmentChurnalismPay-per-play

The tragedy of the commons

Background

Edelman and Wal-Mart

2006walmartingacrossamerica.com

“Working Families for Wal-Mart”

The FTC rules

16 CFR Part 255

“Guides Concerning the Use of Endorsements and Testimonials in Advertising”

Dec. 1, 2009

•Restrictions on describing “typical” results in advertising•Guidelines for celebrity product endorsers•Guidelines for disclosing material connections between advertisers and endorsers

Ann Taylor

Key takeway: it is the advertiser’s responsibility to assure disclosure, not the blogger’s

Reverb Communications memo:Reverb employs a small team of interns who are focused on managing online message boards, writing influential game reviews, and keeping a gauge on the online communities. Reverb uses the interns as a sounding board to understand the new mediums where consumers are learning about products, hearing about hot new games and listen to the thoughts of our targeted audience. Reverb will use these interns on Developer Y products to post game reviews (written by Reverb staff members) ensuring the majority of the reviews will have the key messaging and talking points developed by the Reverb PR/marketing team.

Reverb Communications memo:

Internal User Reviews Process:

o Internal “User Reviews”o Pre-written by in house writerso Positive reviews – not over the top – but endorsing the game as a good producto Age ranges+ 12 – 18+ 19 – 25+ 26 – 34+ 35 – 45+ 46+* Written from the angle of each age group including key words that resonate with each audience* Reviews begin to go live on day of launch on the iPhone storefront

Reverb Communications

Legacy Learning Systems$5 million sales

$250,000 fine

50 Cent

+ 290% in one day$8.7 million

Codes of Ethics

PRSA’s Code of Ethics has a provision entitled “Disclosure of Information,” based upon the principle is that “open communication fosters informed decision making in a democratic society.” The intent is “to build trust with the public by revealing all information needed for responsible decision making.”

The code states that a member shall:

Be honest and accurate in all communications.Act promptly to correct erroneous communications for which the member is responsible.Investigate the truthfulness and accuracy of information released on behalf of those represented.Reveal the sponsors for causes and interests represented.Disclose financial interest (such as stock ownership) in a client’s organization.Avoid deceptive practices.

IABC

Professional communicators do not accept undisclosed gifts or payments for professional services from anyone other than a client or employer.

WOMMAStandard 1 – Disclosure of identity:  A WOMMA member shall require their  representatives1 to make meaningful disclosures of  their relationships or identities with consumers in relation to the marketing initiatives that could influence a consumer’s purchasing decisions.

Standard 2 – Disclosure of consideration or compensation received:  A WOMMA member shall require their representatives to disclose meaningfully and prominently all forms of consideration or compensation they received from the member, marketer or sponsor of the product or service.  In other words, WOMMA members shall not engage in marketing practices where the marketer/sponsor or its representative provides goods, services, or compensation to the consumer (or communicator) as consideration for recommendations, reviews, or endorsements, unless full, meaningful, and prominent disclosure is provided.

WOMMA, cont’d:Standard 3 – Disclosure of relationship: A WOMMA member shall require their  representatives involved in a word of mouth initiative to disclose the material aspects of their commercial relationship with a marketer, including the specific type of any remuneration or consideration received.

Standard 4 – Compliance with FTC Guides: A WOMMA member shall comply with the Guides Concerning Use of Endorsements and Testimonials in Advertising promulgated by the Federal Trade Commission.  See 16 C.F.R. §§ 255.0–255.5.

How to: blogs

Disclose in-post

Site disclosure

How to: blogs

Would a single disclosure on my home page that “many of the products I discuss on this site are provided to me free by their manufacturer” be enough?A single disclosure doesn’t really do it because people visiting your site might read individual reviews or watch individual videos without seeing the disclosure on your home page.

Would a button that says DISCLOSURE, LEGAL, or something like that be sufficient disclosure?No. A button isn’t likely to be sufficient. How often do you click on those buttons when you visit someone else’s site? If you provide the information as part of your message, your audience is less likely to miss it.

Examples of in-post disclosures

Not quite a disclosure: c/o (“courtesy of”)

In- post

SiteState-ment

Site disclosures: two parts

A statement of acceptance:

A statement of independence:

(alllacqueredup.com)

Short disclosure policies

(putthison.com)

BlogWithIntegrity.comBy displaying the Blog with Integrity badge or signing the pledge, I assert that the trust of my readers and the blogging community is important to me.I treat others respectfully, attacking ideas and not people. I also welcome respectful disagreement with my own ideas.I believe in intellectual property rights, providing links, citing sources, and crediting inspiration where appropriate.I disclose my material relationships, policies and business practices. My readers will know the difference between editorial, advertorial, and advertising, should I choose to have it. If I do sponsored or paid posts, they are clearly marked.When collaborating with marketers and PR professionals, I handle myself professionally and abide by basic journalistic standards.I always present my honest opinions to the best of my ability.I own my words. Even if I occasionally have to eat them.

Microchannels: Twitter, Facebook, SMS

What about a platform like Twitter? How can I make a disclosure when my message is limited to 140 characters?

The FTC isn’t mandating the specific wording of disclosures. However, the same general principle – that people have the information they need to evaluate sponsored statements – applies across the board, regardless of the advertising medium. A hashtag like “#paid ad” uses only 8 characters. Shorter hashtags – like “#paid” and “#ad” – also might be effective.

#paid#ad#client#sponsored

Core values/social channels:

honestywillingness to listentransparencyopennesshuman voicethe people own your brand

Resurgence of journalism and other trusted channels?

Content curation

Filters

For more information:

http://davidkamerer.com(search for “disclosure”)

http://www.delicious.com/davidkamerer/disclosure

Thank you