December 1, 2009 marked the day the Federal Trade Commission (FTC) implemented its new “Guides Concerning the Use of Endorsements and Testimonials in Advertising.” The guides address endorsements by consumers, experts, organizations, and celebrities, plus the disclosure of important connections between advertisers and endorsers. The FTC spent two years making these revisions, so it’s safe to say they’ll be more vigilant about cracking down on those who fail to comply.

Why the Revision…
Quite simply, the document was getting stale and the update was long overdue. The previous version had not been touched for 20+ years and the guides weren’t developed to include trends such as Internet advertising, viral marketing or consumer blogs.

As our media environment continues to morph and social media ramps up in intensity, advertisers no longer fully control the endorsements being made. It’s becoming easier for regular consumers and celebrities to make off-the-cuff comments about products or companies – intentionally or inadvertently. Because of this, the FTC implemented changes to the guides to continue protecting consumers from false and misleading advertisements.

Endorsement vs. Testimonial…
In the past, a celebrity made an endorsement and an average consumer made a testimonial. Now, the term endorsement is practically synonymous with testimonial. The FTC defines an endorsement as any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings or experiences of a party other than the sponsoring advertiser, even if the views expressed are identical to those of the sponsoring advertiser.

What Changed…
1. Results not typical disclaimers (Think Weight Watchers, Subway, etc.)

• “Results not typical” is no longer a safe harbor, especially for weight-loss messages
• Advertisements now have to be substantiated and disclose what the typical result is for the average consumer

2. Disclosure of material connections

• The connection (payment, free products) between the endorser and company must be identified.
• Disclosure is only necessary when the comment could influence a consumer’s opinion, positively or negatively.
• Example: Lance Armstrong partnered with FRS Healthy Energy to promote their energy drink. If he talks about this supplement on Oprah, he has to explain he’s a paid endorser. Two ways to accomplish this: the disclaimer can be in the end credits, or the endorser can weave into conversation that he is endorsing the product. The same thing applies to Twitter or Facebook messages; the connection must be disclosed either in the person’s profile or directly in their comment (Most celebrities aren’t doing this…yet).

3. Liability of advertisers

• Advertisers and endorsers are both liable for false/misleading/unsubstantiated claims.
• It is the endorser’s responsibility to make sure the message they are delivering is accurate, and to disclose their material connection to the product or company they’re endorsing.

Proceed with Caution…
If you, as a consumer, blog about the great cup of coffee and outstanding service you received at your neighborhood Starbucks on your way to work, you’re indirectly endorsing the product. If Starbucks sees your message and sends you a coupon to say thanks, you’re not liable. You become a sponsored endorser when Starbucks reaches out and asks you to talk about or review their product in exchange for free coffee – now you’re responsible for disclosing the relationship.

An easy way to protect yourself is to add a “Terms of Use” page to your blog outlining that you are not a professional or expert and aren’t affiliated with the companies mentioned in your blog. That’s also where you can include the products or companies you do endorse or support and whether or not you are paid for those messages. You can get a free disclosure policy from www.disclosurepolicy.org.

Quick Reminder…
While it’s in your best interest to comply with the guidelines, remember they are advisory in nature – not law – and they don’t always apply. You be the judge.

For a complete copy of the new guide, go to: http://www2.ftc.gov/os/2009/10/091005revisedendorsementguides.pdf

But unlike big brands such as Nike, Starbucks and Honda, most small businesses/organizations across the country are NOT the subject of intense Twitter conversations and mock YouTube videos. You (fortunately) don’t have Facebook groups protesting your business practices, right. So why not lay low until a crisis occurs or some other “conversation threshold” has been crossed?

My answer? Don’t think QUANTITY, think RELEVANCE. Remember, it only takes one fly to ruin your soup. Say a person wrote a disparaging blog post about your company.  Only you can decide what’s “relevant” what isn’t. Yes, should consider quantitative data such as the blog’s Technorati rating and inbound links, but consider qualitative factors such as:

• Familiarity – Is the blogger well-known and respected in your industry?
• Content Quality – Is the blog’s other content credible and thorough?
• Message – Is their commentary accurate or clearly off-base?
• Traffic – Is their blog a heavily trafficked site?
• Influence – Is this person well connected? How much damage can they cause?
• Comments – Are other people “piling on” to the discussion? Does anyone care?
• Viral Nature – Is this conversation being referred or linked to by other blogs/Twitter posts?

Quite often, one rogue blog post can be ignored as a fluke. But if you’re gut tells you that it could be relevant to your organization, you’re able to make a much more informed decision as to a response or remedy.  But it MUST be a decision based on more than numbers alone.

And remember, if there’s a fly in your soup, he’s having a pretty bad day, too….

HP provided 31 “HDX Dragon” computer systems to 31 carefully selected bloggers/influencers to give away to lucky readers on their own sites over 31 days (one per blogger). A key success factor, HP/Buzz Corps really took the time to to know the bloggers. Each blogger was allowed to set their own contest/giveaway rules that were customized to the respective audience and goals.

The bloggers created their own custom marketing materials (microsites, graphics, logos, videos, RSS feeds) and shared/cross promoted with each other. The net relationship was more of a partnership with each other and HP vs. a traditional product giveaway program.

Impressive Takeaways
During the promotion, the 31 bloggers heavily promoted the contest, HP, the HDX Dragon and each other, demonstrating the collective power of the community banding together. Each participating blog site not only saw a 150% – 5,000% increase in traffic, but also sustained traffic levels for several months after campaign was finished.

Impossible to achieve with with traditional media, here are the results based HPShopping.com, month over month data:

• 84% increase in sales on the HDX Dragon System
• 14% increase in overall traffic
• 10% increase in overall consumer PC sales
• 50 million impressions (Alexa data)
• Treasure trove of consumer feedback and traffic stats to be used in future planning and development
• 10,000 reader/entrant videos on YouTube.com and Blip.tv
• 380,000 links discussing the giveaways (per Google)
• 25,000 entries received by the 31 participating blogs

Costs
$250,000 for the 31 computer systems given away including shipping, software, etc. Zero dollars spent on media. While the costs for Buzz Corps aren’t available, they’re likely to be in the $75,000-100,000 range (my guess). Even if they were higher, they were worth every penny for the amount of exposure and good will created for HP. Mucho props to them for pulling off such a successful social media campaign.

Here are 5 THEN vs. NOW Observations

1 – Hesitation to Give Employees Access to Customers

(1995) “We can’t let our employees use email — it’s not considered official and we can’t control what they say. They’ll just gossip all day with their friends and relatives. Plus, our customers prefer telephone to email anyway.”
(2009) “We can’t control what people say about our company/brand in social media. We discourage our employees from talking about our company on Facebook and Twitter as they’re not part of our official communications department. Plus, our customers aren’t using social media anyway.”

2 – Only Young People Use It

(1995) “Email and the Web are only for academics, engineers and teenage boys searching for porn. Normal business people don’t use it, especially if they’re over 40 years old.”
(2009) “Social media is only for college kids and recent graduates. Normal business people don’t use it, especially if they’re over 40 years old.”

3 – I Don’t Have Enough Time
(1995) “People waste hours of time online talking to strangers they’ll never meet. They get addicted and ignore the real people in their life. I have real work to do and can’t be bothered.”
(2009) “I don’t care about what you had for lunch. Why should I Twitter with strangers and read blog comments? I don’t have enough time in the real world let alone the virtual one.”

4 – I Can’t Make Enough Money On It
(1995) “I’m not wasting my agency/organizations time learning about the Internet when there’s so little money to be made. I’m going to wait until a clear path to revenue has been established.”
(2009) “I can’t justify investing in a social media program unless you can prove an ROI. I’m going to wait until industry standard success metrics and money making formulas are established so I can sell this to my boss.”

5 – I Don’t Know How to Measure It
(1995) “I have no idea who is visiting my website and what they’re doing. Visits? Hits? Time on Site? And how does any of this help me improve my business?”
(2009) “Who is watching my YouTube videos? How can I get more Twitter followers? What’s the value of a view, comment, re-tweets and friend? And how does all this activity improve my business?”

Mind you, there’s a degree of truth to every comment – both then and now. My takeaway lesson is that when it comes to change, it’s good to not only reflect on where we’ve been, but also the vibe/climate that existed at that time. It might feel strangely familiar which gives you perspective on the challenges of today and the opportunities of tomorrow.

You can’t do it all with social media. There, I said it. I know marketing budgets have been slashed and management is clamoring to use those free, newfangled Web 2.0 tools. But you can’t turn to social media to save the day. It sucks, I know.

Social media is a slow build. Blog and Twitter page don’t just “go viral” before your eyes. It’s more like planting a seed, fertilizing it and tending to it carefully over time. The more you support it with complementary traditional advertising, the better the odds on it taking root and blossoming. Cross channel marketing of social media initiatives is extremely helpful, but easily overlooked, especially during tough economic times. Remember the Subservient Chicken campaign by Burger King? Yah, it was supported by a national television advertising campaign whose cost were certainly NOT chicken feed. They spent a few hundred grand on a cool Web site/social media initiative, but then invested several million dollars in advertising to support it. Very important point not to forget.

Or how about Barack Obama’s presidential campaign that set a new standard of excellence for grassroots, Internet marketing — seemingly deploying every social media channel available. According to BusinessInsider.com Obama’s spend on the internet was a surprisingly low $8 million. That’s just 3% compared to the $245 million he spent on television advertising. Clearly he wouldn’t have spent such a colossal some on television if it wasn’t necessary.

Change doesn’t have to be light-switch proposition. Start a social media initiative today, but be sure to make sure it’s “on brand” and supported by complementary advertising/public relations. Over time (months or years), transition money from the traditional media budget into the social media campaign itself, but only after it has sprouted and is displaying positive signs of growth. Abandoning a social media campaign to survive on its own does nothing more than waste your time/money and seal its fate as a failure.

Sincerely,

Gary

I’m very happy to share this guest interview with David Griner, a social media strategist for Luckie & Company and the mastermind behind The Social Path blog. Also a contributor to Adweek’s AdFreak.com,  he has done social media work and training for Little Debbie, Blue Cross and Blue Shield of Alabama, to name but a few of his clients.

I was particularly interested in the role AGENCIES play in working with (or on behalf of) their clients engaging in social media projects.

Q: When doing outreach to possible online community leaders and other individual people within a client’s target audience, how/when does the agency disclose they’re a hired gun vs. the actual client? Does it matter?

David: I think it only matters to the extent that you want the recipient to know that you’re legitimate. I generally just say I’m a social media coordinator for a certain business, then my agency info is at the bottom. I’m rarely the first marketer to ever contact a blogger, so they usually understand the role that agencies and consultants play.

Q: When is it acceptable to write/post material such as blog posts or Twitter updates for a client? Traditional media has ghost-writing, but is this acceptable in social media?

David: Personally, I think there’s nothing wrong with starting a blog or Twitter feed with client approval and helping launch it with content. It helps establish a tone, frequency standards, response policies, etc. But you definitely always want the goal to be that you’re phasing in the client as the content producer. A big part of that relationship is helping clients figure out how they’ll staff these things. They look to us for a realistic expectation of time and workload. I think this training and structuring is a far greater challenge than the fun work of simply maintaining a feed.

Q: How does an agency respond when a client replies, “Social media tools are free. Why do I need an agency anymore?”

David: My agency has been pretty clear that, when it comes to social media, we’re not in the content management business. It’s simply not an efficient use of our clients’ time and money. We see our role is two-part: First, help strategize and develop social media tools that are right for each specific client. Second, work closely with the client to incorporate these tools into their corporate structure and strategic goals.

Is it possible to do all this without an agency, consultant, etc.? Absolutely. But the company will have to draw the resources from somewhere, and turning to someone experienced with social media (and trustworthy) generally saves a business from a lot of headache and false starts.

If a client is shutting the door on your agency because they don’t feel it’s worth bringing you in to help with social media, it’s probably a sign of a bigger problem with the relationship. In my experience, clients have generally seen it as an affordable investment with an agency they trust to look out for their interests long-term.

Q: What advice would you give to an ad agency or PR firm about using social media to build and nourish a brand vs. trying to maintain control?

David: I feel strongly that social media channels should be in the clients’ hands. It makes them more effective, more honest and more influential. That said, I think these channels will prove to be vital marketing and PR tools for agencies down the line. I think you can nourish a brand and maintain control of its social media presence in the short term, but without corporate buy-in for the long haul, we’re just playing with toys.

Q: Finally, if you were a business executive interested in social media, what would you be looking for from your agency?

David: I’d want someone who was light on ego, heavy on smarts and experienced with social media from both ends of the marketing equation. Most of all I’d be looking for someone with accountability, someone in it to help my business succeed and not just fishing for a case study.

• Did you know there were 14,000 daily and weekly newspaper in the early 1900’s thanks to low cost printing presses?
• America’s first newspaper included a blank page to allow readers to write comments/notes before passing along the paper to a friend.
• Early bloggers such as Ben Franklin were known as pamphleteers.

I love to go grocery shopping with my wife. And by “grocery shopping” I mean hanging out in the magazine aisle for an hour thumbing though the magazines. I usually feel guilty after receiving the inevitable “this-isn’t-a-library” glare from the stock boys, but whatever.

Now I can peruse to my heart’s content at Alltop.com – a self-described “online magazine rack” of popular topics. Basically, it’s a directory site (like old school Yahoo in the mid-90’s) that has hundreds of subject categories and thousands of listings. Interested in cycling? Got it. Photoshop? Check. Shanghai? Yep! There’s even a category dedicated to Social Media. Not surprising, there are a TON of blogs included here, including this one.

So if you’re pressed for a one-stop-shop of Social Media coverage (or any of the other thousands of niches), I’d recommend putting AllTop on the top of your bookmark list. And if you’re of the sharing ilk, you can register with MyAlltop to create your own custom selected news to be shared with anyone else. You hand pick the sites that interest you and share them with your friends and associates. Here’s my example.

And if you want to stay up-to-date with new categories, be sure to follow Guy Kawaski on Twitter as he’s known to drop an update or two on occasion. OK, maybe more than one or two…