Many people start blogs as a way to make money. For some it’s a little extra cash which they hope will cover the cost to maintain a blog, whereas others are going all out and are making blogging a full time job.
And, as the popularity of blogs increases, so does the exposure they are getting.
In some cases, the exposure comes in the form of higher traffic numbers, increased comments, better earnings, and offers from advertisers to review and/or promote a product.
Unfortunately, as of December 1, 2009*, with those free offers comes a new ruling from the Federal Trade Commission (FTC) (a US based government agency whose duty is to protect consumers from fraud).
The hot topic in the last few days has been the release of the FTC announcement stating bloggers will have more responsibility when it comes to endorsing a product.
To quote a section of the article, it reads,
…The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service….
Needless to say confusion has arisen from this announcement, so Edward, of Edward Champion’s Reluctant Habits went to the source and then posted an excellent Interview with the FTC’s Richard Cleland
In part, the interview states,
In the case of books, Cleland saw no problem with a blogger receiving a book, provided there wasn’t a linked advertisement to buy the book and that the blogger did not keep the book after he had finished reviewing it. Keeping the book would, from Cleland’s standpoint, count as “compensation” and require a disclosure.
After reading the interview, it’s obvious there are still lots of scenarios that need to be considered, but in the meantime, bloggers who do product reviews need to be aware of the upcoming changes in the law.
Now that the FTC has its sights set on the activities of bloggers, the next watch dog could possibly be the IRS (Internal Revenue Service).
What’s a blogger to do?
- Don’t seek to make money with our blogs and stay away from product and/or book reviews
- Become vigilant with our record keeping via disclaimers, disclosures and documentation
After all, we never know when “big brother” will come a knocking.
If we’re showcasing books or writing reviews on products, do you think we should start looking at our blog as a business and documenting it as such?
Knowing you may have to disclose your affiliation with an advertiser and/or book author, will you continue to do reviews on your blog?
If you were audited by the IRS, could you show documentation for the income and expenses of your blog?
Let’s talk about this. Together we should be able to come up with great solutions.
The internet and Twitter is all abuzz with regard to the FTC Guidelines and Announcements. Here’s a small sampling of what’s currently out there:
- *FTC Guidelines for Endorsements An 81 page PDF
- Bloggers to be Fined Up to $11000 for Not Disclosing Payments by Vered at Momgrind
- More FTC news on Techmeme
- FTC says bloggers must disclose payments and freebies by Mark Ghosh on Weblog Tools Collection
- FTC to Fine Bloggers up to $11,000 for Not Disclosing Payments at Mashable
- FTC says bloggers must disclose payments and freebies when reviewing products or risk being fined $16,000 by Etan Horowitz on Etan on Tech