FTC To Investigate 'Viral Marketing' Practices

mcflaherty writes "The Federal Trade Commission has stated that it is going to investigate the use of 'Viral Marketing' by corporations. This is the type of advertising that seeks to start a word of mouth campaign for the product via consumers themselves. Previously, consumers themselves set the buzz. But lately advertisement firms are stepping up to the plate themselves, seeding the market with buzz that looks independent of the company, but is in fact funded by them. The crew at Penny Arcade contend that corporate generated buzz is not Viral Marketing, and perhaps Guerrilla Marketing would be a more apt term. Either way, it appears to be a profitable advertising model."

Comments

Astroturfing

[duerra]

It already has a name. It's called Astroturfing.

Now we need to come up with a term for what will eventually prove to be its opposite. Corporate sabotage that seeks to inspire negative propoganda for another company. If Sony hadn't been repeatedly shooting themselves in the foot with a sawed-off 12 gauge lately and inspiring all their own negative publicity, I'd almost suspect that of their vomit-inducing attempt at creating buzz for the PSP.

About Time

[Slipgrid]

60 Minutes covered this about two years ago. It's a good segment if you can find the video.

Re:How low can they go?

[Possibly Malignant]

"if X says this and X is a nice guy, then X must be true"

There's a syntax error in your formula.

The Sony Strain...

[__aaclcg7560]

Does this mean that Sony will get a marketing flu shot?

Sometimes it Backfires

[Toreo asesino]

One such example was when Virgin attempted to get Internet humour website B3ta.com to come up with something for their "say yes" campaign. Virgin got rather offended in fact over what was being produced and pulled out. It did however generate a storm of publicity (The Inq. wasn't the only site to report this cock-up), so it was successful in some respects.

Ha, I'm immune

[StikyPad]

since a) I don't talk to anybody, and b) even if I did, I wouldn't trust what they said.

Sigh.

Viral

[Anonymous Coward]

Viral as i've always played it is using something like...

Come to my business..

We take a photo of you enjoying yourself.. (with your permission)

We make the photo available to you online...

We allow you to send the photo to your friends (or rather links to the photo).. ... you get the idea...

A business "planting buzz" is just that.. it's a gorilla technique but if it's paid for, it's paid for, and that isn't speech it is commercial speech.. I would like those two to be treated the same but the law doesn't see it that way..

Commercial speech that is misleading is usually called fraud.. The particular fraud would seem with "good buzz" to be aimed at lowering the transaction cost, the risk that some new product or service sucks... sucking in consumers to making purchases based on false endorcements and recommendations..

OT: Community redemption.

[Spaceman40]

[Is] [Slashdot] trying to [redeem] itself after being conned into an instance of viral marketing?

No. Let me remind you how our system works:
1. Person finds something they think is cool.
2. Person submits link and story to Slashdot.
3. Slashdot editors do a quick read to see if it's not blatantly inaccurate or uninteresting.
4. Editors put the story up.
5. Readers check the story out.
5. a. At least one reader looks into (or already knows) the background of the article.
5. b. At least one reader looks into (or already knows about) the subject of the article.
5. c. At least one reader looks into (or has already speculated about) the ramifications of the article.
6. We discuss.

That's the point: the community decision for the article you linked was that it was a guerilla campaign. When I read that article, I didn't realize it was such, I assumed the same as the editors. Fortunately, there's a large community here, several of which commented that not all was as it seemed, and I was enlightened.

Yay for community discussion. Articles aren't generally statements that the community makes, they're statements that the community responds to. That's why us old timers (and I'm a young'un, at that) are still here.

Re:How low can they go?

[troll -1]

Free speech is free speech. Just be happy they aren't transmitting commercials into your dreams (yet).

This is considered commercia speech and doesn't have the same First Amendment protections as other speech.

Re:How low can they go?

[dgatwood]

Precisely. The word you're looking for is "dramatizations". And you are required by law to disclose when this occurs.

I cite 45 FR 3872, section 255.2:

(b) Advertisements presenting endorsements by what are represented, directly or by implication, to be ``actual consumers'' should utilize actual consumers, in both the audio and video or clearly and conspicuously disclose that the persons in such advertisements are not actual consumers of the advertised product.

And section 255.5

When there exists a connection between the endorser and the seller of the advertised product which might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience) such connection must be fully disclosed.

Now, admittedly, this is from an FTC guide and not directly from the relevant body of law. You'd have to ask somebody more familiar with the details of advertising law to tell you which specific sections of code and/or relevant case law that these opinions are derived from. That said, the FTC is well within their rights to investigate this and prosecute any ad agency proven to use guerilla marketing tactics. They are clearly examples of false advertising, and are thus NOT ethical and NOT legal.

Re:How low can they go?

[IgLou]

Nonsense. I'm just as entitled to say whatever I want whether I'm speaking for myself or my employer. If I lie, and it causes you some harm, then there's a whole body of tort law to deal with it. You missed what I'm trying to say. I'm not talking about what you may or may not say in a public blog about how things are going in your company or about what you say at a private party. I'm not saying I want people to always tell the truth. DUH, what you do privately of your own will is your business and I don't give a crap. But, if your company pays you do that by going into non-business situations and engage in some activity that promotes the company's, it's products or services then it's an advertisement. We can come up with all types of things to blur lines to work around the semantics (oh but what about the sales guy!). I'll still maintain that any person paid directly or indirectly or contractually held to say certain things for or about a company for the purpose of promoting that company in a context or medium that is not designated for the purpose of advertisement or sales. You could tell everyone "research it" or "file a lawsuit" but these things simply aren't practical. Once something is posted on the net it gets reposted, copy-pasted, forwarded, ad infinitum. To this day I still have people forwarding me that stupid Hoaxes that have been debunked long ago and take a look at the number of duplicate videos on youtube.

Let's recap. You a person, feel free to speak, write, blog as you will; I will defend that right to free speech. A company on the other hand, when it communicates is commercial speech and should be identified as such when it could be misconstruted as something that's not commercial speech or a press release, like a viral video. A persons rights are sacrement and businesses rights are whatever the public feels is appropriate for what the public needs at that time. If we (the public) say we need to regulate how a company conducts it's outgoing communications then it should get regulated by law. No changes to or amendments to presonal rights necessary.