The Business of Blogging: What the Federal Trade Commision Has to Say About Blog Endorsements (Part 2)

The Federal Trade Commission (FTC) is an independent agency of the US government in charge of preventing business practices that are anti-competitive or deceptive or unfair to consumers; enhancing informed consumer choice and public understanding of the competitive process. The FTC says its mission is to accomplish the aforementioned without unduly burdening legitimate business activity.The FTC is in charge of protecting consumers from fraud, deception, and unfair business practices in the workplace. Think: online counterfeit sellers and the like.

 The FTC recognizes that bloggers that work directly with fashion retailers and brands refer a lot traffic to the retailer website which turn into sales. Social media sites like Instagram, Facebook, and Twitter enable bloggers to endorse and advertise brands and retailer products. "This is done through likes, comments, retweets, replies, brand mentions, shares, and increases in in-bound and out-bound links," WWD reports.

First, let's explain how shopping through social media works. The old school way was seeing an item on a celebrity or blogger and going to find it by yourself. But now Instagram is shoppable through LiketoKnow.It, a daughter company of RewardStyle, a Dallas, Texas based company that monetizes blogs. Instagram sends users an email with the shopping information of the items inside the Instagram photos they like. Users then sign up with Liketoknow.it in order to buy the item. Think bloggers like Sincerely Jules and celebrities like Lilly Ghalichi and Lauren Conrad. Sites like LTK include startups like Soldsie, Chirpify, and Hashbag.

racked.com via liketoknow.it

So what rules and regulations do the FTC have in place for the business of blogging? Well, in March 2013, the FTC published specific rules and regulations in .Com Disclosure, How to make Effective Disclosures in Digital Advertising.

• Endorsements and Advertisements
• Bloggers must make all online endorsement disclosures must be clear and conspicuous.
• considerations of "clear and conspicuous" include the placement of the disclosure and it's proximity to any claims, the prominence of the disclosure, whether the disclosure should be communicated repeatedly as consumers travel through the site; and whether there are audible and visual messages that will distract consumer's attention from the disclosure.

• Fraud and Deceit
• Advertising must be truthful and not misleading; must have evidence to back up their claims; and cannot be unfair. 

It is amazing to see the way that fashion increasingly evolves through technology. This concludes our series on the Business of Blogging.

Talk to us and let us know what you think on the business of blogging and the monetization of social media sites.