The FTC is proposing changes to its rules regarding product endorsements and product reviews that could affect the scrapbook market in major ways, depending on the agency’s definitions of key terms in the rules, and enforcement interpretation of them.
Essentially, what the FTC wants to do is force anyone writing a product review or endorsement on a blog to have to disclose if they have any financial ties to the company – including if they received the product in question for free. [The rules changes are more involved and far-reaching than that, but that is the essence of the ones that will most affect the scrapbook industry.]
As a consumer, this sounds great – you want to know if the person who wrote the review or endorsement you are reading may have a hidden bias, right? Of course, that sounds great, and is simply an enforcement of ethics that are in force on most respectable sites anyway.
But let’s stop for a minute and think about the reality of day-to-day life (and work) for people in the scrapbook industry.
Lots of free product is handed out in this industry. It is one of the primary marketing tools used by companies who want to get their products seen and talked about – provide free products to key scrapbookers in the hopes that they will use them and the products will get seen on their highly trafficed blogs or in magazines. Giving free products to consumers at events like CKU and through giveaways on company websites is also a widely used marketing tool.
Under the proposed FTC regulation, having received free product from a company qualifies as having a “commercial relationship” with them. This has to be disclosed alongside anything that the FTC deems to be a product review or endorsement where it wouldn’t be obvious to the public that the person was a paid endorser.
The key here is what the FTC considers to be an endorsement. Is a well-known scrapbooker using a product in a layout on their blog, or on an example in a class they are teaching, an “endorsement” of that product? If the FTC thinks it is, the implications for the scrapbook industry (and the people who work in it) are a major headache.
It is possible that the FTC definition of “endorsement” could include that when a scrapbooker with a highly-trafficed blog, such as Ali Edwards or Stephanie Howell, posts a layout there, they are “endorsing” every product they used on that layout, simply by their use of it in a public forum and their high profile. If that were held to be the case, then those scrapbookers would potentially have to know the origin of every item on that layout and whether they thus have a “commercial relationship” with that company that they have to disclose alongside that layout.
Can you imagine having to know how you came to have each of literally thousands of sheets of paper, and drawers and shelves full of embellishments? And where do you draw the line on what constitutes what you got for free? If you got the die cut tool for free but paid for the die design that is visible on the layout and appears on the supply list…do you still have to declare that as a “commercial relationship”?
And what about applying the rules to consumers? What if a scrapbooker gets a sticker for free from a giveaway on a company website that they win, and then posts a layout they made with it in an online gallery? Is that a “commercial relationship” and an “endorsement”?
Just thinking about all of the possible interpretations of this makes my head hurt about the potential complications and the limitations it could bring to scrapbook marketing. And apparently it made the PRSA’s (Public Relations Society of America) head hurt too, because they filed a comment with the FTC about the proposed regulation indicating that it was too vague and open to interpretation.
The period for filing comments regarding the proposed rules to the FTC has now passed, unfortunately. A final version of the proposed rules are expected later this year.