Should social media be regulated?
A colleague shared with me the other day the news that the Federal Trade Commission may regulate viral marketing and social media. It sounds ominous, but what's really at play is the fact that the FTC is updating its guidelines for the new era of marketing. It only took them 30 years to do so (guess they didn't think Web 1.0 was significant enough).
The nut of the proposal is that bloggers or others that are paid to endorse or write a review of a product or service on the Web are required to disclose that fact. If not, they'll be held liable along with the company, following similar rules that already exist for traditional advertising and marketing. I agree with the legal counsel for the American Association of Advertising Agencies (the 4A), Adonis Hoffman, that there should not be an overreaction to this.
It's interesting that the notice from the FTC first came out two weeks ago, but the discussion on it really stoked up yesterday because of a Fox News report, which took a distorted view on it -- namely that the government is going after Mommy bloggers.
The important thing is that this won't stop people from discussing their experiences and sharing opinions -- both good and bad -- about a company's product or service. The unpaid endorsements or criticisms always carry the most influence and it's a slippery slope when companies try to control them by generating paid testimonials. As more and more consumers and buyers turn to their peers for information and opinion, it should be clear to them as to whether that opinion is genuine or not. The real power of word-of-mouth marketing lies in the trust it engenders in the minds of consumers. As hard as it will be for the FTC to enforce such regulations, it will help preserve that trust, and I agree with Jim Nail of TNS Media Intelligence, that this is a good thing. As he said in the Ad Age article, "If people start disbelieving word-of-mouth marketing as much as they disbelieve advertising, we are in deep trouble."
The other thing to understand from this is that it is yet another reason that social media needs to be approached with a clear strategy and management approach in mind.
What side of this issue do you fall on this?