To back away from that belief risks the end of our organization’s credible role as the trusted voice of the word of mouth marketing profession. The erosion of trust in the profession places all of WOMMA’s members at risk.

This is not about the disclosure issues. Disclosure is always mandatory and not up for debate. Even with disclosure, paying for word of mouth is unethical and illegal. WOMMA must continue to oppose it.

Key issues in paying for endorsements:

1. It is deceptive to hide paid advertising under the “WOM” label.

Marketing that is paid for is not WOM. It is the opposite of WOM — it is advertising.

Advertising is fine, as is accepting advertising revenue; however the advertising industry must continue to be regulated by all the existing rules of advertising. One of those most valued standards is the firm separation of editorial and advertising.

It would be deceptive to allow vendors to use the term “word of mouth marketing” to describe paid advertising disguised as editorial content, or to evade existing regulations on that advertising. The only reason to do so is to hide an advertising practice under the WOM ethical umbrella. If WOMMA allows this, it risks all WOM being discredited as a hidden form of shill adverting.

Allowing questionable paid advertising practices to hide behind the WOMMA Ethics Code destroys the meaning of honest WOM and promotes those who would use that label for non-ethical WOM practices. It also could set up WOMMA as a pariah in the mainstream marketing industry, as the place where shills go to gain credibility for practices not acceptable elsewhere.

2. This is about false endorsements.

It has always been illegal to use false endorsements in advertising and the practice has been banned by the FTC for decades.

When you pay someone to write a review of a product that they have never used, that endorsement is by definition false. There is no way to write an honest endorsement of a product you have never used.

This is why providing samples or review items to generate WOM is fundamentally different. The sample enables the advocate to form an honest opinion about the product. Paying for that opinion without providing the product is paying for false endorsements.

No respectable company would consider paying people to write false endorsements in their print or television ads (you’d get fired for doing so). Just because we are talking about a new medium does not make it any more ethical or legal.

If WOMMA permits paying for false endorsements, WOMMA would be openly advocating an illegal practice.

3. There is industry-wide consensus that this practice is not acceptable.

The vast majority of associations, companies, experts, consumer advocates and regulators have clearly stated that paying for word of mouth is unacceptable. A single WOMMA member promotes it.

It is the role of this association to set the industry standard, and the industry has clearly spoken: No one supports this practice who hasn’t been somehow paid to support it. Most established and trusted voices in this industry are violently opposed.

WOMMA’s role is to raise the standard, not lower it to include the most questionable practices. We were founded first and foremost to set the highest ethical standard in all of marketing. Now we risk selling out the very principles we exist to defend.

WOMMA cannot endorse or support this practice or any member that engages in it.

Andy Sernovitz
WOMMA Co-Founder, Founding CEO, and President Emeritus

The current (and very recent) EU’s regulation is built around the key issue of deception. It prohibits practices that lead consumers to be misled about products, services, brands.

I believe this is the right issue to address. If consumers are armed with factual information they are perfectly capable of assessing their personal view on the credibility of a review.

Although this appears to be tackled by ‘disclosure’, it is actually not completely. As pointed out by others, there is little talk about (disclosure of) the value of the compensation/incentive. Readers of blogs should not just be able to see that someone has received an incentive (cash or otherwise) but to what extent. The reason this is so important is that compensation that goes beyond what is needed to try out a product or service creates a very different situation from normal ‘product seeding’. When a consumer receives a free product valued at 30 euro and spends hours trying it out, sending in feedback, filling in polls and sharing samples with others, his/her opinion will be seen as more credible than that of the same consumer or blogger that just received the iPhone 3Gs. At Buzzer, we decided not to give products/services (we never give cash) to consumers over a certain value to prevent this from happening. If a product has a greater value, the Buzzers don’t get to keep the product after trial unless they pay for it. Other agencies are now starting to follow our example. My point here is that cash/non-cash is not the issue, but the value is.

Getting back to the question raised, this goes to the quality of the disclosure. And I believe that is the real issue. Cash or non-cash, people need to be in the ‘now’ about the compensation/factors that might shed light on the credibility of the reviewer. As Sernovitz discussed some time ago in his blog (it was also raised in one of the reactions here), it is very difficult to guarantee that a disclosure travels with the content/review. So where does this leave us ?

The only reason I can see to make a distinction between cash and non-cash is whether cash-compensation is more likely to lead readers to be misled. And you could argue that this ia the case. If a disclosure about a non-cash compensation/value received does not travel with a review when copied or is simply not mentioned, people can assume in the case of a blogger that he/she received the product for free. And decide what this does to the credibility of the review. If someone is paid to do a review and this is not disclosed or the disclosure is lost somewhere a reader is not likely to assume that the reviewer was paid to do this. And that makes the cash-compensation more prone to people getting misled.

I agree with many people reacting that the question raised is not the crucial one. The crucial one is how we can prevent consumers from being misled. And thus I would argue strongly to focus the discussion on the quality of disclosure. If this cannot be guaranteed, a distinction between cash and non-cash might do something good. But it is a suboptimal ‘workaround’ to fix this problem.

– We have used blogging to create interest in a particular topic with full disclosure of who paid to set up the blog, who was paying the editor/writer, and what the terms of reference were.

Be transparent on not deceptive.

Many corporations used paid endorsements across all media. I assume that those watching the TV ad, infomercial, radio spot, or see the print ad are fully aware that people are being paid to do and say what the do.

The question for blogging and online due to its ability to operate less transparent is “are the consumers of the media message aware that it’s paid advertising or endorsement?

If so, then fair game. If not, then we need to address this.

——————————
Example #1
http://immunityhealthnews.com/blogs/about-2
——————————

About
Welcome to the Immunity Health News web log – devoted to gathering and sharing news and information about preventative health care and the human immune system.

My name is Mark. As the writer, editor and voice of this blog, I am focused on providing you with a wide range of content that relates to personal health and wellness.

If it has to do with staying healthy and what is on the Internet, I’ll remain as objective as possible and link to it so you may make your own decisions. (Although I may have to add a splash of editorial witticism when appropriate.)

This site is sponsored by Rhino Marketing Inc. an e-marketing services company. While working with a client in the immune space, they realized that there was a need for a blog that looked specifically and objectively at this area of the health industry. This is where I come in. While I am paid through Rhino Marketing, I have been given the responsibility and authority to develop and maintain an editorial content-focused blog that provides relevant, interesting and informative news relevant to health and wellness. The purpose of this blog is not to unfairly promote specific products or companies; it is to provide you with objective information.

I am always on the lookout for new information to help us remain healthy and active. If you have information to share, please post it on the blog as well. We want to encourage interactive conversation about everyone’s health and wellness here!

Enjoy and stay healthy!

——————————
Example #2

http://bc-election.com
——————————

About
“The most erroneous stories are those we think we know best, and therefore never scrutinize or question.” – Stephen Jay Gould.
Welcome to BC Election.com.

We’re a place for discussion. We believe when people discuss the issues of the day in an open and fact-based way, they will make better decisions.

BC Election.com is about information and discussion in an open, interactive forum. Democracies are about all of us; the people. We elect our politicians to participate in government on our behalf; but ultimately we are the government.

The electoral process works best as a two-way dialogue between citizens and those who wish to represent them. This is a place to have that dialogue. We are gathering opinion and facilitating discussion between Tri-City constituents and their BC Liberal candidates for the upcoming May 12 Provincial Election.

If there are issues that you feel strongly about; tell your candidates.
If you’re wondering what your fellow residents are thinking; ask them.
If you have strong opinions you’d like to share; offer them.

And whether you agree or disagree: please participate!

Authorized By Jim Pipe, Financial Agent BC Liberal Party. Tel: 604.606.6000, 1.800.567.2257 – Copyright © 2009 BC Election: Coquitlam / Tri-Cities

– We have used blogging to create interest in a particular topic with full disclosure of who paid to set up the blog, who was paying the editor/writer, and what the terms of reference were.

Be transparent on not deceptive.

Many corporations used paid endorsements across all media. I assume that those watching the TV ad, infomercial, radio spot, or see the print ad are fully aware that people are being paid to do and say what the do.

The question for blogging and online due to its ability to operate less transparent is “are the consumers of the media message aware that it’s paid advertising or endorsement?

If so, then fair game. If not, then we need to address this.

———————————————
Example #1
http://immunityhealthnews.com/blogs/about-2
———————————————
About

Welcome to the Immunity Health News web log – devoted to gathering and sharing news and information about preventative health care and the human immune system.

My name is Mark. As the writer, editor and voice of this blog, I am focused on providing you with a wide range of content that relates to personal health and wellness.

If it has to do with staying healthy and what is on the Internet, I’ll remain as objective as possible and link to it so you may make your own decisions. (Although I may have to add a splash of editorial witticism when appropriate.)

This site is sponsored by Rhino Marketing Inc. an e-marketing services company. While working with a client in the immune space, they realized that there was a need for a blog that looked specifically and objectively at this area of the health industry. This is where I come in. While I am paid through Rhino Marketing, I have been given the responsibility and authority to develop and maintain an editorial content-focused blog that provides relevant, interesting and informative news relevant to health and wellness.

The purpose of this blog is not to unfairly promote specific products or companies; it is to provide you with objective information.
I am always on the lookout for new information to help us remain healthy and active. If you have information to share, please post it on the blog as well. We want to encourage interactive conversation about everyone’s health and wellness here!
Enjoy and stay healthy!

———————————————
Example #2

http://bc-election.com
———————————————

About

“The most erroneous stories are those we think we know best, and therefore never scrutinize or question.” – Stephen Jay Gould.
Welcome to BC Election.com.
We’re a place for discussion. We believe when people discuss the issues of the day in an open and fact-based way, they will make better decisions.

BC Election.com is about information and discussion in an open, interactive forum. Democracies are about all of us; the people. We elect our politicians to participate in government on our behalf; but ultimately we are the government.

The electoral process works best as a two-way dialogue between citizens and those who wish to represent them. This is a place to have that dialogue. We are gathering opinion and facilitating discussion between Tri-City constituents and their BC Liberal candidates for the upcoming May 12 Provincial Election.

If there are issues that you feel strongly about; tell your candidates.
If you’re wondering what your fellow residents are thinking; ask them.
If you have strong opinions you’d like to share; offer them.

And whether you agree or disagree: please participate!

Authorized By Jim Pipe, Financial Agent BC Liberal Party. Tel: 604.606.6000, 1.800.567.2257 – Copyright © 2009 BC Election: Coquitlam / Tri-Cities

The definition of value is key to solve this dilemma. We do not endorse practices where bloggers or people at large are paid cash to review or recommend a brand/product. Instead, we usually give them samples/trials/low-cost products for review, ensuring they are free to give their real opinion about it – be it good or bad.

In this sense, we follow a code common at journalism – low-cost gifts are acceptable, and they aren’t, in any way, a form of payment for a service. As any PR agency, we try to make it easier for the opinion leader to experiment the product/branding, so they can have an opinion about it.

In our economic reality, it is okay to give a book, a DVD or a movie/concert ticket, but it doesn’t make sense to give a car, a long trip or a TV set for an opinion leader. In this sense, giving large-value goods or money have the same impact on disclosure.

Another point worth of attention is the difference between probloggers and ordinary bloggers. The first group have their blogs as their main revenue source, and are not a “common person”, but professional media. They are “one-man newspapers” and, in this sense, our relationship with them should follow traditional brands-agency-media vehicles logic. They are not “people with blogs”, but small, long-tail media operations.

It is acceptable to pay in cash for ads (traditional banners or innovative formats) in professional blogs, as well as paying cash for their services (such as writing posts in the Brand’s blog, not in their personal blogs) in the same way this is acceptable in magazines or TV. But it is unacceptable to pay in cash for a favorable product review.

Since the Ethics Code is a guide and not a Constitution, there is room for the use of common sense and contextualization. So, with think we should leave it as it now stands.

Deborah :
I do not believe citizen journalists should be paid cash for promoting brands/products/businesses.

….without disclosing that payment has been received

Additional sponsored content examples include, sponsored video content such as Rhett and Link (Taco Bell) and Fred Figglehorn (ZipIt); and sponsored twitter content such as SavvyAuntie and Perez Hilton.

Suggesting that content creators should only be paid in tacos, zipits or TV shows they get for free anyway just doesn’t seem to grasp the spectrum of legitimate, cash-based sponsored content that exists today and, with Honesty ROI, should be a part of any WOMM toolbox in the future.

Context and Disclosure: Keys to Success in Compensating Bloggers
http://www.blogher.com/context-and-disclosure-keys-success-compensating-bloggers
All of these models may be different, but we think it is critical for publishers and advertisers to have strong (and completely transparent) policies about how they engage with one another.

For BlogHer, our policies focus on three things:
1. Disclosure
2. Clear physical separation of editorial and advertorial
3. Context

My partner, Lisa Stone, outlined what are policies are, how we execute them, and why we set them, in more detail, in this post:

The elephant in the room: How BlogHer is cracking the code on editorial content and paid advertising
http://www.blogher.com/baby-mammoths-and-baby-industry-how-blogher-separates-editorial-advertising

The goal, in the end, is to provide value to the advertiser, while safeguarding the consumer and the blogger-reader relationship. We think it can be done.

But I am a bit amazed about 2 things :

////// First, it is insane, how US centric you really are!
Sorry but the world is not contained between NY & the Silicon Valley. Despite being a member of the WOMMA, we are really surprised to see that Europe or Asia is nearly totally out of your discussions… FTC is definitely an important matter but you might want to have a look at the EU Commission & regulation since it will impact not less than 27 countries & 500 million people! China alone counts more than 40 million bloggers too as an example.

Some advertisers, agencies and WOM practitioners are already pretty advanced there even if by not always mastering English they may not appear at all on your map and in your discussions. At Vanksen (www.culture-buzz.com : digital & social media marketing agency) & BuzzParadise (www.buzzparadise.com : bloggers outreach platform in 12 countries) we have launched more than 200 buzz, viral and WOM campaigns in the past 6 years in more than 12 countries and I know many EU or Asian competitors /counterparts that are doing extremely fine in the WOM industry at large too (Trnd, Buzzman, Heaven, Goviral, BlogBang, Buzzer.nl, ebuzzing, Streetcom, Azooma in Korea, Unrulymedia,…). Each developed a different model (UGC, viral video, sponsored posts, online communities, social media agency,…).

In these countries, many social media platforms are already offering & mixing PR2.0 (no payment but product seeding & event invitation) + viral content seeding (bloggers are paid for performance for videos, gadgets distribution via clearly labeled sponsored content/player) + sponsored posts (with disclosure & analytics tags). Most of them have already adopted full disclosure since day one and bloggers should off course to be totally free to write about it or not, positively or not… and payment vs gift is no real discussion anymore… (value is value indeed). Ironically payment is a good way to request bloggers to insert a disclosure tag 100% of the times and not only most of the time (with PR2.0 campaign where you don’t have any way to force them to do so (even if most of them do it with pleasure in order to be transparent with their readership).

Anyway really influential bloggers are not going to damage their brand image or reputation for a few $ or a free phone… If ever they started writing bullshit, their audience would quickly react through comments or by avoiding them, therefore damaging their traffic and finally their audience i.e. a big part of their influence. On the other hand, the biggest bloggers have invested a lot of times and energy in creating a real media and I don’t know what rights we would have to forbid them to monetize their audience or influence (it just have to be done in a smart & respectful way).

////// Disclosure is definitely a required step to avoid deceiving consumers… but how come that everyone is not fighting for traditional media to adopt disclosure too.

As a marketing professional I have a pretty fair idea of the outrageous gifts (ok it is not money, but some of these gifts and travels may reach more than 5000$ in some cases!) that offline press & TV journalists are offered year along. And I have never ever heard anyone talking about disclosure to avoid deceiving their audience… I am 200% for disclosure but I really think that WOMMA should be asking FTC to request the same from the other media to be fair… Consumers trust is as important whether you are a tv audience or a wom audience.

It is great to see that you are very transparent in discussing this important subject… but I am not sure that you don’t miss a part of the equation (geographically or through industries). And don’t forget that bloggers are not our slaves (hopefully) nor our employee. They are as many different types of them as types of human being. “bloggers” in general doesn’t mean anything. One single rule will probably fail especially since they will each be free to choose their own path… good or evil. We should just make sure we try to fight towards the good direction… and stay humble.

But I am a bit amazed about 2 things :

• First, it is insane, how US centric you really are at WOMMA!
Sorry but the world is not contained between NY & the Silicon Valley. Despite being a member of the WOMMA, we are really surprised to see that Europe or Asia is nearly totally out of your discussions… FTC is definitely an important matter but you might want to have a look at the EU Commission & regulation since it will impact not less than 27 countries & 500 million people! China alone counts more than 40 million bloggers too as an example.

Some advertisers, agencies and WOM practitioners are already pretty advanced there even if by not always mastering English they may not appear at all on your map and in your discussions. At Vanksen (www.culture-buzz.com : digital & social media marketing agency) & BuzzParadise (www.buzzparadise.com : bloggers outreach platform in 12 countries) we have launched more than 200 buzz, viral and WOM campaigns in the past 6 years in more than 12 countries and I know many EU or Asian competitors /counterparts that are doing extremely fine in the WOM industry at large too (Trnd, Buzzman, Heaven, Goviral, BlogBang, Buzzer.nl, ebuzzing, Streetcom, Azooma in Korea, Unrulymedia,…). Each developed a different model (UGC, viral video, sponsored posts, online communities, social media agency,…).

In these countries, many social media platforms are already offering & mixing PR2.0 (no payment but product seeding & event invitation) + viral content seeding (bloggers are paid for performance for videos, gadgets distribution via clearly labeled sponsored content/player) + sponsored posts (with disclosure & analytics tags). Most of them have already adopted full disclosure since day one and bloggers should off course to be totally free to write about it or not, positively or not… and payment vs gift is no real discussion anymore… (value is value indeed).

Ironically payment is a good way to request bloggers to insert a disclosure tag 100% of the times and not only most of the time (with PR2.0 campaign where you don’t have any way to force them to do so (even if most of them do it with pleasure in order to be transparent with their readership).

Anyway really influential bloggers are not going to damage their brand image or reputation for a few $ or a free phone… If ever they started writing bullshit, their audience would quickly react through comments or by avoiding them, therefore damaging their traffic and finally their audience i.e. a big part of their influence. On the other hand, the biggest bloggers have invested a lot of times and energy in creating a real media and I don’t know what rights we would have to forbid them to monetize their audience or influence (it just have to be done in a smart & respectful way).

• Disclosure is definitely a required step to avoid deceiving consumers… but how come that everyone is not fighting for traditional media to adopt disclosure too.

As a marketing professional I have a pretty fair idea of the outrageous gifts (ok it is not money, but some of these gifts and travels may reach more than 5000$ in some cases!) that offline press & TV journalists are offered year along. And I have never ever heard anyone talking about disclosure to avoid deceiving their audience… I am 200% for disclosure but I really think that WOMMA should be asking FTC to request the same from the other media to be fair… Consumers trust is as important whether you are a tv audience or a wom audience.

It is great to see that you are very transparent in discussing this important subject… but I am not sure that you don’t miss a part of the equation (geographically or through industries). And don’t forget that bloggers are not our slaves (hopefully) nor our employee. They are as many different types of them as types of human being. “bloggers” in general doesn’t mean anything. One single rule will probably fail especially since they will each be free to choose their own path… good or evil. We should just make sure we try to fight towards the good direction… and stay humble.

Emmanuel VIVIER
CEO & Founder
Vanksen (Buzz & Communication Agency : http://www.culture-buzz.com)
&
BuzzParadise.com (Connecting Brands & Bloggers Worldwide : http://www.buzzparadise.com)

Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge.”

Whereas hard-money compensation has been disclosed for some time, soft-money compensation (like that free video game system) is ….

Sponsored conversations are not going away. If WOMMA tries to exclude cash other forms of compensation will just take its place. I would rather have transactions done cleanly and transparently in cash than through some reverse engineered point system or incentive program.

I realize the issue is a lot more complicated because not all bloggers are journalists. Cyberjournalist’s ‘Bloggers’ Code of Ethics’ addresses this issue but still stresses the need to be honest and fair, to minimize harm, and to be accountable to maintain readers’ trust. They say that, “Integrity is the cornerstone of credibility. Bloggers who adopt this code of principles and these standards of practice not only practice ethical publishing, but convey to their readers that they can be trusted.” (http://www.cyberjournalist.net/news/000215.php)

The real issue here is one of trust. As a reader, I know that bloggers will have certain biases. What I want to know is if their opinions are formed independently or if they may have been influenced by material transactions with advertisers. It’s okay that Nike gives you a $200 pair of shoes to review, but I want to know they gave them to you. Just say.’ Nike gave me these shoes to review … here’s what I think.’
If you receive additional payment to write a favorable editorial, then that’s a paid endorsement. As a reader, I want to know when the editorial shifts from independent review to paid endorsement.

It’s a complex issue and there is no easy answer, but I hope the WOMMA Ethics Code retains the Honesty ROI, which reflects the FTC Guide (Sec 255.5 http://www.ftc.gov/bcp/guides/endorse.htm). This protects not only consumers but the effectiveness of WOMM as well.

I believe the title of this post doesn’t accurately reflect the true decision at hand. Under the current WOMMA Code marketers can provide products, services, giftcards, etc (VALUE) to bloggers so long as they disclose and are permitted to be honest in their opinion. Many WOMMA members participate in this practice and it is very common in the industry.

For some reason there is a specific carve out in the WOMMA Ethics Code for cash as a form of transferable value. So it is fine to provide a blogger with a $500 TV, but not $500. This clause unfairly restricts trade within the industry and clearly violates antitrust laws.

I believe everyone in this comment stream so far believes that value is value, no matter the form. Certainly the FTC and IRS make no distinction between the two. We shouldn’t be talking about what form of value is exchanged, rather our discussions should focus on the framework of the exchange itself.

Disclosure is our biggest challenge as an industry. I have put forth a solution that I believe could work.

http://izea.com/universal-disclosure/

What is a sponsored conversation, or pay for blogging but an endorsement? They are one in the same.

What is payment in the form of product, or service, or cash but compensation? They are one in the same.

How are the following different?
– Kobe is paid to endorse a Coca Cola.
– Kobe receives a pair of Nikes.
– Blogger is paid to endorse a product.
– Blogger receives a pair of shoes.

It’s all the same. It’s all compensation. (Just ask the IRS)

Are you really going to tell me it is okay for Kobe to receive a pair of $200 Nikes but it’s not okay for Blogger to receive $10? (btw – we’re all consumers, let’s not be condescending to people who aren’t earning the same $ as Kobe)

Let’s not let special interests get in the way of the facts. Let’s not restrain trade.

Disclosure? Yes, especially if a reasonable person could have doubt. Restrain trade? No.