Marketers May Face ‘Buzz Disclosure’ Oxymoron

Ad industry attorneys have come to view buzz marketing as a likely area of regulatory involvement and the enforcement of disclosure requirements, especially if people are compensated to participate in buzz programs by marketers and agencies, reports AdAge (via MarketingVOX). It writes that BzzAgent, one of the better-known buzz marketing agencies, changed its policies to comply with advertising regulations and now requires its consumer brand agents to identify themselves as working for marketers.

Though there is no legal precedent regarding the issue, there are Federal Trade Commission ad guidelines that would likely apply: “If the motivation for [an endorser] is to profit from his or her endorsement, that connection probably needs to be disclosed,” Douglas Wood, chairman of advertising and marketing law at Reed Smith is quoted as saying. “But since disclosure undermines the value of buzz marketing, advertisers are in a Catch-22.”

“The real question is whether consumers are being misled someway,” said Rich Cleland, an assistant director of advertising practices for the FTC. The Word of Mouth Marketing Association has posted a working ethics code on its site stating it complies with the FTC regulations on endorsements.