The FTC considers any endorsements or testimonials in social media writing to be deceptive advertising. The Federal Trade Commission has announced that starting December 1, 2009 all people who write web content must disclose any compensation they received.
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New FTC Rule Regarding Social Media Writing

Advertisers have found that having a blogger write about their product or service is a much more effective way to advertise than posting ads. Bloggers have found this to be a lucrative opportunity to get paid for writing. For example izea, a company that connects bloggers with marketing companies has set up service for twitter. How much a tweeter gets paid depends upon their number of followers, but on average companies are paying $29 per sponsored tweet.

But the Federal Trade Commission (FTC) considers this type of social media writing to be deceptive advertising. The Federal Trade Commission has announced that starting December 1, 2009 all people who write web content (web sites, blogs, facebook, twitter, etc.) must disclose any compensation they received (product, service, money, or any other form of compensation).

If you receive a free product or service from a company and you write a review of that product or service, you must disclose that your review is a paid endorsement. In the past, content that featured a consumer conveying their experience with a product or service was required to include the disclaimer "results not typical".

After December 1, 2009 such content must include the disclosure "this is a paid endorsement" or "this endorsement paid for by ___________". Failure to include this disclosure could result in fines of up to $11,000 per violation. You are not required to disclose the exact amount of the compensation.

If you purchase a product with your own money and write a review for which you do not get paid, no disclosure is necessary. What about a description of a product or service for which you are an affiliate? You don't actually get paid up front for writing a review or description of an affiliate product or service. You don't get paid until after a sign-up or purchase. However, I would still include a disclosure like "I am a ___________ affiliate".

Will these disclosures render all social media endorsements and testimonials useless? Well, including "this is a paid endorsement" at the end of an article kind of does cause the article to lose its credibility, unless you follow that disclosure with the statement "I affirm my review to be honest and accurate.", which kind of "disclaims" the disclaimer and returns credibility to the endorsement. However that's kind of difficult to do this in a 140 character tweet.

Click here FTC 16 CFR Part 255 "Guides Concerning the Use of Endorsements and Testimonials in Advertising" for complete information about the New FTC Rule.

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