KidLitCon-badgeIn a coup of epic proportions Pam, of MotherReader fame and conference planner extraordinaire, was able to finagle the presence of a representative from the Federal Trade Commission to address the continued and growing concern the book blogging community has about the recent release of the now famous disclosure guidelines.  I’m going to do my best to summarize what I took away from what was said but will continue to add links to this post from other attendees as they pop up because others may have walked away with more information. So definitely check back every so often this week for updates.

Associate Director for Advertising Practices Mary Engle addressed participants at The 2009 Kidlitosphere Conference for about an hour yesterday and clarified some of the issues we’ve all seen floating around the blogosphere the past week or so.  She started out by stating that the Division’s primary focus is on consumer protection, as a result they publish guidelines to advise on best practices and acceptable behavior for doing business in advertising.  Ms. Engle made a particular point of saying that these are *guidelines* and are not the *rule of law*.  I took this to mean that they are not enforceable by the FTC proper.

Independent Reviewers vs. Marketing Programs
Engle went on to make a distinction between independent reviewers (that would be us book bloggers y’all) and participants of marketing programs.  She admitted that the FTC probably could have done a better job of drawing this distinction in the guidelines but hoped further clarification would help alleviate concern on our part.  By definition, marketing programs are larger in scale and designed specifically with the intent of some mutual benefit. An example given of this scenario was “pay for tweet” programs where people are given something (product, cash, etc) in return for tweeting about a it.  Conversely, if you are an independent reviewer are not working directly for the advertiser.

How does this affect disclosure?  Easy – if you are working with a marketing program you must disclose that connection.  If you are an independent reviewer you do not.  This is an important distinction because it appeared to me that she was saying the guidelines are centralizing focus on these big guys as compared to the little guys.  In fact, to make super double special sure I interpreted what she was saying properly I flat out asked her in the Q/A “As a person who is independent of a publisher but who gets books and posts reviews, do I have to disclose that connection?”

The answer to this was NO we are not required to disclose.

Thus I walked away from that part of the presentation understanding that the gist of it all is that an independent review (such as a book bloggers) is NOT an endorsement of a product. I’ll add, however, that I intend to continue to disclose regardless as I think it’s a great way to build trust with readers.

Material Connections, Compensation and Income
In an effort to debunk the concern that material connections (ie: free books) would become taxable income Ms. Engle clearly stated that the FTC has no jurisdiction over issues pertaining to taxable income.  This would be the responsibility of IRS and as such there is nothing in these guidelines related to that issue.  She further explained that in crafting the guidelines the FTC was looking to use language that generalized the benefits that endorsers may garner without using the word “paid” and the result was “compensation” as it allowed for inclusion of money, services and products being given. They did not foresee that using this language would draw the subsequent perception that there would be a relationship between the guidelines and taxable income.

Predominance of Publishers
Engle did say that if a book blogger appeared to be reviewing books primarily from a one certain publisher (ie: a person reviews only books from say Random House and no one else) the potential to be considered an advertiser or endorser is there. That would give the FTC more leverage if a complaint were to be lodged against a particular blog or publisher.

Affiliate Programs
An area where book bloggers DO need to pay attention, be careful and disclose is participation in affiliate programs (ie: Amazon, etc).  In this case the blogger is under the umbrella of a larger marketing/sales program and as such would be required to disclose this relationship. Readers of your blog should understand that you are making money off of their purchase. It doesn’t matter how large or small that amount is it only matters that you are.

Placement of Disclosure
Also important was Ms. Engle’s comment on where disclosure of relationships should be placed.  The FTC expects that all disclosures be “clear and prominent” meaning within each post in which an endorsement or material relationship is prevalent.  It is not enough to post a blanket disclosure policy or comments regarding disclosure in sidebar, about, policy or contact sections.

Complaints and Enforcement
If a complaint is made to the FTC any resulting investigation would be of the larger marketing company or advertiser not the endorser. The onus is on them to educate members of their programs on how to properly disclose any relationships.  This does not, however, remove entirely the obligation on the part of the endorser to make a disclosure. Having said that she was clear on the fact that the FTC does not have the manpower nor the desire to search the blogosphere for offenders.

Providing Feedback
The FTC acknowledges that there are areas of grey where further interpretation needs to be made and elements of these guidelines clarified. In an effort to do so the agency is currently working on some Frequently Asked Questions (FAQ’s) that they intend to publish in the coming months.  As part of this effort they have established an email where concerned parties can address questions — endorsement@ftc.gov.  Engle emphasized that this email is being set up for the express purpose of collecting questions and requests for clarification via the FAQ documentation and that individual and direct responses should not be expected.

What Others Are Saying
Jennifer Hubbard – FTC Guides Update
A Chair, A Fireplace & A Tea Cozy – FTC Rules, Regs and Guides from Kidlitcon 09
Dog Eared and Well Read – Kidlitcon ’09 FTC and Bloggers
Charlotte’s Library – The Federal Trade Commission and Book Bloggers Update from Kidlitcon 09