Increasing Scrutiny for Online Marketing

The National Advertising Review Council (NARC), a "coalition of advertising organizations" that recommends standards for industry self-regulation, issued its first rulings dealing with blog promotions. NARC faulted two companies for "posting 'reviews' of dietary supplements, but not disclosing that they actually own the products," or that the reviewers were paid. One company, Urban Nutrition, ran websites that "claimed to offer un-biased reviews of products," but really used paid reviewers to write favorably about the company's own products. NARC ruled that, in doing so, Urban Nutrition "was in violation of the FTC's Guides on Endorsements and Testimonials." Urban Nutrition agreed to add disclosures to its sites. The other company, Herbal Groups, ran a blog that pushed its dietary supplement, including via "testimonials" containing "incorrect information" and "dubious claims." The company agreed to take down the blog. The actions come as the U.S. Federal Trade Commission (FTC) updates its endorsement guidelines to include blogs. The FTC is considering requiring bloggers to disclose "not only when they are paid by a company, but also when they receive a free product," reports the New York Times -- a proposal that the Association of National Advertisers, American Association of Advertising Industries and Word of Mouth Marketing Association strongly oppose.