The FTC's Rebuke of a PR Agency

The Federal Trade Commission recently issued its first rebuke under new guidelines that prohibit "social media" and "word of mouth" marketers from passing themselves off as ordinary consumers touting a product and that require endorsers to make clear when they have financial connections to sellers. The FTC found that PR agency Reverb had engaged in this sort of "deceptive advertising" by having employees pose as ordinary citizens while posting game reviews online and not disclosing that the reviews came from paid employees working on behalf of the game developers.

"Word of Mouth" executive Ed Keller works through some of the ramifications of this decision in a thoughtful essay.

See Ed Keller, "FTC to Social Marketers: Keep It Real or We'll Take Action," MediaBizBloggers, September 1, 2010.