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FTC Ruling on Blogger Disclosure is OK October 8, 2009

Posted by paulrickett in Social Media, Wine.
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1 comment so far

The US Federal Trade Commission has introduced new guidelines on what bloggers must disclose about their relationship with producers of the products they talk about. The Guide can be read in its entirety here http://www.ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf.

I’ve read through the document as a layman and found it relatively clear about what does apply to blogging and what doesn’t. Works for me. As of December 1st the FTC can levy fines of up to US$11,000 for non-disclosure so there is a real potential cost for non-disclosure.

There has been a lot of moaning within the twitter wine community about this. Shock and horror would be a more appropriate description. Not so much over the fact that there is a requirement to disclose about receiving free samples or, and probably very rarely, being paid to write a review but more over the fact that these new rules don’t apply to traditional media too.

Let’s be clear about this – some bloggers receive more wine as free samples than most of us drink in a year and often don’t review the wines they receive, they just go into their own cellar. I often see tweets saying how much they received – and one blogger declared today he had received 200 bottles so far. That’s pretty good monetization of one’s blog, if you ask me, given that they get to drink the whole bottle in circumstances of their own choosing and in very informal review environments with no editorial oversight. What are 200 bottles worth? Likely several thousand dollars of free wine.

If a winery finds it good PR to send sample bottles to the blogger community then it obviously believes it adds commercial value to their marketing efforts. The new guidelines impose a duty on the winery to ensure that the blogger does disclose their relationship so there may be a little more constraint on issuing freebies now.

The gross irony to me is that these bloggers are lamenting how much it costs them to write the reviews and why they should not be exposed to any risk, yet then flock to seminars on how to monetize their blog. You can’t have it both ways folks. Samples are tax-free monetization, Google Adwords on your site is monetization, advertising on your blog is monetization – you are in business. A nice (and more often hobby) business and one that may not be too terribly profitable, but still a business. You are paid in a different way but essentially a blog post in these circumstances is no different than an article in a publication. And the publications are held to a higher standard both by internal policies and by rules and regulations governing disclosure.

Don’t get me wrong though, blogging about one’s tasting experience is a good thing. In many cases its going to be nearer the average consumer’s actual results than many professionally-written articles. These rules won’t affect the majority of amateur wine bloggers who report on wines they have purchased. Only those receiving samples or being paid in some way will have to disclose. The FTC guidelines are quite clear on this.

The whole point of the new guidelines is to start to lay out rules for advertising and marketing using social media in what has been a totally unregulated and growing medium. As usual it lags behind the trend but its a good and fair start. Of more general interest, it seems to me on reading the guidelines that companies also need to be more careful about what their employees are saying about the products in their own informal social media communications – especially those writing about products with specific performance claims like weight-loss, teeth whitening etc.

And in the interests of fair disclosure: I run a wine store and do receive free samples for use in the store for customer tastings. Most of my tweets about wine are as a result of purchasing the wine myself or from trade tastings where you get a standard 2oz tasting – not a bottle to enjoy at home.

Lastly, I am a Canadian commenting on US regulations so I’m a relatively unbiased (and inexpert) observer – at least for the moment.

http://www.twitter.com/paulrickett

For Hire – 10K, 100K, 1M social web influencers January 28, 2009

Posted by paulrickett in Social Media.
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1 comment so far

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THIS IS NOT A REAL AD – just a hypothetical scenario. What would happen if this were true? It is possible.

twitter: @paulrickett  LinkedIn: http://www.linkedin.com/in/paulrickett

A Community’s Social Media Demographics January 16, 2009

Posted by paulrickett in Social Media.
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3 comments

I live on an island. Our island is adjacent to a major West Coast city so many adults and kids commute to the urban area for work and school. We are not isolated, but have a moat. Our 1600 households are wealthy with median income 30% above the Province as a whole. We have a very eclectic mix of people. Officially our population totals 3300, of which 2600 are adults over 20 with 2/3 over 40. Broadband internet access is available to virtually every household and I’d estimate over 90% have it. Part of my life involves marketing a beer and wine store in the community; I have an email newsletter which goes to 200+ people, I advertise in the local paper, write a wine column etc. I am on Facebook, LinkedIn and twitter. So having set the stage, read on…

How far does social media reach into this community? I’ve done some research and come up with the following:

Of my total email contacts worldwide and my store mailing list, about 30% are on Facebook.  About 20% of my global list are on LinkedIn but only about 10% of my store list are on that network. 3%  of global email list and near 0% of store mailing list are on twitter

LinkedIn users in the communitys: < 100

These are primarily male (> 70%). A good proportion of whom work off-island. I estimate that around 40% of these are inactive users based on a recent resynchronization of email addresses and invitations. Many of the inactive users were persuaded to set up on the network by friends but don’t use it and don’t have automated email notifications on. Before you say they just didn’t want to connect – I have talked to most of the unaccepted invitations! Many had forgotten they even had a LinkedIn account and were surprised when I told them I’d invited them.

Facebook users  < 400 adults

About 35% of my store mailing list has an FB account. Majority are  female (4:3 ratio). Very small overlap with LinkedIn of around 10% and that primarily in the male gender.   However I can identify some customers who are not on the mailing list so this gives me another way of developing a personalized contact if desired. The total user base is a bit of a extrapolation based on a combination of sampling from the telephone book, age distribution of the population, etc. (our 20-29 age group accounts for a mere 210 people). A small personal semi-random poll of 50 people turned up only 20% with FB accounts and  30% of them are rare or inactive users, NONE of the rest were intending to have one anytime soon.

twitter 10+ tweeps (out of 2300!)

Very concentrated in the 40+  demographic! c. 60% on FB, around 30% on LinkedIn, with a large overlap

Local moderated on-line forum

This has been around for quite some years and sells classifed and banner advertising on site . Has about 50 active posters. Claims 800 registered members but my sense is that more than half are inactive in that they don’t read it at all.

And by contrast the local newspaper (which also has a website) has a paid on-island circulation of 1400 copies per week. Given that most are shared within a household, this media has far more penetration than any digital network – but of course its not capable of 1:1 and interaction.

My big revelation is the number of inactive users in the two social networks. I don’t know if its endemic but when big numbers for social media get thrown around (e..g FB’s 150M) I think its time for them to publish better metrics about activity so that realistic assessments of their utility can be made, especially when compared to the wealth of data about print media. it also indicates to me that there is a big ‘fad’ factor at work where people join up under encouragement without clear ideas of how they will use it or of its utility and after they’ve made the obligatory hook-ups with family and friends its left to languish.

The surprise was the proportion of female users on FB. It poses a question, is FB skewed gender-wise? That could have big implications for how and what one communicates.

For our store, traditional media is still the best way to get mass eyeballs on our products here, seeing as we don’t use web/SEO/SEM yet. Given the internet penetration the latter is a great way to capture eyeballs in the community and far more pervasive than the social networks.

Does traditional media influence local buying more than digital? For that the jury’s out but I believe will rule in favour of digital. I use both email and printed media to promote the store. I can draw very few examples of cause and effect, except for the fact that our sales are up considerably since I started doing both in conjunction with in-store marketing. My assessment is that print advertising has raised our awareness and brought new customers into the store but its digital media  that has driven specific purchases once we have captured their email address.

As for LinkedIn, FB and twitter? Twitter I will use and expect a lot more islanders to be there in due course, plus its complementary to all other social media. Facebook is the predominant social network here but its not yet reaching enough of my customer base.  I don’t have time or the margins to use it for 1:1 proactive marketing – but there is potential there. I love LinkedIn but that’s for my business life, I won’t be looking at that as a marketing tool  for the store. All three vehicles are valuable to me as a consultant and wannabe wine guru beyond our island confines.

twitter: @paulrickett

Challenging Conventional Wisdom January 14, 2009

Posted by paulrickett in Social Media.
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4 comments

I am a convert to social media, how could I not be. I was one of the early email adopters, a Compuserve user and many other long departed early internet ventures and tools. So what am I challenging? The current conventional wisdom and rush to social media as the ‘silver bullet’ to solve all marketing problems. Yes, its useful, Yes, it is a good part of the future if not the future itself judging by my 17 year old son’s on-line experiences. But is it the answer to all marketing today? Certainly not, and not for some time yet.

Why?

Significant  proportions of the population are not engaged yet, especially in higher age demographics

Human nature has not changed and most still prefer to deal with a human when buying important things especially in B2B and many B2C applications. For instance,the Internet was to be death of branch banking at the beginning of the century. Now its just another channel and branch banking is experiencing a phoenix-like rise from the ashes of our expectations.

While Facebook and Myspace boast country-sized user bases, these are fragmented and spread over the world which means for 90% of businesses that these users represent a small portion of their customers and potential customer markets.

The potential for fraud is already startling. But abuse of social media is really just beginning and, people, there’s going to be a backlash at all the subtle, and not so subtle marketing directed at them through Twitter, Facebook etc. With recent cases overseas on serving divorce papers, virtual murder etc, many people are going to be turned off and perhaps retreat to moderated forums. Not forever but social media is not yet a panacea for business success.

The evangelists would have us believe that the future is now, I’d argue its only just starting and we are a generation (at least) away from near-universality in the developed world let alone the rest.

Social media is undoubtedly useful and needs to be addressed by most marketers, but they still need to blend it with the older and more conventional tools and disciplines.

Twitter: @paulrickett, LinkedIn: http://www.linkedin.com/in/paulrickett