FTC To Investigate 'Viral Marketing' Practices

mcflaherty writes "The Federal Trade Commission has stated that it is going to investigate the use of 'Viral Marketing' by corporations. This is the type of advertising that seeks to start a word of mouth campaign for the product via consumers themselves. Previously, consumers themselves set the buzz. But lately advertisement firms are stepping up to the plate themselves, seeding the market with buzz that looks independent of the company, but is in fact funded by them. The crew at Penny Arcade contend that corporate generated buzz is not Viral Marketing, and perhaps Guerrilla Marketing would be a more apt term. Either way, it appears to be a profitable advertising model."

Re:How low can they go?

[Anonymous Coward]

Free speech is free speech. Just be happy they aren't transmitting commercials into your dreams (yet).

As long as a corporation isn't explicitly lieing about their products, I don't see a problem. We hardly need another government restriction on free speech (to go along with McCain-Feingold, obscenity laws, and the attempted CDA laws).

Re:Astroturfing

[pimpimpim]

Well, at least viral marketing can be killed instantly by the negative karma that comes about when the blatant lies of this being an 'enthusiast's user opinion' are uncovered. I really like that aspect of viral marketing, the message will be accepted if the cooperation is fair about it, and just couldn't use original channels for an advertisment (for example a car advertizement that would be too shocking to show on TV, but is artistically interesting anyway.).

However, if the cooperation is trying to screw us, and someone finds out (as will eventually happen anyway), the viral marketing works just as viral against the cooperation that started it. Therefore, viral marketing is playing with fire!

All in all this must be the most fair form of advertizing, we the users can directly respons to it and decide if we like it or not.

Re:Astroturfing

[ShieldW0lf]

If I followed you around all day long whispering that you'd be sexy if you had that car, but you don't, so you're not, and that you'd be rich if you went with that accounting firm, but you don't, so you're not...

If I followed you around telling you that you suck because you don't own this stuff, that you suck because you don't look like this...

If I did it for days and months and years...

Would it have an effect on you?

Advertisers use invasive propaganda tactics to try to make you unhappy with your life for no good reason at all, and present themselves as the only ones who can make it better, but they never make it better even if you buy their product.

Advertising is an assault. And it uses scientific methodology to become ever more effective at making you and everyone else do stupid wasteful things for irrational reasons.

The answer is really simple.

Advertising is evil, and shouldn't be permitted.

It doesn't generate any raw materials, it doesn't generate any finished products, it doesn't generate any new ideas for how to do things, it doesn't have any redeeming merit whatsoever.

In making the public aware of what is available to them, it doesn't serve any higher societal good than a global registrar of products and distributers aka the yellow pages would accomplish, and it does a good deal more harm.

Just say no to advertising and advertised goods and services.

examples

[Anonymous Coward]

I've read many a customer review in my day and I swear that the NewEgg reviews for the Zune look fake. Do they have a method to verify that the reviewers even own the product?

Re:Astroturfing

[ShieldW0lf]

If we all stop trusting each other, and keep it in the back of our minds that everyone we talk to might be trying to decieve and manipulate us for some third parties benefit, then we'll be ok.

Seriously, this sort of thing should be punished by summary execution. It's a huge assault on the very fabric of our society, trying to create a world where we're afraid to participate with our neighbour with trust.

It's not the little thing you're trying to make it out to be. People that perpetuate this sort of thign should be shot in the head and buried in a shallow unmarked grave.

The age of the cynical bastard

[gosand]

My friends have long considered me to be a cynical bastard, because I always question the validity of everything. Nothing is ever what it seems, there is always some kind of not-so-well-hidden advertising, product pushing, and damn-near lying. It has turned me off of a lot of TV and music, and I generally get very irritated when I come across sneaky marketing and/or advertising. It makes it pretty hard to believe anything anymore, and really shows the power of how we present things. (not to mention the gullibility of most people) I don't shop and Wal*Mart because I think they are scumbags, I don't partake of anything Disney. But it seems that it is almost unavoidable these days.

Hell, I don't even know what my point is in posting... I guess I just wish that more people would question these things and take a stand against them, because that is the only way they'll go away. But most people just don't seem to care.

Re:How low can they go?

[packeteer]

The Government is allowed to regulate all kinds of speech. You are not allowed to lie about your stocks and spread rumors and deception so that you pump up your own stocks. This is illegal and I think very few people think that commiting fraud through deception is a type of protected speech.

Re:When did it become illegal?

[earnest murderer]

It is in fact in the FTC's domain and is already regulated. The fuss is that the FCC has, after years of appeals, roused itself enough to talk about the idea of doing something about it.

Re:Astroturfing

[boyko.at.netqos]

The Sistine Chapel is an advertisement for the Roman Catholic Church.

I agree with many of your points; but calling for the abolishment of any type of speech (even commercial speech) is a road we dare not walk down.

The problem is that of transparency and honesty; I have no problem with an advertisement that honestly states what the solution to a problem you have is (although there's a grey area - see Freakonomics of how Listerine "invented" halitosis in America.)

In the end, my big concern is that advertising works because it appeals to the "reptilian hind-brain" of people. If you want to stop advertising's ill effects, start producing smarter people!

Re:How low can they go?

[N3Roaster]

In some cases, the government regulates business speech to the point that even telling the truth is not allowed. For example, suppose I buy an organic food product (say, tea) in a large quantity and repackage it to sell in the smaller quantities someone might buy. If I'm not certified for organic processing (yes, moving something from one bag to another is processing), that tea can no longer be called organic in the United States, even though nothing has been done to it that could possibly cause it to not be organic. Saying that it is organic is not allowed. Even the weaker and 100% true claim that it was certified as organically grown is not allowed. (see USDA National Organic Program)

Re:De Beers, Viral Marketing Since 1888

[Sunburnt]

That Atlantic article about DeBeers was brilliant. Paying thousands for a chunk of cut carbon always seemed ridiculous to me, and its a fascinating reading abut how the whole consumer perspective on diamonds' value is a tenuous marketing scheme, successful for almost a century.

Another despicable instance of top-down commercial culture having actual material consequence. Tragic.

Re:How low can they go?

[Talez]

Vodafone in Australia have been doing this for at least a year maybe more. They've had an employee using the alias "Kelly20" on certain messageboards who just slags off the competition constantly.

Eventually they've been outed and banned but in the mean time it does cause quite a bit of chaos and people start touting information thats misleading and taken out of context as fact.

The Original Post is Totally Missing the Point

[Nommus]

Viral marketing is quite often an attempt to encourage users to pass on your marketing material without any financial inducement.

As soon as there is an additional incentive, it becomes much more like affiliate marketing.

Some incentives might be included that are not financial, such as unlocking access if you get 3 friends to sign up.

The biggest problem with the FTC statement is with Affiliate marketing, especially where a marketer is offering a recommendation regarding a specific product, with the ability to link directly through to that product with a CPA or affiliate link.

On stuff like this you listen to lawyers, and consult with them if you are in any kind of internet business.

Here are some references to what 2 lawyers have written about this.

http://www.copywritersblog.com/2006/12/13/ftc-crac ks-down-on-word-of-mouth-advertising/ [copywritersblog.com]
http://www.copyblogger.com/affiliate-marketing-dis closure-now-required-by-law/ [copyblogger.com]

This affects Amazon, Google, Ebay, Clickbank, Commission Junction, Linkshare and a host of other billion dollar companies that allow affiliates to link directly through to a particular product or service with a recommendation.

Disclosure: I practice disclosure on my blogs and use affiliate links recommending products, and have an interest with this as I just launched a disclosure policy plugin for Wordpress. It is available free of charge and is GPLed

Re:How low can they go?

[bogado]

Well, the government can simply abolish this so called bill of rights and regulate those anyway. Govern, by definition, has the power to do what it wants, if it does over do it people will be unsatisfied and may (or may not) revolt and overthrow it, replacing it with another govern with different goals and directives.

What I don't see is why people don't trust the govern to cut corporation power. Every time anyone says that corporations should be regulated there are a lot of people that complains and say that "the market" will regulate them, too bad they already control it to an extent where they don't need to worry about this power of controlling. Sure I can boycott Sony for their, many, blunders and attacks to their customers, but even if I could (and I can't) convince all my friends to do the same do you think I done even a dent on it's reputation? No, people don't even know that there was a root-kit, much less what a root-kit is, they don't know that they are using this disgusting "pseudo viral marketing" campaigns, and people will still buy PSPs, CDs, playstations and whatever Sony throw in the market.

The worst part is that those same enterprises are already exerting power over many governments around the world, just count how many copyrights acts are being passed all over the places and yet many people defend the corporation and say that they should continue their power escalation. I am not sure that it is even possible to revert this picture now, but I will not defend them, I believe that corporations, specially large ones, are a type of government that have a growing area of influence and as such they must have the same social obligations that governs have.