FTC To Investigate 'Viral Marketing' Practices 299
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."
How low can they go? (Score:5, Insightful)
Of course it is, it exploits people's inherent trust for their friends' judgement: "if X says this and X is a nice guy, then X must be true". Only if X is paid by a corporation to spew out nice stuff about some product, it basically wrecks that basic principle of human communication.
Re:How low can they go? (Score:5, Informative)
There's a syntax error in your formula.
Re:How low can they go? (Score:5, Funny)
Re:How low can they go? (Score:5, Insightful)
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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 tha
May also affect affiliates (Score:2)
Or, more specifically, the affiliate networks & companies involved may be forced to require affiliates to do, since the networks/companies are the ones who'll be getting the fines.
Read Copyblogger's excellent post [copyblogger.com] on this subject for more details.
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Re:How low can they go? (Score:4, Interesting)
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.
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If it's a fraudulent claim, sure, that should be illegal, but it shouldn't matter if it's a person or a "business".
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You're free to say that of course! However, the Supreme Court doesn't agree with you. There's a long history of distinguishing different kinds of speech and protecting them in different ways and to different degrees. Commercial speech versus political speech, for example. Like I said, your viewpoint is valid - just want to make sure you know it's at odds with US law.
Re:How low can they go? (Score:5, Informative)
Precisely. The word you're looking for is "dramatizations". And you are required by law to disclose when this occurs.
I cite 45 FR 3872, section 255.2:
And section 255.5
Now, admittedly, this is from an FTC guide and not directly from the relevant body of law. You'd have to ask somebody more familiar with the details of advertising law to tell you which specific sections of code and/or relevant case law that these opinions are derived from. That said, the FTC is well within their rights to investigate this and prosecute any ad agency proven to use guerilla marketing tactics. They are clearly examples of false advertising, and are thus NOT ethical and NOT legal.
A few problems with that... (Score:3, Insightful)
Let's say I work for a studio that is producing a new movie. If I go out on a movie forum and say "Have you heard about this movie that's coming up? It's going to be pretty cool!!!", that could be considered viral marketing.
So, what if it's true, and I really believe it? Even if it's not, you can't prove that it's false or misleading. An opinion, by definition, is subjective.
Also, where do you draw the line? I'm a software en
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As far as I'm concerned, no company should be allowed to engage in a mindfuck that severe.
Re:How low can they go? (Score:5, Informative)
This is considered commercia speech [wikipedia.org] and doesn't have the same First Amendment protections as other speech.
Re:How low can they go? (Score:5, Funny)
Thanks a lot, asshole. First marketing ruined radio; then TV; then movies; then video games; then the internet; Now they're trying to ruin REALITY. Thought police indeed.
Astroturfing (Score:5, Informative)
Now we need to come up with a term for what will eventually prove to be its opposite. Corporate sabotage that seeks to inspire negative propoganda for another company. If Sony hadn't been repeatedly shooting themselves in the foot with a sawed-off 12 gauge lately and inspiring all their own negative publicity, I'd almost suspect that of their vomit-inducing attempt at creating buzz for the PSP [alliwantfo...isapsp.com].
Re:Astroturfing (Score:4, Insightful)
Busted. Nailed. Snagged. As many of you have figured out (maybe our speech was a little too funky fresh???), Peter isn't a real hip-hop maven and this site was actually developed by Sony. Guess we were trying to be just a little too clever. From this point forward, we will just stick to making cool products, and use this site to give you nothing but the facts on the PSP.
Sony Computer Entertainment America
Well, I must say, as much as I despite Sony these days, it takes balls to come clean and coldly admit to trying to con people, instead of simply pulling the plug on the site. Hats off Sony, for once you did the right thing.
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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 n
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OK, so I'll just go by word of mouth then.
Wait a minute....
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A better solution would be to teach children how to think critically, but that's not gonna happen.
Not necessarily... (Score:5, Insightful)
My devil's advocate reaction to this is, "not necessarily." If company X didn't have to spend a billion dollars to counteract company Y's $900 million advertising budget, they could use that money to help save consumers dollars. Or they could put it into R&D and engineering to actually make a better product instead of just telling us it's a better product.
Also, I (and a lot of other people) are more than willing to pay a premium for ad-less products. Does anyone remember the days way back when most cable channels didn't have ads? Now you have to pay the cable company for channels with ads, and the channels that don't have ads are very expensive. (Yet notice how they still have a lot of subscribers for that premium.)
I myself don't watch ads on television at all. Every show I want to watch, I either get via iTunes download for $2 a pop (or a season subscription), or by less scrupulous means that I don't want to go into if it's not available by any other means (wink, wink). I have a few small web sites I run for personal reasons, and I buy the hosting space at a reasonable non-free price so that I don't have to subject my visitors to a barrage of ads. I run Firefox with AdBlock so that I can avoid as many ads as possible while browsing the Internet.
I still run across ads now and then, as they're unavoidable in society. The point, though, is that I still spend plenty my share of disposable income, companies still make plenty of money off of me, but they have to do it by actually having products of decent quality that I want or need, not by yelling in both my ears constantly.
In other words, there is another way.
Personally, I think the best advertising any company can have is virtually free. It's from friends who have products and tell me about them. It's from reputable website reviews that describe up-and-coming technology and products. It's from companies' own websites that provide as much real information about products I'm interested in as I need to make an informed decision. All of these things are dirt cheap compared to the billions that companies spend on radio, television and web ads that I never see or hear. Go figure.
Amen.
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That's just barely true! I browse with Firefox's adblocker so I can't remember the last time I saw a web ad. I watch 100% of television using a DVR, so I don't watch TV ads either. I don't go to the movies (2 small children) so don't see those ads. I listen exclusively to NPR so nothing there unless you count the sponsorship messages from the guy with the nasal voice. I don't live somewhere that has billboards, so I don't see those
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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
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"I've seen the future. [imdb.com] Do you know what it is? It's a 47-year-old virgin sitting around in his beige pajamas, drinking a banana-broccoli shake, singing I'm an Oscar Meyer Wiener."
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Whew.
OK, so now that we're all back to having to tell each other what building downtown contains what businesses (since, I presume, you wouldn't even want the Yellow Pages to exist)...
How does your local farmer communicate the fact that, this week, he's got some really nice radishes? Let's see... he can't put up a sign (eeeek! advertising!). He can't stand on the corner and fill you in on his inventory for the week (gaaah! advertising!)... no, he has
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Do you know how to read?
The point is that a global registrar, aka the yellow pages, in real time, with no flashy larger adverts available, just the facts with the option to delve further into relevant op-ed pieces is all that would be needed to find goods and services, and that if
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I agree with what you have to say here. I cancelled my subscription to Maxim magazine a few years
Re:Astroturfing (Score:4, Insightful)
Seriously, advertising as an industry has no redeeming qualities. It consumes resources and produces nothing of value. It convinces people to do or buy things they wouldn't have if they thought about it rationally, and it does this through deceit and making people feel insecure. It's not quite as bad as baby torturing, but it certainly isn't something any decent, moral human being would ever want to do.
Let me guess, you're in advertising? If so, why don't you take some advice from comedian Bill Hicks?
And to that let me add: anyone in the business of mind control, I hope you get some horrible disease and die a painful death. As Bill said, there is no excuse for what you do.
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The person selling the product pays an advertiser. So much, in fact, that the distribution media becomes free -- in the sense that it can carry "non advertising" material. That's what you mean, yes?
But, nothing is "free". The cost of the entire thing had to be absorbed. The advertiser is making a profit, the distribution media producer is making a profit -- where did it all come from? That's right; increased cost to the buyer. Buy something th
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This one is way too easy. There are enough vagarities in the dry cleaning business to differentiate them. Often times there are numerous dry cleaners within a very short distance of someone's hou
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As it stands, I think I'll stay where I am and work towards propagating better economic structures that empower people and render those who think the way you do as ostracised and powerless as I can manage until you get your head out of your ass and decide to play ball with the rest of us or die poor and powerless first.
Personally, I'm the kind of insensitive son of a bitch that could give a flying fuck
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Now we need to come up with a term for what will eventually prove to be its opposite: corporate sabotage that seeks to inspire negative propoganda for another company.
Sodium tetrasulfating?
Re:Astroturfing (Score:5, Insightful)
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The publicity they're getting is bad for the PSP and the advertising company both. On the one hand, people know it's fake, and it's pathetic to have to pretend to have friends (which is what astroturfing is, at its roots). On the other hand, if they get bad press for their client, that's bad press for themselves. Who wants to hire an agency who gave someone bad press?
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Not to invoke Godwin's law, but Hitler has a bunch of name recognition, and I doubt anyone would consider it good publicity.
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Perhaps Hitler was a poor example, because there are people out there who agree with what he represented. I guess that
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Sony already has name recognition. Name recognition is not what they're trying to get here, what they're trying to get is positive association - and they've gotten the exact opposite.
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Sure. Why just be famous when you can be infamous with a plethora of free publicity?
Re:Astroturfing (Score:4, Insightful)
I'd be willing to bet that most people in the demographic they were aiming this for know what a PSP is already. I was halfway thinking of getting a PS3, but all these little things continue to turn me off to it. The chances of me purchasing a PS3 are closing in on the chances of me buying a PSP - that is to say, No Chance.
In the end, this isn't just some "bad press" I'm hearing about; I've been insulted. Sony seems to think that the demographic of people that will buy their PSP product, of which I'm a part, is both illiterate and unable to spell properly. Granted, Sony hasn't insulted me personally, but doing this has nonetheless lowered my view of them even further.
They have sacrificed their target demographic's goodwill for gaining a token amount of mindshare outside of the demographic. And the thoughts associated with that mindshare may be: "Golly, those gamers sure are pissed at Sony. Maybe I'll get little Timmy a DS instead of a PSP."
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Re:Astroturfing (Score:5, Interesting)
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 (Score:5, Interesting)
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.
Re:Astroturfing (Score:4, Funny)
Hey, I'm from New York, I already do that.
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Wouldn't this, too, be astroturfing? Astroturfing, I thought, was any fake grassroots campaign, negative or positive.
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How about "Astroturding"?
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Neither government nor corporations are the ultimate power, neither should be given free reign at the expense of the other. What we need is some fucking sanity, and a good start would be getting rid of this practice. Fake testimonials need to be told about in p
Investiage (Score:3, Funny)
About Time (Score:5, Informative)
Fitting story (Score:5, Insightful)
See particularly this portion [slashdot.org] of the comments/story...
OT: Community redemption. (Score:5, Informative)
No. Let me remind you how our system works:
1. Person finds something they think is cool.
2. Person submits link and story to Slashdot.
3. Slashdot editors do a quick read to see if it's not blatantly inaccurate or uninteresting.
4. Editors put the story up.
5. Readers check the story out.
5. a. At least one reader looks into (or already knows) the background of the article.
5. b. At least one reader looks into (or already knows about) the subject of the article.
5. c. At least one reader looks into (or has already speculated about) the ramifications of the article.
6. We discuss.
That's the point: the community decision for the article you linked was that it was a guerilla campaign. When I read that article, I didn't realize it was such, I assumed the same as the editors. Fortunately, there's a large community here, several of which commented that not all was as it seemed, and I was enlightened.
Yay for community discussion. Articles aren't generally statements that the community makes [digg.com], they're statements that the community responds to. That's why us old timers (and I'm a young'un, at that) are still here.
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When did it become illegal? (Score:3, Insightful)
If they want to investigate deceptive advertising that has cost Americans billions of dollars, then I would prefer that they investigate the Iraq war.
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Don't they have anything better to do? (Score:4, Insightful)
How about just dealing with it when the compaines lie and that whole false advertising thing?
Do people really think places like youtube and myspace were created for the community to use? No, they were created so they could get bought out by the big corporations and those corporations could put advertisments up.
Oh, and having a link in your signature to something you are trying to hock and replying to this article that this should have been looked into a long time ago... yeah, kinda hypocritcal.
Wii (Score:3, Insightful)
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1. Nintendo has had a lot of success with the DS and DS Lite.
2. The Wii is more available and costs a lot less than the PS3 which is the other new console on the market.
3. Sony has been creating a lot of negative press all on their own. UMD movies where where a huge flop, Sony was really hoping that the PSP would take the number one spot in handhelds like the PSONE and PS2 did in consoles which it has not. Rootkit and exploding batteries fi
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I think that in the future the way we (slashdot/digg/bloggers) marketed the Wii will be a textbook sample of how viral marketing is done.
And what exactly is that process? From what I've seen it's:
1. Develop product that people want, does something new and interesting that no other product has done before, and at a reasonable price.
2. Produce that product in adequate numbers so people can actually buy the product.
See, the hard part is accumplishing step 1. Most companies would give their eye teeth to be ab
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Sorry, that analogy doesn't apply. If individuals specifically paid money by Berle's producers to extol his comedic virtue, without disclosing this business relationship, were among these friends, then the term "viral marketing" is accurate. As far as we know, nobody was doin
Won't someone think of the ad agencies?! (Score:5, Funny)
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An even more sinister activity (Score:4, Funny)
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The Sony Strain... (Score:4, Informative)
Sometimes it Backfires (Score:3, Informative)
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Santa says "what about ethical? ho ho ho!" (Score:3, Insightful)
So is putting crack cocaine in your cola drink.
Which brings us neatly onto cigarette sales.
Ha, I'm immune (Score:5, Informative)
Sigh.
You mean? (Score:3, Funny)
I was 15 hours short of a marketing degree when I realized i wasn't qualified, I have a conscience!
Were all Slashdotters born yesterday? (Score:3, Insightful)
For Christ's sake, this has been the way the world has worked for thousands of years. (Remember the story about John the Baptist starting the buzz about the "one who comes after"?)
"Consumers" have NEVER "set the buzz." If you think otherwise, I'd like to meet you, because there's a good chance you'll be buying whatever I'm pitching in 3-6 months. (And you'll think it was your idea too.)
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Remember the story about John the Baptist starting the buzz about the "one who comes after"?
To be fair, John the Baptist wasn't getting paid for his zeal, and he was eventually beheaded by Herod Antipas, at the request of Herod's wife.
I don't think the execs of the company that made this "blog" would be quite willing to die for Sony.
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The age of the cynical bastard (Score:4, Interesting)
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.
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Your post is probably some kind of not-so-well-hidde
I heard about this... (Score:2, Funny)
Updates on TechCrunch (Score:2)
De Beers, Viral Marketing Since 1888 (Score:5, Insightful)
De Beers [theatlantic.com] has the longest running viral marketing campaign in history. It started in the 1880's and is still going strong today.
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Another despicable instance of top-down commercial culture having actual material consequence. Tragic.
Isn't Viral marketing... (Score:2)
Divided Opinion (Score:2)
Part of me wants to think this is a good thing. That consumers don't deserve to have products shoved down their throats and be saturated by advertisement all day long. This part of me also thinks that if companies could, they would advertise directly into our dreams ala that one Futarama episode: http://www.futurama-madhouse.com.ar/scripts/1acv06 .shtml [futurama-madhouse.com.ar]
Fry: So you're telling me they broadcast commercials into people's dreams?
Leela: Of course.
Fry: But, how is that possible?
Farnsworth: I
Protect Me, Oh Federal Government (Score:5, Insightful)
For my entire life, I've been exposed to celebrity endorsements, and the only effect has been to fine tune my bullshit filter.
Please refund the portion of my taxes that is going to paying these guys salaries.
ilovebees (Score:2)
Because when Microsoft, who funds SCO [slashdot.org], makes shady deals [slashdot.org] followed by spurious claims [computerworld.com] engages in viral marketing [wikipedia.org], it's OK.
But when Sony, who delivers Linux on their console [ign.com] does it, it's BAD.
Yeah must be Wednesday again.
Investiage (Score:2)
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There are all kinds of other laws regulating commercial spee
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And, quite honestly, a little research into the issue could have told you this. Don't
Re:Question . . . (Score:5, Insightful)
Why is important to tell people who paid for a political comercial when it was played on TV?
The reason is simple, because it is reasonably simple to mislead people about the source and content of an advertizement. Consider the harm to a political campaign if people started making fake comercials for their opponents in order to make their supporters look stupid ("My name's Dan, and I think all these 'feminists' need is a good ing. I support John Smith because he believes a woman's place is in the kitchen.").
As comercials move away from being in comercial breaks and billboards to product placement and blogs it is important to tell people that they're being advertized to and who is doing the advertizement.
Consider the damage that would be done to the XBox had Sony created a fake blog on how to pick up 12 year old boys on XBox Live (and made sure that this got noticed on major news sites). If Sony got away with it, XBox Live could be killed by people's outrage.
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In the midterm elections 2006 I found on reddit and some other websites:
1) Repeated automated calls made "important information about Lois Murphy," or another particular candidate. They would continue with explanations on this person's terrible policies - by which time most people had hung up. FCC says the originating party must be identified at the *beginning* of the message - in this case it was at the end.
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One of them began with general local politics then honed in on one senator. It gave a series of facts about them, and asked how much each fact made you think more negatively about them (i.e. you selected between "very bad", "bad",
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I need to move to whatever place you're describing. Political harm, you say? That ad could win votes in these parts.