Disclosure of Material Connections


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Slides from my presentation on disclosure of material connections, presented at PRSA Chicago, July 20, 2012.

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  • is that a picture of the hershey amusement park? is it still the way it was - or have the amusements been completely modernized? i can smell the chocolate just by looking at the picture. i'm sorry i missed the presentation, although i must say that when a former Michigan Ave. employer baldly listed businesses on her face book page that i suspect to the point of certainty she had financial interests in - i missed the feeling of 'being in the know' even though i know perfectly well that the old 'tendrils under the table' networks were strangling vines... In Old Chicago, where being 'in the loop' had many meanings.
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Disclosure of Material Connections

  1. 1. Disclosure of material connections:what you need to knowDavid Kamerer, PhD, APRLoyola University Chicago
  2. 2. Executive summary:If you have a material connection with a product or serviceand write about it, you must disclose that connection to yourreaders.Example:You write a restaurant/food blog. You receive a free meal atJoe’s Restaurant. If you write about your meal, you must tellyour readers that you did not pay for your meal.This also extends to influencers.
  3. 3. LogosPathosEthos
  4. 4. Sources of information, old model:JournalismAdvertising
  5. 5. Sources of information , new model:JournalismAdvertisingMedia relationsOwned mediaOnlineSocial
  6. 6. Edelman model: media cloverleaf
  7. 7. Everyone is a publisherPayolaBlogolaAdvertorialInfo-tainmentChurnalismPay-per-play
  8. 8. The tragedy of the commons
  9. 9. Background
  10. 10. Edelman and Wal-Mart2006walmartingacrossamerica.com“Working Families for Wal-Mart”
  11. 11. The FTC rules16 CFR Part 255“Guides Concerning the Use of Endorsements andTestimonials in Advertising”Dec. 1, 2009•Restrictions on describing “typical” results in advertising•Guidelines for celebrity product endorsers•Guidelines for disclosing material connections betweenadvertisers and endorsers
  12. 12. Ann Taylor Key takeway: it is the advertiser’s responsibility to assure disclosure, not the blogger’s
  13. 13. Reverb Communications memo:Reverb employs a small team of interns who are focused on managingonline message boards, writing influential game reviews, and keepinga gauge on the online communities. Reverb uses the interns as asounding board to understand the new mediums where consumers arelearning about products, hearing about hot new games and listen tothe thoughts of our targeted audience. Reverb will use these internson Developer Y products to post game reviews (written by Reverbstaff members) ensuring the majority of the reviews will have the keymessaging and talking points developed by the Reverb PR/marketingteam.
  14. 14. Reverb Communications memo:Internal User Reviews Process:o Internal “User Reviews”o Pre-written by in house writerso Positivereviews – not over the top – but endorsing the game as a goodproducto Age ranges+ 12 – 18+ 19 – 25+ 26 – 34+ 35 – 45+ 46+*Written from the angle of each age group including key words thatresonate with each audience* Reviews begin to go live on day oflaunch on the iPhone storefront
  15. 15. Reverb Communications
  16. 16. $5 million salesLegacy Learning Systems $250,000 fine
  17. 17. 50 Cent+ 290% in one day$8.7 million
  18. 18. Codes of EthicsPRSA’s Code of Ethics has a provision entitled “Disclosure ofInformation,” based upon the principle is that “opencommunication fosters informed decision making in ademocratic society.” The intent is “to build trust with thepublic by revealing all information needed for responsibledecision making.”The code states that a member shall:Be honest and accurate in all communications.Act promptly to correct erroneous communications for whichthe member is responsible.Investigate the truthfulness and accuracy of informationreleased on behalf of those represented.Reveal the sponsors for causes and interests represented.Disclose financial interest (such as stock ownership) in aclient’s organization.Avoid deceptive practices.
  19. 19. IABCProfessional communicators do not accept undisclosed gifts orpayments for professional services from anyone other than aclient or employer.
  20. 20. WOMMAStandard 1 – Disclosure of identity: A WOMMA member shall require theirrepresentatives1 to make meaningful disclosures of their relationships oridentities with consumers in relation to the marketing initiatives that couldinfluence a consumer’s purchasing decisions.Standard 2 – Disclosure of consideration or compensation received: AWOMMA member shall require their representatives to disclose meaningfullyand prominently all forms of consideration or compensation they receivedfrom the member, marketer or sponsor of the product or service. In otherwords, WOMMA members shall not engage in marketing practices where themarketer/sponsor or its representative provides goods, services, orcompensation to the consumer (or communicator) as consideration forrecommendations, reviews, or endorsements, unless full, meaningful, andprominent disclosure is provided.
  21. 21. WOMMA, cont’d:Standard 3 – Disclosure of relationship: A WOMMA member shall requiretheir representatives involved in a word of mouth initiative to disclose thematerial aspects of their commercial relationship with a marketer, including thespecific type of any remuneration or consideration received.Standard 4 – Compliance with FTC Guides: A WOMMA member shallcomply with the Guides Concerning Use of Endorsements and Testimonials inAdvertising promulgated by the Federal Trade Commission. See 16 C.F.R. §§255.0–255.5.
  22. 22. How to: blogsDisclose in-postSite disclosure
  23. 23. How to: blogsWould a single disclosure on my home page that “many of the products Idiscuss on this site are provided to me free by their manufacturer” be enough?A single disclosure doesn’t really do it because people visiting your site mightread individual reviews or watch individual videos without seeing thedisclosure on your home page.Would a button that says DISCLOSURE, LEGAL, or something like that besufficient disclosure?No. A button isn’t likely to be sufficient. How often do you click on thosebuttons when you visit someone else’s site? If you provide the information aspart of your message, your audience is less likely to miss it.
  24. 24. Examples of in-post disclosures
  25. 25. Not quite a disclosure: c/o (“courtesy of”)In-postSiteState-ment
  26. 26. Site disclosures: two partsA statement of acceptance:A statement of independence: (alllacqueredup.com)
  27. 27. Short disclosure policies (putthison.com)
  28. 28. BlogWithIntegrity.comBy displaying the Blog with Integrity badge or signing the pledge, I assert that thettrust of my readers and the blogging community is important to me.I treat others respectfully, attacking ideas and not people. I also welcome respectfulddisagreement with my own ideas.I believe in intellectual property rights, providing links, citing sources, andccrediting inspiration where appropriate.I disclose my material relationships, policies and business practices. My readerswill know the difference between editorial, advertorial, and advertising, should Icchoose to have it. If I do sponsored or paid posts, they are clearly marked.When collaborating with marketers and PR professionals, I handle myselfpprofessionally and abide by basic journalistic standards.I always present my honest opinions to the best of my ability.I own my words. Even if I occasionally have to eat them.
  29. 29. Microchannels: Twitter, Facebook, SMSWhat about a platform like Twitter? How can I make a disclosure when my messageis limited to 140 characters?The FTC isn’t mandating the specific wording of disclosures. However, the samegeneral principle – that people have the information they need to evaluate sponsoredstatements – applies across the board, regardless of the advertising medium. Ahashtag like “#paid ad” uses only 8 characters. Shorter hashtags – like “#paid” and“#ad” – also might be effective.#paid#ad#client#sponsored
  30. 30. Core values/social channels: honesty willingness to listen transparency openness human voice the people own your brand
  31. 31. Resurgence of journalism and other trustedchannels?Content curationFilters
  32. 32. For more information:http://davidkamerer.com(search for “disclosure”)http://www.delicious.com/davidkamerer/disclosure
  33. 33. Thank you