Can New FTC Regs Protect PR’s Stake in Digital Media?

My colleague Katherine Axt and I attended last week’s PRSA New York seminar, “Regulatory Scrutiny of Social Media: The Impact on PR Communicators in 2010 and Beyond“ where New York Attorney Michael Lasky walked us through the FTC’s updated guidelines concerning online Endorsements and Testimonials.

Among the new regulations, the FTC requires “writers on the Web to clearly disclose any ‘material connection’ such as freebies or payments they get from companies for reviewing their products.”

What immediately struck us was how these new regulations will alter the practice of PR teams recommending “pay for access” opportunities with specific online communities.

A trend right now is for PR companies to consider opportunities with big blog networks on behalf of its clients. These tactics call for a PR agency’s client to pay thousands of dollars to have access to its network of bloggers. Essentially, the PR team would send collateral materials, such as fact sheets or client testimonials, to the blog network, who would share it with its bloggers. Each blogger would then decide on their own if they wanted to write about it. The network typically would promise a certain number of placements.

In many instances, the PR agency’s reps, however, would not be allowed to work directly with the bloggers who received these materials.

This practice falls short on a number of different levels.

First, PR’s differentiator is in earned media, namely developing meaningful relationships with digital influencers, not unlike how we’ve historically built trusted relationships with traditional media. Any digital media program that eliminates or impedes this relationship building should not be considered.

Second, in an open letter to the FTC Chairman, IAB CEO & President Randall Rothberg, accurately cited the new FTC guidelines, which “acknowledge that bloggers may be subject to different disclosure requirements.” In a ‘pay for access’ situation, each blogger would need to disclose that the client paid for access, which led to its coverage. But without the chance to interact directly with the bloggers, the PR agency would not be able to protect its client and ensure inclusion of proper disclosure language. Invariably failure to properly disclose puts the agency and the client’s brand at risk.

Finally, one might be concerned about how the economics of the agreement might affect the ability for an agency to garner authentic coverage for their client. The idea of paying a fee for a guaranteed number of blog posts does not seem to ring true to the values of Public Relations and earned engagement, but instead sounds more like paying for impressions.

For these reasons, agencies should seriously consider the benefits of using the tactic of working with a blog network to engage influencers, especially if it precludes the agency from any direct access to the blogger.

Some argue that this is no different from a satellite media tour whereby a PR agency hires a 3^rd party to book secure broadcast coverage in local media markets.

Such an argument is short sighted. This practice may work in traditional media, but PR agencies, interactive shops and marketing firms are all competing to claim the social media space as their own. To undermine PR’s competitive advantage in earned media and risk violating FTC guidelines by pursuing ‘pay for access’ tactics is not in the client’s or a PR firm’s interests.

Katherine Axt co-authored this blog post.