This yesterday from the Financial Times (FT.com):

Revised guidelines on endorsements and testimonials by the Federal Trade Commission, now under review and expected to be adopted, would hold companies liable for untruthful statements made by bloggers and users of social networking sites who receive samples of their products.

The guidelines would also hold bloggers liable for the statements they make about products.

If a blogger received a free sample of skin lotion and then incorrectly claimed the product cured eczema, the FTC could sue the company for making false or unsubstantiated statements. The blogger could be sued for making false representations.

“This impacts every industry and almost every single brand in our economy, and that trickles down into social media,” said Anthony DiResta, an attorney representing several advertising associations.

(Read the whole article).

Ok, so the libertarian in me cringes at the thought of the federal government regulating- or even attempting to regulate- what private citizens can and can’t say about products they try.  Even more ridiculous is the prospect of the federal government suing a company for the testimony of a consumer.

Let’s lay all of that aside, however…

This really comes down to the difference between a brand-centric approach and a consumer-centric approach.  The old model, which tends to be brand-centric, believes that the consumer will follow, in a quasi-pied-piper-esque view of the market, if only the brand speaks loud enough, clear enough, or with the right words.  The new model, which tends to be consumer-centric, believes that Mr. and Mrs. Consumer and their Consumerlings are smart and cynical and that they can only be truly engaged through a positive, authentic, and relevant experience.

In the past decade new technology has given rise to new, improved, and far-reaching ways to create word of mouth advertising.  Blogging and social media are just the latest craze in this chain of tools.  The brand-centric camp uses these tools to push information at the consumer, and herein lies the issue.  A perfect example of this is the 75 spam comments I had waiting for me when I logged in to post this entry…really, get a clue…

That said, I do not agree with the FTC’s solution to the issue.  I do, however, agree that the issue is real and should be addressed.  From the article:

“The guides needed to be updated to address not only the changes in technology, but also the consequences of new marketing practices,” said Richard Cleland, assistant director for the FTC’s division of advertising practices. “Word-of-mouth marketing is not exempt from the laws of truthful advertising.”

Well said.  Further:

The main target of the new guidelines appears to be the widespread practice of viral marketing in which companies recruit non- employees to talk up products in exchange for samples or promotions.

Here’s the problem I have with the FTC’s solution (aside from the fact that you can’t legislate responsibility):  word of mouth is based in the individual experience, and individual experience is highly subjective…almost entirely so.  What’s good for the goose is not always good for the gander, if you will.  If we, as brand managers, give the same product to 10 people and ask them to share their experience, we’re likely to get 10 different stories.  Sure, there may be some common threads, but the experience will vary.

This cannot and should not be regulated.  This is good, effective, authentic marketing in the modern world.  Moreover, it’s what Mr. and Mrs. Consumer and their Consumerlings want to find when they Google you.

On the flip side, if we, as brand managers, give the same product to 10 people and then tell them what to say, having stretched the truth and tainted the testimony, then we’ve contributed to the noise, and have failed to do anything that is, in the long-term, relevant.   This can and should be policed.  But, IMHO, the consumer will ultimately be the best policeman of this sort of marketing.

So, as marketers, “to lie or not to lie” ultimately answers the consumer question of “to buy or not to buy.”  If we lie, then they won’t buy.

It’s a given that the FTC won’t leave it at that.  My only hope is that, in the well-intended aim to regulate untruthful content, they don’t over-step and try to regulate testimony that is based on subjective experience.