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October 19, 2005

Endorsement Without Disclosure: Commercial Alert FTC Letter Points To P & G and Buzz Marketing

Commercial Alert sent a letter to the FTC yesterday about their concern regarding the evolving buzz marketing industry and how several companies including Proctor and Gamble are conducting their word of mouth campaigns. Gary Ruskin, the executive director of the organization writes a very compelling letter. It is the law of the land that if someone is going to endorse a product and they are paid to endorse that product, the person should acknowledge the payment. I wrote about a similar issue several months ago on my personal blog PR Communications, “blogger endorses product without revealing payment?.

Gary is correct, a company should ask its paid agents to inform consumers that they are being paid by a company. However, I wonder about the exact circumstances around the Proctor and Gamble Tremor program. Here’s more detail about the Tremor program from a Chief Marketing Officer article, “Making Waves.? Tremor is a service provided by Proctor and Gamble, Tremor sells its marketing research or promotional services to other companies. Looking at the FAQ for Tremor participants I did not see anything about being paid to participate in the program, though I did see that participants gained access to products and special events.

Does P&G pay the program’s participants to take part, and if they do what training do they give to each participant in how they describe their relationship to P&G. I know that BuzzAgent a locally based Massachusetts company changed their rules about their agents notifying consumers in recent months, see more on this issue on PR Communications.

I wrote to Gary Ruskin to ask him if he had contacted P&G and he told me he had not. When I originally read a news article on USA Today quoted on the commercial alert site, I wondered if Gary’s organization was just attempting to make some noise and publicity for their own organization. However, after I read Gary’s well-researched letter to the FTC I thought he had some great points, and that he was correct in saying any program that asks agents to endorse products without revealing payment should be investigated, as they may be breaking existing laws. But for the life of me, I cannot understand why Gary could not have approached P&G and asked them if they are paying people to endorse their products and their customers’ products. It seems like a simple step to me.

Not to be discouraged, I contacted P & G’s communications department this morning, and Tami Jones, from P&G Corporate ER told me,

“P&G does not compensate any participants, there are no cash payments, some programs for our clients do involve free samples, but that is because people have to see the product to get an opinion about a product.?
I asked Tami if P&G provides any training to participants on how to advocate a product. Tami said,
“We don’t provide any training, actually we don’t encourage, or discourage participants to talk about the products. We don’t require participants in the Tremor program to promote or endorse the product. We see the Tremor program as a teen word of mouth advocacy program; participants are informed and not compensated for taking part.?

It seems pretty clear to me that P & G is not paying people to endorse products and therefore is not breaking the FTC’s rules. Gary do you have further comment on this issue, exactly what rules is P & G supposed to have broken? Where’s your argument with P & G. Although I am not above contacting several Tremor participants to ask them if they received any compensation for taking part in the program, I thought comments from a Tremor participant on this ad-rag.com blog post indicate that members are fully aware of the relationship with P & G.

Update: WOMMA opposes stealth marketing, the word of mouth marketing association reacted to Gary Ruskin's letter to the FTC by clarifying their definitions of buzz marketing and stealth marketing.

Thanks Adrants.

Posted by johncass at October 19, 2005 12:04 PM

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» Note to Consumer Alert: Truth in Marketing Applies to You Too from The Basement
John Cass of BackboneMedia birddogs Consumer Alerts claims. Specificall, he called P&G and asked if they paid their teen WOM advocates. From his post... Not to be discouraged, I contacted P & G’s communications department this morning, and Tami Jo... [Read More]

Tracked on October 19, 2005 2:00 PM

Comments

John when I read about this I thought the same thing you did, if the Tremor participants aren't being paid, then Commercial Agent has no compliant that I can see. P&G has flatly said that their Tremor members aren't paid. Now if CA can show that P&G DOES pay Tremor participants, then they've got a story, but till then this seems to be smoke and mirrors.

Posted by: Mack Collier at October 19, 2005 4:27 PM

Posted by: John Cass at October 20, 2005 11:01 PM

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