Saturday, April 11, 2009

Blogging, Liability and you...

How many of you have been on design teams for scrapbooking where you were given products to work with and then asked to write a review for a newsletter or blog? How many people have won a product simply as a site "random pick" and then blogged about their win and the item(s) they received? How many of us have received product from a company (directly or indirectly) and written a bad review of said product?

Well, we need to all think about how we're addressing these things from now on. Apparently, the FTC is trying to regulate "information" as a result of these poor economic times. They are now indicating that even blog and social websites are creating some probles for companies and their abilities, or inabilities, to market and sell some of their products. The new regulations will not only limit the amount of information available, but, in my opinion, put limitations of the veracity of the same.

In an article in the Financial Times (April 2, 2009), these new guidelines, which are expected to be adopted, will hold bloggers, social websites and their members, owners and anonymous posters liable for comments made about products having been received "free".

For example, say Company A sends out free product to a web site for free as a "Product Sponsor". Anyone who's been on a blog or web team before knows that we are more than extremely grateful for the product, we review it on the site, on our blogs etc. What is going to change about that now is, if we make statements regarding that product that are false, though in our opinions are true, or in our cases are true, the veracity of that statement as a generalization may not be true and therefore cannot be claimed as such. The end result is we have now "lied" and can be held legally responsible for any ramification that occurs as a result of our generality.

Let's get more specific. Say I got a package of product from Company A and said in my blog, "This product is simply amazing. The 90lb paper, printed with such original patterns and with amazingly vivid colors, tears beautiful with no rough edges!"

Person Z (yep, 26 out of 26 people reading that review), took my words to heart, bought the paper and got a paper cut on her eyeball when she accidently turned to admonish her little one who was about to grab a pot of spaghetti sauce off the stove and not only bled profusely but lost the sight in her eye. She could not only SUE me but also the company for making liablous statements. Oh yeah - you heard me right. SUE me for making false statements that caused her to make this purchase. And not only me but the company too.

The new regulations stipulate that companies are now to be held responsible for comments made by persons who have received "free" product and make statements about said product as a result of having received it.

It used to be that new products came on the market, in nearly any genre, and many gifts were given out, dependant to a degree on the word of mouth advertising. This still occurs today with companies setting up booths in grocery stores, open markets, malls, and having open houses. Having a celebrity or specific groups tout the accolades of a product could launch an orbital effect for a company. The FTC is revisiting these opportunities for the first time since the early 80's when our last recession was present.

I am currently in the process of trying to procure some "free product" for a blogsite for which I am teaming. In this process, I've consistently run aground in my attempts. Mostly it is because, economically, they cannot let go of the product right now as there are MANY teams that are asking and you just cannot outfit everyone. The majority of these companies will save their gifting targets for the sites that are among the top 100. Some even regulate their gifting to the top 50. It's becoming more and more difficult for the little guys to come up with the prizes for their monthly contests to lure folks to their sites so they can "compete". We can't all offer monthly project contests that offer a prize valued at $30 or more. In fact, most of them, if you think about profit margins, don't gift in excess of $15 wholesale which looks like $20-$25 retail. Some of the more extravagant and financially stable have gifted in the hundreds in order to have enough for an entire team at one time.

To further limit these groups by now holding the members, owners, random bloggers and companies liable for personal remarks made by the gift recipients is just sad. To hold the donating companies liable for the same is ludicrous. They are not responsible for feelings and thoughts by the masses. They can't control whether or not someone says the paper is a great weight, or too flimsy any more than the lady who loved the paper and said it never gave her paper cuts can be responsible for the lady who lost her eye because of a paper cut from the same paper. Neither could have known that would happen. Paper cuts happen every day and no paper manufacturer has been held responsible for freak accidents that happen with a sheet of paper. While the example may sound severe, it is a viable scenario for which the FTC is preparing their new regulations.

Of course this is not just for scrapbooking products. Take the example in the Financial Times article. Customer A bought a new handcream that, for some reaon, worked on her exzema and she incorrectly made claims to such in her blog. As a result of these false remarks, both she and the company could be sued for false representation. Is this not the same?

As difficult as gifting is already, I think we are looking for several things to happen. Gifting will not continue on the level at which is has in the past, not just because of the economic impacts it may currently have by giving away rather than selling the product; but also because of the impact any statements that MAY BE MADE IN THE FUTURE could have. Another impact will be that these companies that have given away product as a method of advertising will no longer have these write offs from their taxes. Which brings us to another point.photo from Scrapbooking365.com

This can potentially establish a whole new relationship between gifting companies and the little people. Take this illustration if you will...

Scrapbook Store or Mfg #1 donates package of material to site 1.

Site 1 gives some of said package to team to use for promoting the sponsor and some is reserved for a monthly prize winner. All of this information is shared on a monthly newsletter, personal blogs for the team mates, site blog and the personal blog for the prize winner.

Prize winner now uses said product for another contest and wins! In the supply list, the creator lists said won product. Not only does she win this product but uses the new product to win yet another contest.

Readers of the winner's blog reads about the win, sees the new creation, likes the product and buys it from an on line site or local scrapbook store to be used in his/her own projects. The blogger has also won more product resulting in less money leaving his/her hand again.

Everyone wins financially. The originator of the product SPENT product in advertising their company. The recipient of the original gift spent the product promoting their site and contest. The winner of the contest spent his/her winnings winning another contest resulting in more financial gain through more product. The originator of the product for the site first recipient has an increase in traffic and spending as a result of sponsoring the site to begin with. The manufacturer of the product gets new buyers for that same product as a result of more people seeing it on winning projects. In essence, they are all in receipt of "money" that should be claimed as income so therefore everyone becomes an advertiser and thereby an employee of the company. This also changes the dynamic of gifting.

I suppose all this ranting leads me to this: I totally agree that there are many companies (not necessarily in the scrapbooking industry but industry period) that have relied on the masses for advertising and have made substantial financial gain from what is called "shilling". Shilling is the viral marketing of product by those who tout the accolades of products with no apparent financial gain. This has saved these companies thousands if not hundreds of thousands in marketing costs. While it may not be the best practice, it's saavy and lucrative. They used the masses - word of mouth - as a means to their marketing end. I'm sorry but, why not? We've all done it. It may be small, "Did you taste Martha's pie? Best in the county! We really need her recipe for the church recipe book." Martha gets to feel awesome, the church makes more money because who wouldn't pay a little bit for Martha's famous pie recipe and everyone wins. Then again, it may be huge! Bill Gates got started some how too didn't he? He didn't always have a big advertising budget. He worked really hard to develop an amazing product and took it to the powers that be and made it an industry standard. The people who worked with him and their relatives, friends, and others aware of their product and efforts all talked it up. Who would have thought Microsoft would be a word spoken by the very young all the way through the "pretty old". My dad, at 82, knows what Microsoft is and not just because it was stock market talk or in the financials for the last 30 years. He uses a computer every day and even surfs the net sometimes.

My point is this. personally I think it's insane to hold companies responsible for little people with whom they are not even remotely acquainted responsible for "false statements" made about their product. I think it's insane to hold the little guys responsible for making statements that held true for themselves across the board liableous. I think it's insane to hold the middle man responsible. People have opinions. We are entitled to our opinions based on the First Admendment right to freedom of speeck. We are not intentionally making false statements so as to cause financial hardship on any said company. If we, as a nation, have stopped responding the our First Ammendment rights and are more interested in trying to find liablous statments being made so we can sue someone and make our quick fortunes, then we're REALLY off track.

What is wrong with us that we are no longer allowed our rights to speak our minds? Making a statement such as "Wow! This product perfoms perfectly everytime! I've used this over and over for three months now and my blade is just as sharp today as the day I bought it." should not be misconstrued as factual across the board. It should be considered exactly what it is. Someone's experience with a product they find to work for them. If someone else purchases the same product and finds a different scenario, then they should also be entitled to write something they feel. "I'm glad this person found this product to be a good one. Unfortunately, I have discovered my blades to dull much more rapidly than any other similar product and have decided it is a waste of money. I'll stick to my tried and true "X" product from now on." Aren't readers of the second statement just as likely to respond to the "X" product as they were the first? Isn't it really a matter of personal preference? It's not endorsement of an entire product line, an entire store, an entire manufacturer or even an entire parent company of products. It is simply our experience with that one item. Take it or leave it.

Opinions are like people... Some of them are nice and some of them aren't so nice but more than that, they're all different and subject to interpretation based on our own expriences.

9 comments:

Ronnie McCray said...

Very informative! I didn't know all of this was happening! Keep your chin up, though!

Auntie Em said...

Just one more example of our freedoms being infringed upon. Remind your Representatives and Senators WHO they work for. There are also moves to control internet access, who knows where that will lead.

stamprgrl said...

I can't believe they are going to do this!

-- dalis

there goes any "good" newsletter from little stores... down in the toilet!

Julie said...

Oh good grief what are they going to think of next?

Holly said...

America doesn't seem like America anymore with things like this happening.

BunnyKissd said...

That's a scary thought Lissa!

BTW, I've just given you an award! Drop by to pick it up...

Billie said...

Wow! So much for 'freedom of speach' in America. I hope it doesn't come to this!!! Public officials need to realize that they are hurting EVERYONE when they make such ignorant changes...which in turn makes the economy worse. When will they learn!?!

kc_froglady said...

nicely stated - what has happened to our basic of freedoms FREEDOM OF SPEECH!

Tara O'Rourke said...

thank you for posting this...and keeping us at least informed