Friday, 23 October 2009

New FTC rules on disclosure of sponsorships, freebies, and discounts

On October 5th, the Federal Trade Commission announced new regulations and interpretive guidance effective 1 December 2009 governing "endorsements, testimonials, advertisements, and bloggers" in the USA or subject to US jurisdiction.

In general, the rules require that writers, including bloggers, must disclose to their readers any "material connections" with providers of goods or services that they "endorse".

The rules don't say anything specifically about travel writing, so it remains to be seen how the FTC will define an "endorsement" in the context of a travel writing or travel Web sites. But my guess is that a typical destination article recommending or featuring one or a few specific hotels, resorts, cruise lines, or the like (which I rarely write), or a Web site that lists selected travel service providers (and not a comprehensive list of all possible such companies), will be construed as an "endorsement".

As for what constitutes a "material connection" that must be disclosed, free services, gifts, or of course cash are clearly included. Discounts or upgrades given to travel (or other) writers aren't explicitly discussed in the new regulations, but I presume that if a writer pays less than fair market value for goods or services, the difference will be considered a "gift" that must be disclosed. I also assume that paid advertising, affiliate relationships, referral fees, or commissions (if, for example, a Web publisher or self-publisher is paid for each person who clicks on, or books through, a link to a specific hotel in their article or on their Web site, as I am for some advertisements particularly including those from Airtreks.com) are also included.

The new rules require such a disclosure in anything a writer publishes about such a company. It remains to be seen how prominent these disclosures will have to be, but it appears that even a Twitter message will have to include at least a URL that links to a disclosure page.

For most travel writers, photographers, and publishers these regulations will require changes in business practices, changes to Web sites and blogs, and possibly changes to work already in press but scheduled for publication after 1 December 2009. Even when writing for magazines and newspapers that don't allow them to accept "freebies", freelancers on assignment for such publications often get discounted "media rates" at hotels and resorts. (One of the dirtier secrets of publications that claim, perhaps truthfully, that their writers are forbidden to accept free travel is that they are permitted to accept discounted travel, even when it's almost free. At a discussion at last week's Bay Area Travel Writers meeting, a travel publicist told of arranging for a $10 a night "media rate" at a $200 a night hotel for a writer working within such a rule.) So if publishers comply with the new FTC rules, you can expect to start seeing disclosure and disclaimer notices at the bottom of most travel articles published after December 1st.

Freebies and junkets are a perennial topic for discussion among travel writers, which has been renewed by the new rules. (One of the more interesting of recent suggestions is that, "Desk reporting should be disclosed.... It might make sense to see a bit more of the following: 'This story was written from a press release and a short phone conversation with the resort's managing director. I've never been there and have no plans to go. So, act on this story at your own risk.'")

But as yet there's been little discussion, and almost no visible sign of changes being made in anticipation of the effective date of the new rules, in relation to the new requirement for disclosure of affiliate advertising links to providers of travel services -- the primary revenue source for most travel Web sites.

And then there's the question, not addressed by these rules at all, of the way the need to attract advertisers and keep them happy -- even if their ads are plainly identified as such -- shapes the content of most travel magazines and newspaper travel sections as well as a lot of Web travel content.

In general, the model the FTC seems to be following is the longstanding requirement for financial journalists to disclose -- in newspaper articles, on the Web, and when they speak on the radio or TV or at conferences -- whether they own stock in, work as a consultant for, or have any other personal financial interest in a company they are writing or talking about.

I think this is the right way to go, both as a matter of truth-in-advertising (the issue for the FTC) and professional ethics. Each of my books has included a "disclosures" page (my publisher thought it unusual, but actually supported this departure from house style when I proposed it), and I've added a similar Disclosures & Disclaimers page linked from every page of my Web site and blog. I think a requirement for full disclosure makes much more sense than an outright prohibition on writing about sponsored trips as has been the policy of some magazines and newspapers. I'll need to do more to make sure I comply with the letter of the new rules, but their basic principles are the ones I've always tried to follow. I'd rather see "full disclosure" rules than "no freebies" rules, and I think they would be more useful to consumers.

How are other travel writers, photographers, and publishers dealing with this? Are you changing your practices, or just changing how you disclose them? What do readers think that we writers and self-publishers should do? Should we accept discounts and/or advertising affiliate relationships? Refuse them? Accept them but disclose them? If so, how?

What do any of you think of my Disclosures & Disclaimers page?

Let me know in the comments or by e-mail, especially if it isn't clear whether certain links on this site are advertisements or affiliate links or purely informational.

Link | Posted by Edward on Friday, 23 October 2009, 22:01 (10:01 PM) | TrackBack (0)
Comments

Thanks for the clear and concise breakdown, Edward! Seems like a very complicated thing to try and regulate, but the spirit is certainly right. The discussion continues over on The Traveler's Notebook. Come join us: http://thetravelersnotebook.com/notes-on-writing/do-travel-and-leisure-style-no-freebies-policies-undermine-honesty-in-travel-writing/

Posted by: David Page, 24 October 2009, 08:50 ( 8:50 AM)

I am a travel and outdoors writer as well as publisher. I see no problem with the new ruling, except being certain that I understand it thoroughly and fine-tuning what we already do.

I can see, for example, that our button that says something like "support our website by clicking here to purchase through Amazon," might have to be stated in a less ambiguous manner.

I support full disclosure and have always tried to be very clear about any freebies I have accepted. Do coffee cups, tote bags, and pens count?

Posted by: Susan "Backpack45" Alcorn, 24 October 2009, 09:08 ( 9:08 AM)

Durant Imboden, writer and publisher of EuropeForVisitors.com, correctly pointed in an e-mail exchange that the original version of this article failed to mention that the FTC rules apply only within the jurisdiction of the USA. I've corrected that in the article above.

It can be hard for a writer or publisher, much less a reader, to tell whether a travel Web site is subject to US jurisdiction and thus to these rules. But in practice, many international Web sites are actually hosted on servers in the USA, or on "cloud" serving platforms that include servers in the USA. The fact that the contact address of the writer and/or publisher is outside the USA is probably irrelevant if the site is hosted in the USA, or if enforcement is directed at advertisers or sponsors in the USA.

There are, however, good reasons not to have a global travel site hosted in the USA. For example, any practical coverage of travel to Cuba could be construed by the USA as violating the rules against promotion or facilitation of travel to Cuba by "US persons", and could get the entire site shut down.

There are also reasons for a Web publisher to protect the privacy of visitors by operating their site under Canadian or EU privacy rules. And if the site is published somewhere other than in the USA, the copyright holder doesn't have to go to the nuisance or expense of registering copyright in the USA: under the Berne Convention and US copyright law, unregistered works first published in other countries (such as a web site or blog like this one hosted in Canada) have the same protection as registered US-published works.

It's difficult, though: Many hosting providers in other countries think they are doing their customers a favor having mirror servers in the USA. This site is hosted in Canada by a company not subject, or so they have told me, to US jurisdiction. But that wasn't easy to find. Most of the Canada-based hosting providers I looked into turned out to have a physical presence in the USA as well.

Posted by: Edward Hasbrouck, 24 October 2009, 10:10 (10:10 AM)

Susan Alcorn asks, "Do coffee cups, tote bags, and pens count?"

I'm not a lawyer, and my guess is as good as yours as to what the FTC intends. But I did mention swag including tote bags and pens in my new "Disclosures & Disclaimers" page:

http://hasbrouck.org/disclosures.html

Posted by: Edward Hasbrouck, 24 October 2009, 10:19 (10:19 AM)

Thanks for your thoughtful post on Disclosures & Disclaimers.

Here's how I handle this on my "What a Trip" website:
http://www.nancydbrown.com/advertising/

I'm also a Lodging Editor & mention "hosted" trips on my reviews:
http://lodging.uptake.com/blog/sheraton-kauai-resort-located-on-hawaiis-poipu-beach.html

Posted by: Nancy D. Brown, 24 October 2009, 20:19 ( 8:19 PM)

Blog with Integrity is holding its next webinar on Disclosure on November 10th at noon. Our special guest will be Mary Engle, from the FTC. The format will be town hall style; Mary will be answering questions submitted in advance from bloggers about the guidelines. I urge you to send your questions to us here at blogwithintegrity@gmail.com . Deadline is Friday November 6 to submit your questions, and please put "FTC Webinar Question" in the subject line.

We'll have information on the website at http://www.blogwithintegrity.com and please feel free to spread the word.

Best,
Susan

Posted by: Susan Getgood, 29 October 2009, 06:29 ( 6:29 AM)

I think it makes complicated for travel writers/bloggers to talk. There's nothing bad with recommendations for real good things (freebie, promotions, good value tips...), and they are helpful to readers to create another great memory of their own journey.

Posted by: Jean - OurExplorer Tour Guide, 30 October 2009, 06:23 ( 6:23 AM)

Why bloggers and not print pubs, or TV shows? It seems like they skipped a step.

I just came from a blogging summit at a gear company's headquarters. Nobody was taking this seriously as it seems utterly preposterous that they would have the manpower to police this in any meaningful way and the rules as written are not very helpful. I think this is going to make for some really annoying reading if every affiliate link and item furnished for testing has to be disclosed.

I'd rather have a review from someone who got a hotel room, book, or jacket for free than a review from someone who just rewrote a press release. The market does a pretty good job of sorting the shills from the legit writers anyway, as does Google. If people aren't trusted, they aren't followed.

Posted by: Tim L., 30 October 2009, 20:24 ( 8:24 PM)

Tim Leffel asks, "Why bloggers and not print pubs, or TV shows? It seems like they skipped a step."

Don't take it personally, Tim. It's not just bloggers. The new FTC rules have gotten a lot of notice in the blogosphere, but they apply equally to all media including books, television, etc. There have been some reports suggesting these rules are only for bloggers, leading understandably to confusion. But the people who "skipped a step" are the people who wrote about the rules without reading them.

Posted by: Edward Hasbrouck, 31 October 2009, 08:00 ( 8:00 AM)

Over at http://thetravelersnotebook.com/notes-on-writing/do-travel-and-leisure-style-no-freebies-policies-undermine-honesty-in-travel-writing/ , Bob Berwyn asks, "Are travel journalists different? Should they be exempt from journalistic standards? If so, why?"

There are lots of unique aspects to travel writing (as there are to many other genres). But on these ethical and journalistic questions, I think travel writing neither is nor should be subject to different standards than other journalism.

Business journalists for many reputable news outlets are *allowed to write* about companies in which they own stock, and are *required to disclose* that ownership in their stories. The same standards (allowed to write/required to disclose) should apply to travel writers for the same publications, and in our self-published work.

I think part of the reason many publications have been able to get away with treating travel journalists writers differently than some other types of journalists is that (1) not all travel *writers* are travel *journalists*, or want to be journalists (nor should they necessarily, if for example they are writing travel stories that are to be marketed as stories not journalism, in competition with novels not news), and (2) those of us who consider ourselves "travel journalists" haven't always held ourselves to the same standards as other journalists, making it harder to claim the same status as journalists. If we want to be treated as journalists, we need to take ourselves seriously as journalists, and walk the walk.

I don't think travel writers will win any arguments with editors about whether they should be allowed to accept junkets by saying, "But travel writing is different." A more persuasive argument would be, "I should be treated like your other reporters. I disclose my personal financial interests in all my stories, just like your business reporters, so I should be allowed to write about companies in which I have a disclosed interest, just as they are."

Posted by: Edward Hasbrouck, 31 October 2009, 08:23 ( 8:23 AM)

I guess I missed that part in all the bloated bureaucracy language, and magazine editors think it doesn't apply to them, so far anyway.

This is going to get really ugly if they find the resources to enforce it. Literally and figuratively. Can you imagine if a TV morning show with a tight time schedule had to disclose every ad relationship, product placement sponsor, and item received for review? That would be
the whole space between commercials.

The real question is, who pays for review items of anything? Apart from a few pubs like the Wall Street Journal and Consumer Reports, it's way beyond their budget to rent every car, buy every CD or book, buy every new smart phone that comes out, pay for every concert ticket, etc. etc. So they would cut back or eliminate that column/section. Which does nobody any good: pub, seller, or reader. Odd outcome for something advanced by the Federal TRADE commission.

Everybody I'm talking to in person on both sides thinks this is a joke and it'll never be more than hot air. Including a big outdoor apparel company where I just spent a few days (and got stuff to review of course). "It's bad for business, which means it'll get reversed before it gets started," said one division head there.

Posted by: Tim L., 31 October 2009, 16:15 ( 4:15 PM)

"Blog with Integrity" (which I endorse) is organizing an online Q & A about the new rules on 10 November 2009 from noon-1 p.m. EST with the FTC's Associate Director of Consumer Protection.

More information and links to additional FTC advice and resources are at:

http://blogwithintegrity.com/webinars.php

Posted by: Edward Hasbrouck, 2 November 2009, 16:08 ( 4:08 PM)
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