D-Bone
Dec 14th '06, 01:24 PM
Source: http://www.dailytech.com/article.aspx?newsid=5337
The U.S. Federal Trade Commission (FTC) announced this week that companies that engage in viral marketing -- also known as word-of-mouth marketing -- must disclose who they are representing or who they work for. For example, if someone on a bus started talking about AMD processors, they must reveal to those who are llistening that they are from AMD. Similarly, other forms of viral marketing are under watch now as well. Blogs, web pages and other forum posts are all part of viral marketing too, and the practice has picked up over the last several years.
The problem with marketing these days is that most consumers are finding it more difficult to believe. Exaggerated numbers, obscured specifications and other vague product detail are contributing to the reason why consumers now only trust word-of-mouth recommendations. Unfortunately, many companies are aware of this and have paid people to practice viral marketing. Sometime a weblog may not be a true personal weblog at all. A user on a popular forum may actually be an employee of a company that they are speaking about in a positive light.
The decision by the FTC follows a case where Sony had hired a group of 60 actors pretending to be regular consumers. On a "touring" trip around New York City, the actors asked randomly passing people to help take photos. It was then that Sony's SE T68i phone was used and its features demonstrated. The actors themselves never revealed that they were actually contracted by Sony. This type of marketing could become illegal quite shortly.
Consumers face a barrage of purchasing choices on a daily basis. The fact that there are many companies out there pretending to give out unbiased information is definitely disheartening as well as frightening. The FTC told reporters that it would investigate such cases and seek appropriate action.
The U.S. Federal Trade Commission (FTC) announced this week that companies that engage in viral marketing -- also known as word-of-mouth marketing -- must disclose who they are representing or who they work for. For example, if someone on a bus started talking about AMD processors, they must reveal to those who are llistening that they are from AMD. Similarly, other forms of viral marketing are under watch now as well. Blogs, web pages and other forum posts are all part of viral marketing too, and the practice has picked up over the last several years.
The problem with marketing these days is that most consumers are finding it more difficult to believe. Exaggerated numbers, obscured specifications and other vague product detail are contributing to the reason why consumers now only trust word-of-mouth recommendations. Unfortunately, many companies are aware of this and have paid people to practice viral marketing. Sometime a weblog may not be a true personal weblog at all. A user on a popular forum may actually be an employee of a company that they are speaking about in a positive light.
The decision by the FTC follows a case where Sony had hired a group of 60 actors pretending to be regular consumers. On a "touring" trip around New York City, the actors asked randomly passing people to help take photos. It was then that Sony's SE T68i phone was used and its features demonstrated. The actors themselves never revealed that they were actually contracted by Sony. This type of marketing could become illegal quite shortly.
Consumers face a barrage of purchasing choices on a daily basis. The fact that there are many companies out there pretending to give out unbiased information is definitely disheartening as well as frightening. The FTC told reporters that it would investigate such cases and seek appropriate action.