If you’ll recall from my blog series back in February, the Federal Trade Commission (FTC) recently enacted guidelines for bloggers’ disclosure of gifts and other forms of compensation.

Last week a Daily Online Examiner article revealed that Ann Taylor Loft received a warning letter last week from the FTC after they provided bloggers with gifts at a January preview of the retailer’s summer line. The warning highlights the importance that bloggers disclose all material connections to companies they write about.

Other companies may not be so lucky to get away with a warning. According to the article, Ann Taylor took a few steps that prevented it from being reprimanded more severely. They posted a sign at the preview requesting that bloggers disclose the gifts if they posted comments about the preview, although the sign may not have been easily seen by all bloggers. Luckily for Ann Taylor, many of the bloggers did disclose the gifts and Ann Taylor put in place a written blogger disclosure policy shortly after the preview.

The fact that the FTC sent the warning letter to Ann Taylor indicates that they are actively investigating companies who may not be taking their guidelines seriously. It is very likely this is the first of many warnings and reprimands the FTC will make as their investigations move forward.

Is your company doing its best to comply with the guidelines? If not, it may be time that you consider implementing a social media policy and training your employees on what your expectations are for marketing via social media. As we learned from this example, simply having a corporate social media disclosure policy in place helped Ann Taylor avoid major fines and repercussions.

First, cases from Kmart and Wal-Mart illustrate how companies and bloggers have chosen to or not to disclose material connections and payments for endorsements in the past.

Kmart generated significant positive word of mouth from its 2008 holiday season blogger campaign. Six bloggers received $500 gift cards to post entries about their experiences at Kmart, positive or negative. Each post was identified as a sponsored post. Each blogger was able to give away an additional gift card to one of their readers. For readers to enter the contest to win a $500 gift card from the bloggers, the reader had to promote the contest and Kmart to their Twitter followers or post a blog comment with the item they wanted most from Kmart. This was done more than 3,000 times on blogs, yielding 600,000 network connections. It was also tweeted more than 3,000 times on Twitter which generated considerable discussion.

In contrast, Wal-Mart created a stir with its sponsorship, through Working Families for Wal-Mart, of a blog where disclosure was not apparent. In 2006, a couple made a cross-country trip across the U.S. in an RV, parking at Wal-Marts for free. The couple started a blog called “Wal-Marting Across America”, which frequently posted stories of Wal-Mart employees they met along the way. All of the featured Wal-Mart employees only had positive things to say about the controversial corporation. Wal-Mart denied hiring the couple, but it turned out that Working Families, which received funding from Wal-Mart, decided to sponsor the couple’s entire trip when it learned about their plan. Working Families paid for the couple’s flight to Las Vegas to pick up the RV, extended the trip’s duration, provided an RV emblazoned with the Working Families logo, paid for the gas, set up the blog and paid the woman to write blog entries. While there is a Working Families banner on the blog, nowhere does it disclose that Wal-Mart sponsored the trip.

The differences in disclosure between these examples (and many others) illustrate why the FTC may have decided to create regulations around endorsements and testimonials.

The Vandiver Group is working with the Word of Mouth Marketing Association (WOMMA) to help the industry understand and apply these new guidelines. Donna Vandiver serves on the Membership Ethics Advisory Panel and you can learn more about the guides at the WOMMA web site.

Check in next week to discuss the impact the regulations may have on your business.

There was a reoccurring topic among presentations and participants this year- measurement. 

Measurement and return on investment is a concern for every business function, and this applies to word-of-mouth and social media communications.  Just as with traditional public relations and marketing, social media ROI does not always have a clear cut definition.  At the 2009 Summit companies and organizations continued to share their best practices for ROI within social media. A few key takeaways:

• A greater level of ROI accountability is being placed on social media programs as budgets are expanding into 2010 and more investment is being made.
• Engagement number (such as page views, number of members, comments) does not equal ROI. ROI is a business result, such as earnings, decreased expenses, etc.
• Social media benefits are often long-term and don’t fit into the short-term measurement lenses of traditional communications.

There is so much information and ideas around measurement and metrics in social media that WOMMA has developed a new guidebook for best practices and lessons.   Go to the WOMMA site to download the guidebook and I’ll continue to share some of my favorite info I discover here on the blog.

Now, the FTC is proposing regulations for online endorsements and testimonials. The PR and social media world is buzzing with news of the guidelines. A final ruling is expected later this year. The proposed guidelines place personal liability on bloggers and marketers for false testimonials and require clear disclosure of any relationship between bloggers, advocates and marketers.

The Word of Mouth and Marketing Association (WOMMA) recently reviewed and amended its code of ethics that addresses some of the issues surrounding endorsements and testimonials. This review was to ensure WOMMA members and industry leaders follow and understand ethical practices, as well as abide by future FTC guides.

TVG is a member of WOMMA and I serve on the WOMMA ethics committee that helped review the codes. In order to most clearly address the upcoming FTC guides, the committee amended the WOMMA code to read, “We stand against marketing practices whereby the marketer or its representatives provide goods, services or compensation to the consumer to make recommendations, reviews or endorsements without full, meaningful, and prominent disclosure.”

To learn more about the practical applications of current regulatory and legal events surrounding word of mouth, including the FTC’s proposed endorsement and testimonial guidelines, visit WOMMA’s new blog, DiResta the Law.

Instead of providing a long synopsis on some of the lessons learned, I wanted to share a few of my favorite tidbits and tweets from presenters and attendees.

I hope these tidbits get your mind going about interactive marketing and social media within your organization. For more of a wrap-up from WOMM-U, visit their conference Web site.

The social media realm has really taken media’s center stage over the last 12 months. With the boom of Twitter and growth of social networks among older demographics, companies everywhere are not only starting to take notice, but they are making room in their budget for social media programs.

What WOMM-U demonstrated was companies are also starting to understand the unique qualities of this medium, especially the need to put some of the control into the consumer’s hands. The common mistakes of controlling the conversation over the past few years seems to be fading and companies are truly embracing the conversations…and it is paying off for their business!

In the current economy, networking and personal interactions may be more important to business development than ever before. Strong employee networks can help increase awareness of your company. Here are some tips for how to make networking work for you.

1. Create a targeted strategy. As any good chess player knows, tactics without strategy might accomplish advancement, but it may not provide the best path to continue on. Identify which types of organizations and events employees will enjoy while providing connections to persons you want to know about your company. A focused approach to networking ensures participation in relevant professional organizations by the most appropriate employees. Strategic networking decisions with consideration of individual employee interests and personalities can be a smart investment of time and money for your organization.

2. Research potential organizations. Research industry-related organizations and regional committees to learn about their goals, activities, and required time and monetary contributions. Determine their meeting dates and times and create a listing where employees can sign-up to attend.

3. Actively engaged employees embrace networking opportunities. When one member demonstrates enjoyment and benefit from belonging to an organization or attending an event, other attendees feel their enthusiasm and are more willing to speak with them. Be sure that your employees enjoy their professional organizations. If they don’t, perhaps you can recommend another organization that is more up their alley.

4. Social networking is important too. LinkedIn and Facebook are two of the most popular networking tools that not only create connections between friends and family, but also provide insights into extended networks of colleagues and business partners. Employees who list your company’s name on their profile helps increase awareness with others they are networked to. Your company should ensure that if it is listed on an employee’s social profile, that the employee represents the
company in a positive manner consistent with the company’s values.

5. Encourage community involvement. Personal community involvement of employees helps them meet people and network through social circles. Employees who are excited to contribute to their own communities are an excellent form of word-of-mouth and awareness of their company.

If you’re trying to increase awareness of your company, networked employees can be great building blocks. Best of luck utilizing these tips to engage your employees and increase your networking opportunities. If you need help devising a community engagement strategy with networking initiatives, please contact us at tvg@vandivergroup.com.

Start your week off on YouTube to learn about past marketing campaigns, start a conversation in your office or just get your creative juices flowing with a good laugh. Enjoy.

The Now Sprint Commercial. Ok, I really saw this on TV first, but then saw it again on YouTube. This is a great example of a company appealing to the social media savvy while still reaching old-fashioned media audiences who watch television instead of chatting on Twitter or Facebook.

Will it Blend? This YouTube campaign has been around for a while, but I just learned about it last week from a blog post by Zeus Jones, “The Best Social Media Marketing.” The people at Blendtec bring energy, humor and interest to a product as simple and everyday as a blender. With almost 3.5 million channel views, this proves social media can benefit just about any business- it is not just for the tech and teen products.

Network- Turn off your TV! Ending with something entertaining and thought provoking. I found this video thanks to my younger brother’s personal blog. The clip from the 1976 movie is cynical yet inspiring, and still applicable today. The brilliant performance by Peter Finch brings to mind today’s media conglomerates, closing news companies, rumors of Google and other vying to buy Twitter, the changes of how we communicate with each other and much more.

I find when you limit yourself to the task at hand, you may not be as successful as you’d hoped. In this tough economic time, it would have been just as easy to stay home and do a conference call or webinar. However, there is no substitute for a face-to-face discussion or to see first hand some new product or service put to the test. Not only did I see some of TVG’s clients and meet new people, but I benefited from viewing some of the newest recycling products, technology and services, something that could help TVG clients now and in the future. Cutting back isn’t always the answer. Sometimes just by taking the extra step in business, one thing can lead to another.

I also recently attended the Word of Mouth Marketing Association’s “WOMM-U” conference in Miami FL (May 8-9). I joined several hundred other attendees who benefitted from senior practitioner “perspective pitches,” case study presentations, and a half-dozen or so breakout sessions, all full of the latest in WOM information on research, trends, best practices, measurements, and so on.

But beyond the PowerPoint decks and the flip-charts at the conference, as a first-time attendee I heard a drum beat of three themes that seemed to arise and be sustained throughout the event, in activities both on the agenda and off. I’ll call these the “3 C’s” for Community, Conversation, and Continuous.

Community: Using the technology involved in social media, like blogs, web networking sites, chat rooms, etc. Participants identify and define themselves according to their interests and “affinities.” They form communities with others of shared interests and characteristics. They form relationships with each other via the social media, and these relationships involve many, if not most, if not all of the same characteristics of other communities—common language, pride, trust of those like them, distrust of those who are not, vigilance about strangers, and willingness to help their neighbors through input, advice, and suggestions regarding what’s worked for them, among other characteristics.

Conversation: In the parlance of social media, communicating means “having conversations.” From what I could tell both in formal presentations at the WOMMA conference, as well as in side chats with fellow attendees, “conversation” is basically the ONLY way one refers to a communication that occurs in social media. This seems to make a lot of sense, given that people who exist together in a sense of community tend to “communicate” with each other, vs. “target key audiences with well-honed messages.” As people, they converse in a transactional way—about things that are of interest or concern to them. There is a sense of trust involved where participants converse with each other openly, expecting that it’s safe to do so because of the sense of community they enjoy.

Continuous: The nature of the social media technology and the way members develop and participate in their community means that their conversations are relatively continuous. Community members don’t just come in to sell something…they are there…day in, day out, week after week. Expressing a continuous interest in the community through continuous engagement, continuous learning and continuous sharing. Continuous participation in these communities builds trust, and credibility, and makes it more likely that community members will see a communicator as someone who’s trying to add TO the community, vs. take FROM it.

These three themes, the “3 C’s”, caught my attention because they represent a stark distinction from the way we communicate via traditional media, and the way we structure our marketing efforts and measure success in traditional media. While I sat in session after session at the conference, I kept thinking over and over, that communicating through WOM, and using social media, means re-thinking most marketing communications approaches top-to-bottom.

Contact us at tvg@vandivergroup.com or send comments to blog@vandivergroup.com.

Repping TVG was Kelly Ferrara (me) and Larry Cox from the Executive Leadership Team. The conference focused on how to add value in the message delivery process for a brand by using word of mouth tactics. What I learned is that WOM, while it can be described as a stand-alone practice area, really is part and parcel of all good marketing. Don’t we do media relations not only so that the reporter covers a story about a client, but also so that someone says to someone else: “I was listening to KWMU this morning and heard the most interesting thing…”? We want to give these messages life!

There are some intentionally crafted campaigns that were highlighted in the conference as WOM, yet I found it interesting that each one included tactics from direct mail, advertising, PR, facilitation skills, strategy, internal communications and research. We heard from Houlihan’s Restaurant on how they created HouliFans to assist in their entire rebranding process from menus to silverware. We heard how O.P.I. relied on She Speaks to generate conversation among a targeted group of influential women in an online community who have volunteered to receive client pitches and then pass along the information they get through samples or experiences. And we learned how Carnival Cruise Lines became The Fun Ships mainly because of a crisis experience when a ship ran aground, and the bars and clubs reopened to keep their passengers busy and happy. They now have shifted nearly all their traditional (TV) advertising to an online community-based marketing process to capture market share and help people plan “fun” trips.

My favorite part of the conference were those all-too-fleeting conversations between sessions when you could have a “real” conversation with other professionals who, like me, are trying to figure out how to provide the best counsel and the best value for our clients or our companies.

Oh, and in addition to all that, the conference actually inspired me to write my first entry on the TVG blog, and I’ve joined Twitter as well as started my own blog. Follow me at www.twitter.com/kellyferrara or at www.kferr.blogspot.com! Who knew!

I’ve got another conference in June – - I wonder what creative muse will appear there?

Contact us at tvg@vandivergroup.com or send comments to blog@vandivergroup.com.