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Can word of mouth marketing get me in trouble?

Intro: The U.K. is introducing a new bill that states that some stealth marketing practices are illegal. Honest word of marketers already oppose those particular practices, but it's time for a review. (See update below.)

1. Word of mouth marketing is safe and legal.

Honest word of mouth marketing is when you inspire your fans to talk about you. It is about earning their respect and recommendation. It always requires full disclosure and total openness, as defined by the WOMMA Ethics Code.

It is always safe and legal … and more honest that most forms of traditional marketing.  Why?  Because if you can't earn a recommendation with a great product or service, the word of mouth stops.  Traditional advertising runs as long as you pay for it, even if the message is less than true.  Real word of mouth depends on honest customer love.

2. WOM marketing without disclosure is illegal.

Any form of deceptive word of mouth campaigns are illegal.  This include any program where you are:

  1. Asking buzzers to recommend your product without disclosing that they are part of a campaign or received and incentive. 
  2. Falsely representing your employees/agents as consumers. 
  3. Asking buzzers to claim they like your product when they don't, or never tried it.

The FTC in the US has made this very clear.  The UK's new directive agrees.

3.  What should we watch out for?

Any campaign or agency that proposes:

  • PayPerPost or any similar program that induces people to post false recommendations without requiring that each post is properly disclosed. 
  • Sending employees or agencies to post anonymous comments (see MGM). 
  • Intentionally telling fans to hide their involvement with a campaign (see Target/Drill Team). 
  • Agent programs that send out armies of non-customer buzzers but can't enforce disclosure. 
  • Posting fake reviews.

4.  The WOMMA Ethics Code will keep you safe.

WOMMA's Ethics Code is simple and effective.  Read the entire document here.  The key idea is the Honesty ROI:

  • Honesty of Relationship: You say who you're speaking for 
  • Honesty of Opinion: You say what you believe 
  • Honesty of Identity: You never obscure your identity

If you have any questions at all about the the ethics of your campaign (or one being run or pitched by an agency), use these 20 questions to identify any trouble spots.

5.  Will I get caught?

Every time.  And when you do, your brand will be forever damaged.  The backlash against a company that lies is swift and severe in the age of empowered and connected consumers.

Why would you risk a priceless brand by sending out untrained buzzers to speak for you?  Why would you risk your valued name by letting a 20-something post false comments for you?  Why would you do this when you have vast hordes of happy customers who would gladly recommend you — if you only asked.


6.  What's new

Nothing at all.  It has always been illegal for marketers to lie to consumers.  It has always been illegal to use false testimonials.  Somehow, companies and agencies have used social media as an excuse for new forms of deception.  That's disgusting when we have an opportunity to use these tools to promote truth, transparency, and accountability. 

The truth is that word of mouth is based on truth, that liars will always be exposed, and honest companies will be richly rewarded by adoring fans.

Disclosure:  I am a private citizen, speaking for myself.  I do not represent WOMMA nor do I work there any more.  I am not a lawyer.

P.S. If you want to know how to earn word of mouth the right way, read my book or bring in my team for training. 

P.P.S  If you are angry at this post, I bet you have some sleaze to hide.

UPDATE:  The UK Office of Fair Trading reorganized their site.  The relevant documents are here (page 27).

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Comments

  1. Alanna Shaikh April 14, 2008 at 10:51 am #

    Do you think this is a response to that vaguely sleazy effort to recruit London cabbies to advertise without disclosing?
    (I blogged the taxi effort here: http://alannashaikh.blogspot.com/2008/01/taxis-and-word-of-mouth.html)

  2. Scott Allen April 14, 2008 at 1:19 pm #

    PayPerPost certainly got themselves into trouble at one point, but they now require transparency and disclosure. According to their TOS:
    2.1. TRANSPARENCY & DISCLOSURE.
    PayPerPost requires full disclosure by all Marketplace participants. Any attempt to instruct, coerce or manipulate a Blogger into hiding the commercial relationship between you and the Blogger may result in removal from the system. Advertiser agrees to comply with Our Advertiser Code of Ethics, the Federal Trade Commission’s Staff Opinion Letter dated December 7, 2006, WOMMA’s Ethical Blogger Contract Guidelines, and all applicable laws and regulations, including but not limited to Section 5 of the Federal Trade Commission Act and the Federal Trade Commission’s Endorsement Guidelines.

  3. Liz Strauss April 14, 2008 at 1:46 pm #

    Well said, honestly and authentically. I’ll pass it on. :)
    I couldn’t agree more with you or what you say here.
    Disclaimer: I gladly recommend you without being asked.

  4. Andy Sernovitz April 14, 2008 at 1:49 pm #

    Actually, PayPerPost’s disclosure policies are a scam.
    They say all the right things, but they actually let bloggers put a little badge anywhere on the site, not in the post being paid for. You’re allowed to bury the disclosure in the fine print, so the average reader is deceived.
    (Re-read what you posted. Those are rules for their clients, not the bloggers. And they never enforce those rules on their clients.)
    As I’ve blogged before, PayPerPost intentionally and willfully pays people to lie.
    (I’m sure they will send their people to comment on this blog sooner or later.)

  5. Scott Allen April 14, 2008 at 2:05 pm #

    Maybe they already did!
    (just kidding)
    Thanks for the clarification. I signed up with them a long time ago, did one post (about PPP), and that’s been it. I have no problem with paid posting, so long as it’s transparent/disclosed. But if the policy isn’t enforced, that’s obviously a problem.

  6. Sue @ TameBay April 14, 2008 at 2:15 pm #

    It’s not just PayPerPost. ReviewMe are now allowing their advertisers to require non-disclosure.

  7. BIG Kahuna April 14, 2008 at 2:41 pm #

    I can see your face turning red when you wrote this post! We all want honesty in the world but alas we can’t police everyone. Those that do it right will be rewarded and those that don’t will fail.
    Great post.

  8. Susan Cartier Liebel April 15, 2008 at 8:18 am #

    Great post. Question: what is your unofficial opinion about people who swap professional testimonials with each other never having experienced the work product of the professional, just know them informally? (Sometimes to up a rating on a ratings site?)
    Is there ‘incentive’ being offered which needs to be disclosed and/or the fact the testimonial is from someone who has never experienced the services or even really know of their services other than what is being proclaimed?
    Just VERY curious

  9. Tom O'Brien April 15, 2008 at 9:13 am #

    YOU GO ANDY!
    (When asked, I will just point people to this post.)
    Thanks – TO’B

  10. Dawud Miracle @ dmiracle.com April 18, 2008 at 6:00 am #

    When Can Word of Mouth Marketing Get You In Trouble?

    You know I love word of mouth marketing. I find it to be one of the purest, simplest and most rewarding ways of getting my business known.
    But did you know that word of mouth marketing can be illegal?
    According to Andy Sernovitz theres a new bil…

  11. Dan... April 26, 2008 at 10:56 pm #

    This is a great post Andy, except for the PayPerPost errors. As a blogger, advertiser and investor with PayPerPost, I’ve followed the explosion of social media marketing as closely as anyone. As I previously shared on the WOMMA post:
    “every WOMMA member can use PayPerPost in accordance with every WOMMA guideline.
    (I cut Dan’s shameless self-promotion here – Andy)
    That was last year and, since then no one, including you, has shared an industry or corporate disclosure guideline that couldn’t be implemented via PPP. My request and email remains the same…if you know of a disclosure guideline that cannot be implement via PPP, I want to know.

  12. Andy Sernovitz April 27, 2008 at 11:18 am #

    Dan –
    I don’t think I’ve ever met a person more dedicated to protecting and promoting dishonesty. I’m fascinated by your willingness to lie in writing, on the public record.
    You pay bloggers to post false reviews without disclosure. This is illegal in the US and UK.
    Just because you claim that there are reasonable uses for the system doesn’t hide the fact that it’s primary purpose is lying.
    All of you supposedly-honest disclosure rules are optional. They are shameless covers for deceoptive acts.
    Finally, Dan, stop using the WOMMA name to defend your actions. WOMMA has publicly rejected you and your sleaze.
    (P.S. I have deleted the links in your comment. You will not use my site to promote your filth.)

  13. Mike Ashworth April 20, 2009 at 10:31 am #

    hi andy,
    the link to the OFT site in the UK results in a “page not found”. I conducted a search of their site however I couldn’t identify the pdf. Can you help?
    @mikeashworth