by Brooke Lorren

Created on: November 13, 2009   Last Updated: November 19, 2009

Blogs used to be a place where ordinary individuals would write down their thoughts. Over time, certain bloggers started gaining popularity, and started to realize that they could make money through their blogs. In the past couple of years, companies started to see that blogs were a source of cheap advertising. Both large corporations and small home businesses started reaching out to bloggers, offering free products and sometimes cash payments to bloggers who would write about the product. The Federal Trade Commission recently passed a law requiring these bloggers to inform their readers that they were receiving payment (or products) for their review, in order to prevent confusion among blog readers.

While most bloggers that receive free products write honest reviews, and free product doesn't necessarily guarantee that a blogger will write a positive review, it often doesn't hurt. Even when bloggers don't have a high opinion of a product, they will often try to put a positive spin on the item that they are receiving. The Federal Trade Commission doesn't want bloggers to deceptively advertise a product that they had received a payment for. The new law requires that they disclose their payment.

The new guidelines go further. Bloggers are supposed to inform readers if they use Amazon.com (AMZN) or other referral links in their posts. Amazon.com is based in Seattle and is in the business of selling books, DVDs, and other products over the internet. They often offer affiliate payments as a way to get bloggers and other web content producers to provide links to their site. Writers need to disclose payments that they receive on Facebook and Twitter as well. Although Twitter limits each tweet to 140 characters, the FTC requires that writers include an abbreviated form of disclosure in an ad, otherwise the ad will not be legal.

The new FTC requirements will probably only alter blog posts slightly. A blogger can easily disclose a relationship with a company in a sentence or two. On Twitter, people will have to develop a new lingo for disclosing that they have received compensation. It may be as simple as appending "ad" to the end of a tweet.

It is not likely that the FTC will be able to monitor every blog, Facebook post, or Twitter ad. Blogs that generate complaints may be investigated, and blogs with higher readership may also receive more scrutiny. Advertisers and advertising networks will also be held responsible for the guidelines that they give to bloggers when they provide free products or compensation in exchange for a review. Major advertisers that do not inform bloggers about the need to provide disclosure are more likely to be investigated than the typical blogger writing from home.

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