Consumer

(CBS) It's a form of advertising that has exploded in recent years: companies using bloggers to promote their products or services, using classic the word-of-mouth technique.

"We can get the word out that's not just advertising on a billboard somewhere that just says buy tickets," said Tracy Graf with Feld Entertainment. When the Ringling Brothers Barnum and Bailey Circus came to Denver, the company used "mommy bloggers" to get the word out about their show, reports CBS station KCNC-TV.

"It's a form of another mom telling these moms how she enjoyed it, experienced it, and how much fun she had with her kids. It's the ultimate word-of-mouth advertising because she's sharing her experience with other moms. Moms are online, they're shopping online, and they're doing research online."

The company worked with several bloggers, including Amber Johnson from Mile High Mamas. Johnson received free tickets in exchange for her blogs, along with a promotional code that she could put on her Web site. Other families could use that code to get discounted tickets. Feld Entertainment did research to find bloggers that they felt would reach their target audience.

"Companies are really jumping on board and want to be a part of this," said Johnson. "Companies are really realizing that mommy bloggers are really the rock stars of the blogosphere right now. They're calling them influencers or brand enthusiasts. They're really rallying around the mommy bloggers, wanting them to promote their products and do giveaways on their blogs."

Bloggers who write about products or services for a company can be offered free products or payment in exchange for their work. It's a way for bloggers to make extra money or get needed products for their household.

"It does give me, as a stay-at-home mom, a way to feel like I contribute a little bit, not money wise but with the products we do receive," said blogger Laurie Cooper, who regularly does product reviews and blogs on her Web site. She is also the product reviewer for Mile High Mamas. "Some of them that I do go after are things we would need to buy regardless," said Cooper.

The problem has been the fact that some bloggers aren't revealing that they're getting products or payment in exchange for their reviews. Some advertisers have even fabricated reviews.

"Frankly there are a lot of people in the online world who really play fast and loose," said blogger Dave Taylor, who also has a technical help Web site. "I know people here in Colorado that will proudly tell you off the record that they have fake sites set up with fake testimonials to try to drive traffic to their product sites so they can actually make more sales. When you say 'But you're lying to them,' they say, 'It's just marketing, man.'"

That's why the Federal Trade Commission has come out with a new set of rules which will take effect in December. Those rules require bloggers to reveal in their reviews if they are getting paid for products in exchange for their work.

The ruling states:

The revised Guides also add new examples to illustrate the long standing principle that material connections (sometimes payments or free products) between advertisers and endorsers - connections that consumers would not expect - must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other word-of-mouth marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.

The ruling has generated heated and intense discussion among bloggers. Some aren't exactly sure how they are supposed to reveal their relationships. Many bloggers have engaged in Webcasts with the FTC to clarify what they are supposed to be doing as of December.

"To me there has been a lot of misunderstanding about the FTC ruling," said Taylor. "There's nothing new in there. They didn't introduce new laws. They're just trying to remind everyone that if you have a relationship with the company whose product or service you're reviewing, tell people what your relationship is. I think that's common sense anyway."

Taylor and Cooper said they've always disclosed what they've received. "I want to always make sure that people understand," said Taylor. "I do try to disclose if I have a friend somewhere. Or, if I write about Hewlett Packard, I say I used to work there so I'm definitely favorably inclined toward the company."

"I do believe in blogging with integrity," said Cooper. "As a consumer, I'm somebody who researches before I buy something. So I want to know, truthfully, is it a good product or is it a bad product? I try to be that person for somebody who is looking on the Internet."

Blogging with integrity is something that some bloggers have been doing long before these new FTC rules were drafted. Blogger Julie Marsh helped to found Blog with Integrity, and is also the Director of Advertising Sales for Cool Mom Picks, an online magazine. Bloggers can take a pledge that they disclose their relationships with advertisers, and get a badge or an online symbol that they can display on their blogs.

"It's more like an honor code: here's how we strive to operate," said Marsh. "We're making our aspirations public by signing this pledge and displaying a badge. I think that authenticity is what transparency and disclosure give to a blog. Without it, you're just going to lose the readers that make it worth doing.

Marsh had this to say about the FTC ruling, "It really is targeted at marketers who employ deceptive practices in word-of-mouth marketing."

Some bloggers also say that the transparency in a blog with help readers decide for themselves if there is bias in a product review.

"I think the whole idea is that we're all biased -- it's just the nature of the beast," said Taylor. "I think there's this fictitious belief that reviews are completely objective, but I don't think that people can be objective. I think we live in a subjective world. I think the FTC ruling is an important step in the right direction because it helps clarify the types of things you should disclose."

Some bloggers admit that it is hard to write an entirely negative review when a company is sending them a product free of charge, especially a potentially expensive product.

"The awkward part is when a vendor sends you a product and it's just not good," said Taylor. "It just stinks. What I do is the same as what a lot of tech reviewers do, I disclose to the company in advance, I would like to see their product, and I would a chance to review it but there's no guarantee I will.

"Once or twice I've actually emailed the company and said 'I can either write a really bad review, or we can just let this one fall off the table,' and they're always like 'Oh, you can just let it fall.' That's an awkward situation, too, because on the one hand, I have an obligation to my readers to say 'Don't go here, this one is bad, but on the other hand, they're often nuances that I know they're going to fix.'"

"I don't know that they expect you to write it, but for me, it's a nice courtesy, especially if they're kind enough to send you something, that you at least give them a heads up that this is not a good product rather than trashing them or something like that," said Cooper.

"It would be hard for me to do that, to keep the product and then write a horrible review about it or say this is a horrible product, never buy it. Would it be better to write and tell people don't buy this product? Possibly, and if it were something that I tried on my own and I had purchased, that is where the line is different. I probably would go at this point I tried something today and it's horrible. But if it was sent to me and they were hoping for a good review, then no, I don't feel comfortable writing a bad review about it," said Cooper.

Both Cooper and Taylor said they have sometimes sent products back to the company rather than write a completely negative review. Cooper said she tries to review products that she really loves, so that she can spread the word about something she thinks would be helpful for other families. She also says she will cover both positive and negative points of a product.

The advice that Cooper, Marsh, and Taylor all have for consumers who may be asking how they can tell if a review is entirely positive just because of the relationship with the advertiser, is to read as many reviews as they can.

"I certainly wouldn't rely on a single individual's review to make a decision," said Marsh. "I love to go to CNET and read a smattering of reviews there. You can get a sense from a bloggers review if they gave a product a good run through if their review is honest and detailed, that's what makes it useful and worthwhile."

"Of course there are people who are going to write a good review for everything, that's what they're in it for, they want the products and it's fun," said Cooper. "Just don't read one person's. Read several different opinions, because even if someone has a good experience with it, someone else may not. There are always going to be different opinions and it doesn't' mean that one person is lying and one person is telling the truth."

"Do a tiny bit of homework or get enough data points," said Taylor. "If you're looking for the best HDTV go and read 20 reviews. It's an unfortunate reality that in the online world, it really is up to you, the consumer, to be a conscious consumer about all of this stuff."

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