Group urges FTC to put stop to buzz marketing

Group asks for investigation into what it calls the "deceptive" practices of word-of-mouth and buzz-marketing firms.

Daniel Terdiman
Daniel Terdiman Former Senior Writer / News
Daniel Terdiman is a senior writer at CNET News covering Twitter, Net culture, and everything in between.
3 min read
A family advocacy group concerned about keeping commercial culture from exploiting children has asked the Federal Trade Commission to investigate what it calls the "deceptive" practices of word-of-mouth marketing and buzz marketing.

In a letter sent Tuesday by Portland, Ore.-based Commercial Alert, Executive Director Gary Ruskin asked the FTC to look into what it said are stealth-marketing tactics by companies trying to leverage some of the newest advertising techniques.

"There is evidence that some of these companies are perpetrating large-scale deception upon consumers," Ruskin wrote in his letter, "by deploying buzz marketers who fail to disclose that they have been enlisted to promote products."

"We think the issue here is that shills aren't disclosing that they're shills."
--Gary Ruskin, Community Alert executive director

Commercial Alert maintains that any marketing or advertising practices that are not honest about their goals or sponsors are illegal under false-advertising laws, and says that word-of-mouth marketing is similar to old search engine practices of having paid placements that look the same as regular search results.

The FTC did not immediately return a call requesting comment.

Buzz marketing and word-of-mouth marketing are recent techniques that seek to get consumers talking about products through clever and nontraditional campaigns. Examples include the Subservient Chicken, a Web site on which a man in a chicken suit follows typed commands. The site, which has amassed tens of millions of hits by being endlessly passed around by friends and family members, is sponsored by Burger King, but the fast-food company's branding was hard to find in the site's early days.

Commercial Alert says the problem with such marketing is that it is often undertaken by people who do not explain what they're doing or for whom they're doing it.

In an interview, Ruskin said, "We think the issue here is that shills aren't disclosing that they're shills. If shills are disclosing that they're shills, then they're not running afoul of the law."

Ruskin added that his biggest fear is that marketers are exploiting children and their relationships with family and friends.

Despite Commercial Alert's assertions, some in the buzz marketing and word-of-mouth marketing industry think Ruskin and his colleagues are casting too wide a net.

"Is stealth marketing bad and deceiving (to) people?" said Andy Sernovitz, CEO of the Word of Mouth Marketing Association (WOMMA). "We're totally in agreement." But Sernovitz argued that most practitioners of word-of-mouth style tactics do a good job of informing the public about what they're doing. In fact, he said, Commercial Alert is simply blaming an entire industry for the behavior of a few shifty characters.

"Right now this term (buzz marketing) is a catchall term," Sernovitz said. "For the same reason people call all e-mail "spam." People are being sloppy with the language, and when the terms get confused, it gets very hard to solve the problem."

In fact, he said, WOMMA commands its members to follow three directives: Be open about who you're working for; only ask people to say what they believe; and don't lie about who you are.

For his part, Dave Balter, CEO of Boston-based BzzAgent, thinks Commercial Alert is onto something but that its approach is overbroad.

"We agree with the spirit of the Commerical Alert letter," Balter said. "Marketing firms must prioritize disclosure, and they must become responsible with regard to any type of child marketing. However, we disagree with the unilateral labeling of all word-of-mouth marketers as stealth practitioners."

Balter said BzzAgent requires all its agents--volunteers who agree to promote products in public--to be up front about what they're doing.

In any case, Ruskin readily admits that many buzz-marketing campaigns are interesting and smart. But he insists that that doesn't make them admirable.

"Some of the most clever people on our planet work every day in the advertising industry," Ruskin said. "It would be nice if they did something more constructive.