Daily Archives: October 9, 2009

Podcast: Lawrence Allen on the War for Chocolate in China

In a new American Management Association podcast, our own Lawrence Allen, author of Chocolate Fortunes, provides us with the first inside look at the battle for China’s new-found chocolate addiction.

Click HERE to listen to the podcast.

For more information on Chocolate Fortunes click HERE.

LAWRENCE L. ALLEN is a former senior executive for both Hershey and Nestlé in China. He has spent more than 20 years building consumer brands for multinational companies in China. He currently lives in Beijing, China.

New FTC guidelines present trouble for book bloggers

As some of you may know, the Federal Trade Commission (FTC) presented a new set of guidelines on Monday with one important change—the regulation of bloggers and other online media. The FTC regulates commercial speech so consumers are not misled—an excellent idea. Designed to crackdown on paid endorsements, such as when a celebrity tweets about a product they were paid $5,000 to tweet about or that mommy blogger had an all-expenses paid trip to [insert expensive resort of your choice], the new guidelines also impact book bloggers—so they impact publishers. The new regulations put forth that bloggers must disclose when they receive compensation to talk about a product. This extends beyond the pay-per-post idea, when a blogger is paid to write about something (it’s called advertising), to indirect revenue (an online retailer link) and freebies. Which brings us to review copies…

Book publicity departments across the world send out review copies, for free, to editors, writers, and producers in magazines, newspapers, radio, television, and online media (like bloggers, podcasters, twitterers, etc) for the purposes of…drumroll please…review! In order to review a book, interview an author, or present something to readers, media—professional or not—require a review copy of a book to make that call. So we send them. I send them. I have stayed inside a dank windowless room stuffing hundreds of books into Jiffy envelopes, run down hallways in impractical shoes to catch a messenger, and walked cross-town twice (wrong address first time) to drop off a book at a radio host’s apartment for an interview the next day.

A brief side note: Publicity is not advertising. Advertising is paying someone to say nice things about you. Publicity is offering a book for someone to possibly say something about the book. We beg, nicely…and hopefully with dignity. You buy an advertisment in the New York Times Book Review to guarantee coverage. You pray to the book gods (or Sam Tanenhaus) for a review in it.

So publicity send those media titans or gnomes a book so they might say something about our books or authors. They need that book. The New York Times Book Review receives free books for review and so does a blogger with 50 readers. As of December 1st, that blogger will have to disclose that a review copy was provided by us (the NYTimes won’t).

As you may imagine, people are quite upset about this. Here at AMACOM we are considering our next course of action—we’ve been reading up on the regulations, discussing options, and thinking how to move forward. So here’s a round-up of the news of the guidelines so you’re better informed too.

The New York Times “Soon, Bloggers Must Give Full Disclosure” by Tim Arango

Still, sites like Twitter and Facebook, as well as blogs, have offered companies new opportunities to pitch products with endorsements that carry a veneer of authenticity because they seem to be straight from the mouth — or keyboard — of an individual consumer. In some cases, companies have set up product review blogs that appear to be independent.


The Wall Street Journal “U.S. Seeks to Restrict Gift Giving to Bloggers” by Amy Schatz and Miguel Bustillo

Some First Amendment advocates worry that the guidelines could represent a restriction of free speech. They point out that, while the FTC has long regulated advertising claims in traditional media, the agency generally has allowed publications to police themselves when it comes to editorial content. For instance, newspapers generally prohibit reporters from accepting gifts from a company they write about to protect their credibility with readers.

BBC “New rules to end ‘blogger payola'” by Maggie Shiels

Reaction from the blogosphere to the FTC’s new guidelines over what has been dubbed blogger payola has been mixed.

“The concept of disclosure is not new to BlogHer. The trust of readers is everything,” said Elisa Camahort Page, a co-founder of BlogHer the main news, entertainment and information network for women online reaching more than 15 million each month.

Slate “The FTC’s Mad Power Grab” by Jack Shafer

The guidelines have to be read to be believed. They are written so broadly that if you blog about a good and service in such a way that the FTC construes as an endorsement, the commission has a predicate to investigate. The only way stay on the FTC’s good side is with a “clearly and conspicuously” posted disclosure of the “sponsors” who provided you with the good or service (or money) to blog about the good or service. As I read the guidelines, the FTC could investigate you if you did disclose but it was not satisfied with the disclosure.

The GalleyCat orgy of information:
GalleyCat “FTC Blogger Rules Carry $11K Fines” by Jason Boog
GalleyCat “An Open Letter to the FTC” by Ron Hogan

If individual bloggers will be required to declare received consumer products as taxable income, will media companies be similarly required? If not, why not?

GalleyCat “Book Publishers, Bloggers, & the FTC Guidelines” by Ron Hogan

Obviously, these guidelines apply to all consumer products; it’s just that books happen to be our particular area of interest here at GalleyCat. With that in mind, what can book publishers do to challenge this pernicious double standard?

GalleyCat “Who Gets to Be an Online Book Reviewer?” by Ron Hogan

The questions we have to ask ourselves now are: Which book blogs meet that standard of reasonable expectation on the part of readers? Where does the line get drawn? Why was it drawn that way? And who gets to draw it?

GalleyCat “Will Big Media Stand Up for Bloggers?” by Ron Hogan

It occurs to me now that traditional media might also have a role to play in this process. Perhaps this is naively idealistic, but what if the large traditional media companies were to send their lobbyists to the FTC to explain that (some) blogs are (conceived and produced as) media outlets just like the ones they produce, only on a much smaller scale, and thus deserving of the same legal standard they enjoy?

GalleyCat “Where’s the Respect for Bloggers?” by Ron Hogan

With that in mind, just as I believed that John Freeman was wrong to question the integrity of bloggers in 2006, I believe that the FTC is wrong in defining the fundamental relationship between book publishers and bloggers in 2009 as one of “advertiser” and “endorser.”

GalleyCat “How Big Is the FTC’s New Footprint?” by Ron Hogan

This year alone, the FTC’s determination that newspapers and magazines do journalism but blogs do product endorsement will affect, in the abstract, 27,900,000 people, or 14 percent of the U.S. Internet’s “population.”

GalleyCat “Another Open Letter to the FTC” by Ron Hogan

Richard Cleland, who’s inadvertently become the one employee of the Federal Trade Commission whose name you might recognize if you spend any amount of time in the blogosphere, did a clarifying interview with Fast Company about what the new FTC guidelines regarding commercial endorsements “really” mean for bloggers…

A MUST READ! Edward Champion’s Reluctant Habits “Interview with the FTC’s Richard Cleland”

In the case of books, Cleland saw no problem with a blogger receiving a book, provided there wasn’t a linked advertisement to buy the book and that the blogger did not keep the book after he had finished reviewing it. Keeping the book would, from Cleland’s standpoint, count as “compensation” and require a disclosure.

Monkey Bear Reviews “On Reviews, ARCS, and Full Disclosure” by Sarah

I am not resident in the US, so the ruling can hardly apply to me. However, it raises the general question of reviewer integrity and full disclosure of potential conflicts of interest. Personally, I am all for transparency. I assume many of the review blogs and sites I visit receive advanced reading copies, but I would prefer this to be mentioned explicitly. Equally, special circumstances such as a personal or professional relationship with an author should be revealed, e.g.: if the reviewer is the author’s critique partner or BFF.

Janet Reid, Literary Agent “Bought and paid for, yessirreee bubba”

Why should you care about this? Because if you’re an author, this will have an impact on you.

Here’s why: the new regulations propose that anyone who receives compensation (not just money, but a product or a sample) be required to disclose that fact. Anyone includes bloggers, and tweeters. And if anyone posts information, or discussion, or opinion about it, they are required to disclose any connection to the product provider.


Duke University Press Blog “Letter to the FTC on Guides Governing Bloggers” by Laura Sell

The guidelines are designed to protect consumers by making it clear when an endorser has received a free product in exchange for an endorsement. But we, and many book review bloggers, believe these guidelines will have a chilling effect on the online book reviewing community. The threat of fines may just cause some bloggers to stop accepting books from publishers.

Chasing Ray “A request for response from the publishing industry” by Colleen Mondor

While many sites and major media representatives have asserted (quite rightfully) that it will be nearly impossible for the FTC to police the internet, it is clear that some individuals and sites will be specifically targeted. I have no interest in playing a game of chicken with a federal agency woefully undereducated on the publishing industry and the history of book reviewing in this country. To be frank, it is not worth it to me to take a chance that the FTC will ignore my reviewing and instead fine someone else.

DearAuthor “The FTC and the Unreasonable Case of Disclosure” by Jane

3. Inappropriate publisher involvement. The new Guide makes advertisers (or those that provide the product so in this case either authors or publishers) liable to the FTC for any misleading statements made by the blogger. Thus, if a blogger says something misleading, then the advertiser (publisher/author) is responsible for misleading the consumer as well.

DailyFinance “Why the FTC’s truth in blogging guidelines are truly terrible” by Jeff Bercovici

As it happens, this is not strictly a digital-age phenomenon. Every journalist knows of colleagues who too enthusiastically accept gifts, giveaways, expensive meals, all-expenses-paid trips and the like. We have many names for these people: swag hags, freebie queens, whores, shills. But they are still journalists — crappy journalists, to be sure, but journalists.

Jeff Jarvis’s Buzz Machine “FTC regulates our speech”

Second, the FTC assumes – as media people do – that the internet is a medium. It’s not. It’s a place where people talk. Most people who blog, as Pew found in a survey a few years ago, don’t think they are doing anything remotely connected to journalism. I imagine that virtually no one on Facebook thinks they’re making media. They’re connecting. They’re talking. So for the FTC to go after bloggers and social media – as they explicitly do – is the same as sending a government goon into Denny’s to listen to the conversations in the corner booth and demand that you disclose that your Uncle Vinnie owns the pizzeria whose product you just endorsed.

Be sure you check out the ongoing conversation on Twitter where FTC is a trending topic, many people are using the #HeyFTC hashtag to get the conversation going, and @RonHogan is on a roll.

Expect an update from us soon.