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New FTC rules on diclosure of sponsorships, freebies, and discounts

By: Edward Hasbrouck

On October 5th, the Federal Trade Commission announced new regulations and interpretive guidance effective 1 December 2009 governing "endorsements, testimonials, advertisements, and bloggers" in the USA or subject to US jurisdiction.

In general, the rules require that writers, including bloggers, must disclose to their readers any "material connections” with providers of goods or services that they "endorse".

The rules don't say anything specifically about travel writing, so it remains to be seen how the FTC will define an "endorsement" in the context of a travel writing or travel Web sites. But my guess is that a typical destination article recommending or featuring one or a few specific hotels, resorts, cruise lines, or the like (which I rarely write), or a Web site that lists selected travel service providers (and not a comprehensive list of all possible such companies), will be construed as an "endorsement".

As for what constitutes a "material connection" that must be disclosed, free services, gifts, or of course cash are clearly included. Discounts or upgrades given to travel (or other) writers aren't explicitly discussed in the new regulations, but I presume that if a writer pays less than fair market value for goods or services, the difference will be considered a "gift" that must be disclosed. I also assume that affiliate relationship, referral fees, or commissions (if, for example, a Web publisher or self-publisher is paid for each person who clicks on, or books through, a link to a specific hotel in their article or on their Web site, as I am for some advertisements particularly including those from Airtreks.com) are also included.

The new rules require such a disclosure in anything a writer publishes about such a company. It remains to be seen how prominent these disclosures will have to be, but it appears that even a Twitter message will have to include at least a URL that links to a disclosure page.

For most travel writers, photographers, and publishers these regulations will require changes in business practices, changes to Web sites and blogs, and possibly changes to work already in press but scheduled for publication after 1 December 2009. Even when writing for magazines and newspapers that don't allow them to accept "freebies", freelancers on assignment for such publications often get discounted "media rates" at hotels and resorts. (One of the dirtier secrets of publications that claim, perhaps truthfully, that their writers are forbidden to accept free travel is that they are permitted to accept discounted travel, even when it's almost free. At a discussion at last week's Bay Area Travel Writers meeting, a travel publicist told of arranging for a $10 a night "media rate" at a $200 a night hotel for a writer working within such a rule.) So if publishers comply with the new FTC rules, you can expect to start seeing disclosure and disclaimer notices at the bottom of most travel articles published after December 1st.

Freebies and junkets are a perennial topic for discussion among travel writers, which has been renewed by the new rules. (One of the more interesting of recent suggestions is that, "Desk reporting should be disclosed.... It might make sense to see a bit more of the following: 'This story was written from a press release and a short phone conversation with the resort's managing director. I've never been there and have no plans to go. So, act on this story at your own risk.'")

But as yet there's been little discussion, and almost no visible sign of changes being made in anticipation of the effective date of the new rules, in relation to the new requirement for disclosure of affiliate advertising links to providers of travel services -- the primary revenue source for most travel Web sites.

And then there's the question, not addressed by these rules at all, of the way the need to attract advertisers and keep them happy -- even if their ads are plainly identified as such -- shapes the content of most travel magazines and newspaper travel sections as well as a lot of Web travel content.

In general, the model the FTC seems to be following is the longstanding requirement for financial journalists to disclose -- in newspaper articles, on the Web, and when they speak on the radio or TV or at conferences -- whether they own stock in, work as a consultant for, or have any other personal financial interest in a company they are writing or talking about.

I think this is the right way to go, both as a matter of truth-in-advertising (the issue for the FTC) and professional ethics. Each of my books has included a "disclosures" page (my publisher thought it unusual, but actually supported this departure from house style when I proposed it), and I've added a similar Disclosures & Disclaimers page linked from every page of my Web site and blog. I think a requirement for full disclosure makes much more sense than an outright prohibition on writing about sponsored trips as has been the policy of some magazines and newspapers. I'll need to do more to make sure I comply with the letter of the new rules, but their basic principles are the ones I've always tried to follow. I'd rather see "full disclosure" rules than "no freebies" rules, and I think they would be more useful to consumers.

How are other travel writers, photographers, and publishers dealing with this? Are you changing your practices, or just changing how you disclose them? What do readers think that we writers and self-publishers should do? Should we accept discounts and/or advertising affiliate relationships? Refuse them? Accept them but disclose them? If so, how?

What do any of you think of my Disclosures & Disclaimers page?

Let me know in the comments or by e-mail, especially if it isn't clear whether certain links on this site are advertisements or affiliate links or purely informational.

Posted by Edward, 23 October 2009, 22:01

Date: October 24th, 2009 @ 02:01

Categories: Consumer Travel News

This post was originally posted by Edward Hasbrouck @ The Practical Nomad.
> Read the original post here
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