FTC To Investigate Viral Marketing

According to a report by The Washington Post, the Federal Trade Commission (FTC) has spoken out against so-called word-of-mouth and viral marketing, indicating that companies must make it clear when actors are posing as customers in order to promote a product. The consumer protection agency warning includes any kind of peer-to-peer communication such as posts on Web logs, MySpace or popular video sites such as YouTube. Such marketing schemes are already covered under existing FTC regulation, with the new warning, posted as a “staff opinion”, pointing out that violators could receive cease-and-desist orders, fines or civil penalties. The Washington Post quotes Mary K. Engle, FTC associate director for advertising practices, as saying, "We wanted to make clear ... if you're being paid, you should disclose that." Viral marketing has become increasingly popular, and effective, in the video games market, with campaigns such as the ilovebees ARG for Halo 2 proving extremely popular with consumers - though it is unclear whether more oblique ARGs would fall under the investigations. The use of marketing firms to create blogs and video clips online has been met with more skepticism though, with Sony recently being criticized for its current All I Want For Christmas Is A PSP campaign, which is likely the type of marketing that the FTC might target.