Is buzz illegal?

The International Word of Mouth Conference going on in Germany. And today, ponders if buzz marketing illegal.

As marketers more frequently look to recruit consumers brand agents to spread goodwill for brands, industry attorneys view buzz marketing as a likely area of regulatory involvement, especially around the issue of compensating people to participate in buzz programs when they fail to disclose their connections to marketers and agencies. While there is no legal precedent specific to word-of-mouth marketing, there are Federal Trade Commission guidelines for ads that are likely to apply.

"If the motivation for [an endorser] is to profit from his or her endorsement, that connection probably needs to be disclosed," said Douglas Wood, chairman of advertising and marketing law at Reed Smith. "But since disclosure undermines the value of buzz marketing, advertisers are in a Catch-22."

An FTC official said while word-of-mouth isn't something that the agency is looking at, disclosing commercial relationships is crucial to avoid violating the law. "The real question is whether consumers are being misled someway," said Rich Cleland, an assistant director of advertising practices for the FTC.

Other related posts on Adland:
How young is too young to be a marketer?
Don't make WOM become SPAM!
WOMMA ethics draft not well received
NIMF attacks WOMMA for "buzzploiting" children and teens
The Hidden (in Plain Sight) Persuaders debate
Justin Kirby sheds light on difference between viral and deception.
Word of mouth marketing - do we need regulation?

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Anonymous Adgrunt's picture
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AnonymousCoward's picture

Disclosure is good. We demand disclosure.

We want consumers to talk, openly and honestly. That's the point of word of mouth marketing. We insist that any relationship between consumers and marketers be clearly disclosed from the beginning. We also think that disclosure makes messages more powerful, because it makes them more trustworthy. (No other type of marketing demands this level of honesty.)

More at WOMMA's site

viralmeister's picture

Andy's assertion seems almost Kant-like in its moral certainty. This is fascinating given that all the scientific research relating to attribution theory and the like would seem to suggest otherwise, i.e. incentivised word of mouth is not credible and therefore not effective. Perhaps this is cultural because you can call someone a good salesman in the US without there being any sense of irony or sarcasm.

But it's the Kant-like moral certainty surrounding disclosure which interests me because business in general seems to be more Utilitarian, i.e. morality is based on its consequences not on any categorical imperative.

Maybe we shouldn

Andreas-Udd's picture

... does anyone know of a nice, short and sweet, my momma could understand it, defintion of each?
I'd like to know the difference between BUZZ and WOM, if there is one.

viralmeister's picture

Well, the very wise Dr Paul Mardsen once said that buzz, viral and word of mouth are all the same thing, namely network enhanced word of mouth or what the Japanese call 'Kuchi-Komi'.

If you want to talk of nuances then:

... viral has tended to be used by those dealing with online networks
... buzz by those who exploit media networks (PR-ability)
... and WOMM by those who harness traditional social networks.

But it's all network-enhanced word of mouth. Simple!

see more here

CopyWhore's picture

Let's not bring Kant into it and make it all academic and boring...

At the heart of it, word-of-mouth marketing seems like a good idea since we trust a fellow human being more than we would an advertisement. If a friend came to you and extoled the virtues of his new Volvo, you'd be more likely persauded by his salespitch than that of a car salesman, since your friend has no vested interest in talking up a Volvo.

Word-of-mouth marketing attempts to hijack this phenomenon by paying people to come off as sincere brand advocates...A decidedly stealthy move, no doubt.

But seriously, are you going to trust a stranger who's hawking some product or service? A friend has credibility because they are, after all, a friend.

Some random person in a bar who starts chatting you up and telling how smooth his vodka tonic tastes is plain and simply a freak. And most people will see the hidden agenda a mile away.

What's more is that any brand contact point (or person) should unmistakebly reflect the brand and its essence -- that's what all the 360 degree brand twaddle is based on, anyway. So for a brand not to designate itself as the brand in every media, and not to engage people in a likeable and suprising way, is just sheer stupidity. And a waste of money, to boot.

Clandestine, word-of-mouth brand agents do nothing to build brands, therefore. At best, they may stimulate trial. At worst, they represent the worst excesses of misguided marketing people and reinforce the public's hatred for marketing and advertising, which, in turn, makes marketers even more desperate to reach to people with even stealthier tactics.

Let's give this word-of-mouth thing a rest and go back to doing real advertising. It's hard and there're no short cuts. But when you do it right, it pays dividends...

viralmeister's picture

Erm ... I think Copywhore maybe American because the citing of Kant et al is called irony.

Erm ... also not sure where she/he gets this idea that Word of Mouth Marketing is about paying people to spread the word.

The real point is that much advertising no longer works now and there are a whole load of reasons why like ad clutter, media fragmentation, ad avoidance, mistrust, etc, etc.

What has been shown is that recommendations rates are the only metric that can be pegged to business growth.

However, natural word of mouth may not be enough to help brands cut through the clutter. So brands need to help amplify and accelerate word of mouth and despite CopyWhore's assertion there's a whole host of techniques that can be employed to improve advocacy and the most effective ones do not involve any form of bribery. In fact, good advertising has a part to play, so it's not a question of Advertisng versus Word of Mouth but about developing marketing strategies (not just marketing communication campaigns) that optimise advocacy.

If that

CopyWhore's picture

Erm ... There's nothing remotely ironic about your citation of Kant.

Erm ... It seems like nothing more than an attempt at posturing as some kind of quasi-academic with the purpose of gaining credibility.

Erm ... You seem to have a quite a penchant for tossing 'round jargon and missing the real ideas.

From your last post: "recomendations rates" "cut-through-the-clutter" "marketing strategies (not just marketing communication campaigns)" "optimise advocacy" "unquantifiable brand awareness through advertainment"

Seriously, what in the hell are you talking about?

There's a bottom line with regard to branding: make people love you.

Suprise 'em; delight 'em; entertain 'em... It doesn't matter how. Everything else is bullocks (which, I'm assured, is a British euphemism for Bullshit...imagine: not every Yank tosser is a provencial, Nascar-watching, illiterate imbecil who fails to understand irony!)

Big wet slurpy kisses

viralmeister's picture

As I said you must be an American and best of luck with the procurement department.


Dabitch's picture

Am I going to have to get you two a room? ;)

Not to brag about my bilinguability (hehe) but you UK:ers and US:ers truly speak the same langauge without understanding each other. It's rather funny. ;)

Does sernovitz not have two US cents to weigh in with?

CopyWhore's picture

Nice ad hominem attack there. I'd expect more from someone who goes around talking about categorical imperatives and such...

viralmeister's picture

Well, you had said:

"There's a bottom line with regard to branding: make people love you."

Nuff said.

CopyWhore's picture

Right, I did say that. But I wasn't trying to rub everyone's nose in erudition by flinging around Kant and his philosophical jargon.

My point about your ad hominem attack is that I'd expect a more substantive retort from someone with such apparent scholarship...

Andreas-Udd's picture

sernovitz: From the WOMMA site I found this Word of Mouth vs Advertising. You don't honestly think it's an either or thing do you? In what way was's headline IS BUZZ MARKETING ILLEGAL? "inaccurate"? I'd really love to know.