PayPerPost, a marketplace for advertisers to pay bloggers to write about their products, will make a significant policy change on Monday: Bloggers will now be required to disclose that they are being paid for their posts. This looks to be at least partially due to recent moves by the FTC to force word-of-mouth advertisers to disclose any financial incentives to promote products: “FTC” is mentioned five times in the press release that will be issued on Monday (a copy of the press release is below).
This isn’t a perfect fix for PayPerPost - advertisers can still require a positive post about their products, and the disclosure does not have to be within the post itself. The blogger can choose to “prominently” display an accurate disclosure policy on the site in lieu of disclosure within the post itself, although the disclosure policy being recommended by PayPerPost states that paid posts is the same as any advertising on a site. Still, it is a big move in the right direction.
In many ways this move reminds me of Plaxo’s decision to stop spamming non-customers after a barrage of criticism. In this case, the move seems to stem more from the threat of government regulation. Regardless, we applaud the change.
Our previous posts on PayPerPost are here, and a podcast interview with the founder and one of his venture capitalists is here. Also see our coverage of competitor ReviewMe.
The press release is below.
Company Follows DisclosurePolicy.org Launch with Transparency Mandate
ORLANDO, FL – (DATE) – PayPerPost, the leading marketplace connecting marketers with bloggers, videographers, photographers, podcasters and social networks, announced the second phase of its full disclosure model, whereby participating Consumer Content Creators are required to disclose their sponsored status. The new Terms of Service, effective today, will bring greater transparency to the growing Consumer Generated Advertising industry.
Since creating the concept of sponsored posting, PayPerPost has allowed and encouraged transparency, enabling marketers and bloggers to disclose word-of-mouth (WOM) or buzz marketing relationships. The company provides bloggers with tools to empower disclosure and has popularized the concept of adopting a Disclosure Policy for all bloggers through http://www.DisclosurePolicy.org. Consistent with WOM industry guidelines, PayPerPost also prohibits marketers who use the PayPerPost marketplace from requesting no disclosure. Today’s announcement builds upon that foundation.
“The mission of PayPerPost has always been to be the top marketplace connecting bloggers and marketers,” said Ted Murphy, chief executive officer of PayPerPost. “We have always believed that the marketplace will naturally evolve based upon needs of the marketers and bloggers participating in the market. Proper transparency for WOM marketing has been an ongoing balance for our members and an issue with little legal precedent. Although the FTC was petitioned and recently declined any formal action against buzz marketing practices (e.g. Proctor & Gamble Tremor, BzzAgents), we believe the marketers and bloggers in our marketplace will benefit from today’s Terms of Service updates. We will undoubtedly lose some marketers and bloggers in the process, however we believe this measure serves our marketplace participants long term.”
As part of this announcement, we invite a competing and even larger part of the WOM marketing industry, affiliate marketers, to join PayPerPost in mandating full disclosure. Mary Engle, FTC director of advertising practices, recently stated “the FTC examines a number of criteria in deciding whether to bring a case against a marketer but usually looks more closely at actions that lead consumers to make purchase decisions. Some word-of-mouth marketing is focused on getting consumers to visit websites rather than to make immediate purchases.” Given that affiliate programs, regardless of FTC disclosure adherence, specifically reward bloggers for driving immediate purchases, affiliate marketers are encouraged to mandate disclosure, or embrace WOM marketplaces like PayPerPost that deliver the highest online marketing ROI with less risk of future FTC scrutiny.
PayPerPost’s new Terms of Service require participating content creators to fully disclose site wide with a prominent Disclosure Policy or on a per post basis. To cover the increased blogger and marketplace costs of the company’s new policy, PayPerPost is raising the minimum price per post by one dollar to five dollars per post. The company’s marketplace remains the lowest cost, highest value provider of online WOM or buzz marketing. “PayPerPost believes that its marketing partners will support this new pricing structure. Although our operating costs will increase slightly due to today’s move, the net result is a stronger communications environment for all. We encourage online WOM networks of all kinds, whether blog-based, affiliate or other models, to follow suit.”
About PayPerPost:
PayPerPost is the leading marketplace for Consumer Generated Advertising. The PayPerPost platform connects advertisers and Consumer Content Creators to deliver compelling marketing messages. The marketplace is fueled by the self expression of bloggers, videographers, photographers, podcasters and participants in social networks. PayPerPost is easier to use than paid-search or display advertising and provides more powerful features. The company is venture funded by Inflexion Partners, Village Ventures and Draper Fisher Jurvetson. Advertisers, Consumer Content Creators and partners are encouraged to join the revolution at www.PayPerPost.com.
Comments
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Do you think this was because of all of the pressure from blogs to change? It is good to see a company like this finally do the right thing. Good for them. I am now a Pay Per Post customer.
Welcome to the family Jeff : ) I hope more of you will join us. Maybe one day even you Mike!
baby steps, Ted. Just writing something positive about your company nearly killed me.
LOL. baby steps mike.
Thank you for giving credit when its due. I realize you are trying to safeguard the blogosphere, but really, we who are involved with Payperpost are, as a whole, just honest, hard working people trying to make a living doing what we love to do. Isn’t that the American dream? I’ve had full-disclosure on my site almost from the start–okay, I got a little carried away the first day, or two and didn’t, but I had no intentions of every misleading my readers. Plus I never take opportunities that require postive remarks unless I truly feel that way. In ALL instances I speak my mind on the product posted for review if I choose to take it.) Just wanted you to know that most of us are not the devil in disguise as you may think we are, trying to bilk innocent readers.
Anyway, thank you very much for your posting here.
Aw, it’s great to see you two playing nice finally! BFFs!
-Dennis- We’re going to paint pottery and get our nails done tomorrow afternoon.
Nicely done.
Get a room you two!
Mike,
I really enjoyed the podcast on TalkCrunch. Ironically I caught the episode last week, so I’m fully up to speed. It got pretty heated around the 20 minute mark.
One point Josh raised that resonnated with me as a reader is that it’s a combination of the analysis, as well as the selection of companies that you write about that make TechCrunch part of my morning routine.
Keep up the good work.
Nicely written article about a terrific company. And if anyone needs any extra nail polish, I’ve got tons of bottles sitting around.
Mike
Why do you say Payperpost did something right?
Doing something right implies that they did it from genuine honest instincts.
I suspect this course of action was only taken because of the Fed.
Hiya Ted! Nothing personal…oh, and Nice videos.
It is a step in the right direction although there have been rumors going around that they’ve ctually been manufacturing some of the controversy over the last few months and have been looking to do this for quite some time now as a way to turn it all around.
I wouldn’t be surprised to see them drop the need for positive reviews in the coming months when they need another burst of free publicity from everyone who had been critiquing them.
Have we all been manipulated?
Maybe we should call this the Talk To Ted Murphy post.
I think Darren is on to something. If it weren’t for this little love-hate fest with TechCrunch, I wouldn’t have heard about the company. I guess that means their strategy is working!
Not just TC either - for a while there virtually every high profile blogger I read was posting about the ‘controversy’.
Better publicity than any campaign on their own site to pay bloggers to write about them could ever have generated
Well…irrespective of whether all this controversy about PPP was manufactured or not it at least did help them get good publicity (for free) in blogosphere., thanks to Mike and other high profile bloggers. I guess Ted owes them all.
A lesson or two to take from all this!!? Happy Holidays everyone.
Well you can blame me Darren and Matt…I broke the news
http://jeremiahthewebprophet.b.....enary.html
Thank you, Mike Arrington, for writing about this policy change in a positive light. I appreciate that.
Happy Holidays to you.
Kudos to all. At least now we can hopefully all move on. Even if the Fed does enact the law, they would require the resources to police and monitor which will never happen based on the amount of blogs and similar type sites that are compensated for their opinion.
Maybe the bloggers will get paid less then?
-Mike
Tech Tutorials: http://www.hotcoding.com
Well, it’s good that the advertisers and publishers make their intention made known , good and proper.
At least, it’s about time everyone does it, and also, that is best the intentions are made known thru either their about pages or in a sitemap or terms & conditions.
Well, when I setup http://bbs.nu many years ago, I made a point to show who is advertising, and now with my wife’s blog @ http://marlindaradzi.com , I made it very clear on the side….unless you are blind.
Carry on the great work.
Service is still crap. I don’t trust them or anyone who would use this service.
The web’s infomercial equivalent, in this case, could be rightfully dubbed a “blogmercial” and as such, should contain the same kind of “disclaimer” that’s shown at the beginning of such “publicity programs”, on TV.
I don’t understand what the issue with PPP is? Giving full disclosure as to that it is a paid post doesn’t really change anything. It’s pretty obvious that most of the posts that bloggers do for them are ads.
Well now it is going to be required. Why the hate still? There is obviously a market for their service. It isn’t like it is any worse than sites that use Adsense and have a bunch of ads that the site owners likely thinks are garbage. They aren’t even product reviews on there. They are basically just website reviews. It isn’t like they give the bloggers a set statement they need to make. Most bloggers aren’t going to write a review on sites that are junk. They have too many sites that come through there that actually are good to waste time on ones you don’t want to write about.
I still think that it unfairly targets the little guys. When you have an ad, like the one at the top of this very page, it doesn’t say “This is an advertisement” on it. Sure, it looks like an ad, but some do not. Some look like part of the site. I don’t see anyone up in arms about those. I don’t see anyone screaming about product placement in television or movies.
An advertisement on your site, on anyone’s site, is an endorsement of a product. Simply because it is in a nice square banner to the right, or a cute rectangle at the top does not “disclose” that it is an advertisement.
You can argue that people know it for what it is just as loudly as I can argue that my ads are clearly just that as well.
I agree that it’s nice to see some positive buzz about PPP, it’s cynical comments about the whole thing being a manufactured controversy and that it was prompted by legal threats that prove you can’t make everyone happy. Which begs the question; when will it end?
You know considering you hate these guys so much you sure give them a lot of link love.
If only you hated Tailrank as much
They’re totally link baiting you man!!!
Kevin
This is great. I agree with Mike’s initial concerns that such a service can act as a form of “virus” in the blogosphere; users never knowing what is genuine or not, just like in the “real world”, advertisers plant themselves everywhere, and you don’t even know it a lot of the time.
This disclosure policy is very welcome, and I’m confident PPP will only benefit from this kind of honesty.
PS: I’ve subscribed to RockStartup on my iTunes. First episode was quite corny, but you all seemed to have relaxed now, and I think now things are more genuinely represented - it’s a good watch.
I like it. It might be a direction for individual bloggers …
Will the Washington Post and New York Times will now disclose that whatever they publish might be a result of a PR and that in the bottom line a commercial entity issued a check to someone leading to an article or a mentioning?
PayPerPost may shorten the line of “paid media coverage” by linking advertisers directly with “journalists”, but in a world where money counts, they are just not doing anything wrong. On the contrary, they just enable bloggers to do what their fellow offline journalists do anyway.
It appears that the press note is yet to be issued (on Monday, as you mentioned) as I cound not find any such press note on PayPerPost site. On the other hand, I noticed some Tips for Disclosure on their blog.
One interesting element to all of this that is - if a Blogger allows replies and trackbacks, unless everything is very heavily filtered, the commenters and the other Bloggers would waste no time in exposing that Blogger’s bias and voicing their suspiscions.
If the Bloggers are high profile, the viral network would soon be abuzz with rumours.
The only other option for independant, high traffic Bloggers who need income to pay the hosting - but insist on NOT being being paid by any company or product - would be Google Adwords.
TechCrunch is good, balanced model, where the Bloggers offer their opinions about, interesting start ups, then the readers chime in pro or con. Then trackbacks from other Blogs are allowed. Then, periodically a topic is created that thanks their advertisers.
There are really two main possibilities:
1) They really thought they could get away with their no-disclosures-necessary policy, and that the blogosphere would be satisfied with their “disclosure recommended” position. I think that’s possible if they are a bunch of suits who thought they’d caught the cluetrain but in fact caught some other train.
or
2) They knew very well that their position would be highly controversial, but they decided that the early money from advertisers was more important, and besides controversy=publicity. The prepared their fall back position with the full knowledge that they would be retreating to it eventually, and have now done so, as noisily as possible.
I’m betting on the latter. Which leaves two interesting questions:
a) Given that their current fall back position is insufficiently ethical for some notable members of the blogosphere (eg, Mr Arrington) and also insignificant ones such as myself, are they going to try and stick it out at their currently position forever, or are they already preparing to fall back to more ethical positions, maybe even all the way back to the squeaky clean “You must disclose the sponsor and the relationship to pay-per-post at the beginning of the post”?
b) Will enough of the self-appointed guardians of the blogospheric noosphere forgive and/or forget their prior business strategy that the “taint” wears off, leaving a viable, now “ethical” business enriched by their prior ethical lapses?
The way I see it is that the blogosphere is currently ripe for this form of exploitation, and if PPP doesn’t do it, somebody else will. Until there’s a general widespread understanding of the damage being done by the payola market, and perhaps some form of regulation in place, it’s inevitable that people will make a fair amount of money out of it.
They’re also cleverly working the controversy angle, and they can count on the blogosphere to have a bit of a natter about them every time they change their policy on the way to finally adopting the policy they should have had in the first place. NB: DisclosurePolicy.org appears to be the key plank in their plan to leverage and monetize the controversy, primarily through the pagerank value gained by people linking to it from their disclosure pages.
That’s not to say we should just all shut up about this because it’s really not hurting them. I think, on balance, the controversy is good. It’s educational. By educating the potential stakeholders in the blogosphere payola market we are gradually shrinking its size, because it depends crucially on the naivety of stakeholders. If PPP is the only major player that comes out of a lamentable but inevitable episode in blogosphere evolution with any money at all, then we can probably claim victory. But I half suspect that like the ever more sophisticated and painful email “spam” market, blog payola will be with us for a good long time. There will be more players, and the margins will go down as the volume goes up. Dunno. Maybe I’m being pessimistic here.
Oh, before anyone jumps on me and claims I’ve got them all wrong, I acknowledge that when a blogger makes a full disclosure at the top of each sponsored post they are not part of the “payola” market. So certainly PPP enables a substantial non-payola advertorial market, it’s just that they’re trying to own the payola part of the market as well. That’s what I object to.
Why is this startup getting so much attention?
I’m certainly under the impression that TC does not like to announce small changes to business models of too many insignificant startups. Why give so much attention to PPP - who cares?!?! Are they growing!??! Is their model working?!?!
Please concentrate on the facts, not on the irrelevant crap they give out in their PR just to get more coverage.
“I still think that it unfairly targets the little guys. When you have an ad, like the one at the top of this very page, it doesn’t say “This is an advertisement” on it. Sure, it looks like an ad, but some do not. Some look like part of the site. I don’t see anyone up in arms about those. I don’t see anyone screaming about product placement in television or movies.
An advertisement on your site, on anyone’s site, is an endorsement of a product. Simply because it is in a nice square banner to the right, or a cute rectangle at the top does not “disclose” that it is an advertisement.
You can argue that people know it for what it is just as loudly as I can argue that my ads are clearly just that as well.
I agree that it’s nice to see some positive buzz about PPP, it’s cynical comments about the whole thing being a manufactured controversy and that it was prompted by legal threats that prove you can’t make everyone happy. Which begs the question; when will it end? ” - GUY
Guy…I could not have this better. To me the punishment seems to be coming before the crime.
The double standards are glaring and I can only assume (to get everybody on the same level) that its just a matter of time before the FTC spreads its wings.
http://www.jollyjo.org
I suppose this means that PayPerPost will have to start to paying Michael for any further posts about them…or wait…they left a couple of negative factors on the table.
I suspect we will see the option to require a postive post (which, according to comments on TC, is very rarely used by advertisers and virtually never accepted bloggers) removed in the next two weeks. This will give Michael yet another opportunity to pimp their service…or wait…is it Michael who is doing the pimping here?
Ted - you’re good! Your business model is brilliant and your ability to manipulate PR (especially here) is beyond brilliant. I have enjoyed the lessons. Like you said in episode 1 of rockstartup - you are going to be so f’n rich.
^ Michael - that was not meant to be a shot at you or TC. I am a huge fan of your blog.
Brilliant excellent business idea
no, brilliant freaking Marketing Plan by PPP
Pissing off bloggers makes blogger talk about it.
–
Ted - you’re good! Your business model is brilliant and your ability to manipulate PR (especially here) is beyond brilliant. I have enjoyed the lessons. Like you said in episode 1 of rockstartup - you are going to be so f’n rich.
–
Dave G. - I am to happy to hear you watched RockStartup and seem to like it. I think I actually said I was going to make Dan rich… but to be honest it’s not just about making money for me (though that surely wouldn’t suck). What fires me up is that PayPerPost has the opportunity to redefine the landscape of Internet marketing. Sponsored posts are just the beginning of a much larger marketplace.
http://youtube.com/watch?v=2Cq3INFf0xc
I can’t sleep at night because I am so excited by the concept of consumer generated advertising and I am fascinated by the ideas of the talented team that surrounds and inspires me. It’s been a bumpy road and I am sure we will have to deal with more issues in the future, but I am loving the emotional rollercoaster and I’m duct taping my hands to the handle bar : )
http://youtube.com/watch?v=2Cq3INFf0xc
My simple solution so that I can maintain another stream of income via PayPerPost and maintain my integrity as a blogger is to never accept an opportunity that requires a positive spin, unless I truly feel that way.
It doesn’t matter WHAT it is. There are always going to be people who have ethic issues, into it for the quick buck. Forcing a company to adjust is never going to work. Forcing people to take some pride in themselves will always work. Unfortunately, that can’t be done. So, there you are……
BTW, hello, everyone and merry Christmas =]
Ted, where’s my check?
http://www.revenews.com/jimkuk.....02537.html
i wouldnt use it regardless…:(…i think it would jeopardize the integrity of your blog
First, I’m a little appalled at the comments that suggest traditional journalists accept money and gifts in exchange for positive reviews. Sure, there may be some out there that do, but it quite clearly goes against every ethical policy, either within their media organization or within the journalism community as a whole.
In recent years, many traditional news organizations have come out and publicized their ethical policies. Very few bloggers have yet to create such a policy, though organizations like Media Bloggers Association, are beginning to emerge. But even MBA doesn’t explictly call it an ethics policy, rather a “statement of principles,” which some of their members choose to blatantly ignore (note the “Voters Say Yes to New School” link leads to a misleading page meant to look like a Wisconsin news site).
But that’s an extreme case. Bloggers in general pride themselves on transparecy. Why then, wouldn’t they want to inform their readers of what’s really going on behind their computer screens, as well?
Secondly, I have to agree with Scott Karp on the issue of burying such disclosures within the page: “While I appreciate the impulse to credit apparent good intentions, deceptive advertising is like pregnancy — it’s not a matter of degrees. If I’m reading something and I can’t tell it was paid for because the disclosure is buried on another page — THAT’S STILL DECEPTION!”
Honestly, I don’t care if you consider yourself hardworking individuals just trying to reach the “American Dream.” Decpetion is deception.
Whether you agree with your paid review of a product or not, I think it’s only fair to hardworking consumers that they aren’t tricked into buying products based on seemingly good-faith reviews. Eventually, you’ll be ousted. To borrow from Nietzsche: You may wish for the days of coping with a bad conscience when you’re dealing with a bad reputation.
Forgot to add a link to On the Borderline in regards to the misleading blog post. Here it is http://www.ontheborderline.net/?p=4150
The next post on TechCrunch: “You” are Time magazine’s Person of the Year.
Seems like a lot of people are worried about a disclosure, most making a point that other media is not required to do it in some fasion or another. I’m really trying to understand the resistance. So let’s take a step back for a second.
By definition a disclosure is a statement of the truth, being up front and honest. Right? So if the blog post is written with honest intentions, then there would not be a problem. The only time someone wouldn’t want to disclose that they’re being paid is if it’s their intention for the audience to think that it’s authentic buzz, (which it’s not).
Regardless, of whether the other channels of media can or can’t do, it’s a question of your own ethics and value system.
Disclosure: writing for ryanmarle.com to promote personal and professional performance based on authentic values and principles.
I can’t imagine this will be good enough for the FTC. Ever listen to car ads on the radio? Notice how much disclosure they have to cram into the end of every ad? Infomercials on radio & TV also have to disclose themselves. The FTC will eventually catch up to this they way they did with search engines re: disclosing paid links.
I am glad they are doing this. I often wonder when I am reading reviews if they are paid to say what they do. It’s hard to know anymore.
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