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Regulation May Be On the Way for Word of Mouth Marketing

April 10, 2008

If you’re considering paying people to spread buzz about your business, brand, product or service, make sure they disclose their relationship with you. The Federal Trade Commission (FTC) is taking a look at buzz marketing and it could result in increased enforcement of existing regulations.

Target recently had some difficulties when it’s buzz marketing campaign got outed. Don’t make the same mistake.

The reason that word of mouth is credible is because those that ask about a product believe that their friend or colleague has their best interests in mind. There is an expectation that they are getting an independent and unbiased view about a particular product. Today’s consumers don’t like to be sold too, unless they want to be. It’s usually not a good thing if customers are duped into believing one thing only to find out something different.

Because of the rising popularity of word of mouth as a viable marketing tactic and the likelihood that there will be some overzealous practitioners, federal regulation could very well be coming if the industry doesn’t police itself.

Word to small business: Generate word of mouth the old fashioned way… earn it. And if you do provide incentives to customers to sing your praises, tell them to disclose their relationship with you, especially if they are being paid for it. It beats having to explain it all later to the Feds or your customers.

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