FTC weighs in on “word-of-mouth” marketing

Interesting. From the Washington Post:

The Federal Trade Commission
yesterday said that companies engaging in word-of-mouth marketing, in
which people are compensated to promote products to their peers, must
disclose those relationships.

In a staff opinion issued
yesterday, the consumer protection agency weighed in for the first time
on the practice. Though no accurate figures exist on how much money
advertisers spend on such marketing, it is quickly becoming a preferred
method for reaching consumers who are skeptical of other forms of
advertising.

Word-of-mouth marketing can take any form of peer-to-peer
communication, such as a post on a Web blog, a MySpace.com page for a
movie character, or the comments of a stranger on a bus.

This would seem to have some ramifications for the aforementioned paid Diggers and pseudo-"fan" PSP Web site marketers.

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