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Word Of Mouth Advertising Online Gets Gagged

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Brands hoping to promote their products online through word of mouth marketing will have to be upfront that they are behind the campaign, under new UK consumer-rights restrictions that go into effect May 26. AdAge reports the new rules make it a criminal offense for brands to blog, use brand ambassadors or seed viral ads, while “falsely representing oneself as a consumer.” Bloggers who write about products for money, must also disclose they are being paid to do so.

A number of campaigns from high profile brands purporting to be from fans of the product have caused a backlash with consumers. Recently, Sony’s “All I want for Christmas is a PSP” viral campaign had consumers fooled into thinking that the video footage and a blog supposedly written by a friend of one of the characters in the video were created by real life fans. When it came to light that it was a professional campaign created by Sony (NYSE: SNE) and its very real agency Ziaptoni, the electronics giant was forced to apologize. Of course, policing the new regulations will be difficult, and while there is a possibility of fines and prison times for those caught breaking the rules, the actual punishment hasn’t been set in stone.

Still, the damage may already be done, with consumers aware that stealth advertising has infiltrated social networking. Mad.co.uk reports that a recent YouGov survey, social nets including Facebook and YouTube are among the least trusted online brands, with both sites trusted by a mere 12 percent of the population.

Moreover, as much as brands may be trying to put a positive spin on their brands online, a new report from brand research company Millward Brown shows that online communities, blogs and message boards are actually the most likely sources of negative opinions about a brand. Mad.co.uk reports that the study—looking at the influence online and offline media have on consumers’ buying decisions—almost a third (31 percent) of people who had used online communities, contacts and blogs said they have received negative brand opinions from them. This tops even the negative opinions from family and friends (29 percent) and independent reviews (23 percent).

Interestingly, price comparison web sites still get top marks from consumers, even though it is notoriously hard to police their consumer-generated reviews. According to the Millward Brown study 57 percent of respondents found the recommendations by price comparison sites to be “very relevant,” with 45 percent calling them “very convincing.”

Apr 28, 2008 5:23 AM ET

Posted In: Advertising

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