PayPerPost Does Something Right

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.

PayPerPost Requires Disclosure by Marketplace Participants

Company Follows 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 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