With the rise of social media channels such as blogs as an alternative advertising channel, consumers will need greater protection in this space, say observers. However, they note that there may be obstacles in enforcement and question whether costs involved outweigh the benefits of doing so.
Elle Todd, partner at law firm Olswang, pointed out that since consumers and businesses expect advertisements or "paid for content" in newspapers and on television to be clearly defined as such, it is "only natural" that there is now a move to provide greater protections in alternative media.
A recent case last year involved the American subsidiary of South Korean automaker, Hyundai, which ran afoul of such laws in the United States for allegedly offering gift certificates to bloggers to include links to videos promoting upcoming Hyundai Super Bowl ads. It was eventually let off by authorities.
In the United Kingdom, two celebrities also came under fire from the public for a controversial Twitter campaign involving Snickers' chocolate bars. According to news site Marketing Magazine, glamour model Katie Price, also known as Jordan, and footballer Rio Ferdinand were criticized for tweeting messages about the candy bar without being upfront about the fact that these were advertisements, and not personal messages.
Asia lagging behind
Todd foresees more countries following in the footsteps of South Korea, which amended regulations last year so that companies and bloggers, including Facebook and Twitter users, must reveal if compensation was exchanged for any reviews.
"Such regulations are necessary to protect consumers' interests in today's world of e-commerce which can be highly influenced by online word-of-mouth."
-- Goh Khim Yong
Dept. of Info. Systems, NUS
According to an AFP report, South Korea's Fair Trade Commission director Kim Jeong-Kee said: "This measure is aimed at curbing 'power bloggers' who deceive consumers by concealing their links with companies and write favorable product reviews and organize group purchases."
More countries in Asia are likely to have such rules, predicted Goh Khim Yong, assistant professor with the department of information systems at the National University of Singapore (NUS). "Such regulations are necessary to protect consumers' interests in today's world of e-commerce which can be highly influenced by online word-of-mouth," he added.
Michael Netzley, assistant professor of corporate communication for education at Singapore Management University, agreed that the emergence of such regulations would be inevitable.
"Now I cannot predict who will be next, but I see this as simple evolution of markets," he said. "As people push the boundaries, regulators will respond by tightening boundaries. This will be especially true in markets where people are more likely to look to a government to take action and hold people accountable."
Todd noted that similar rules have been in place across Europe for several years following the implementation of the EU Unfair Commercial Practices Directive. "These wide ranging rules extend to misleading comments or omissions in blogs or social networking feeds, including failure to disclose any commercial association between writer and product," she added.
Important for bloggers' long-term reputation
Goh added that it would be also be in the long-term interest of paid bloggers to declare any commercial dealings upfront to protect their credibility.
"For example, there are some food bloggers who in the past were not quite forthcoming when it came to declaring that certain food review sessions were invited [events] or paid for completely by restaurants," the NUS assistant professor said. He pointed out that those bloggers attracted "severe criticisms" online when the food or service quality did not match up to their reviews.
Bloggers that ZDNet Asia spoke to supported the idea of being subjected to similar standards as mainstream media.
Dr Leslie Tay, who runs a food blog, said he observed a strict policy of disclosing any incentives or compensation that may have been received.
"I go according to the principle to do unto others what I would have others do unto me," Tay said.
Another writer, Paul Mah, who runs a technology blog, noted that it was easy to see how bloggers would be enticed by freebies. He also has made it a point not to accept any compensation "to retain the integrity and independence" of his work.
Obstacles to implementation
Olswang's Todd believed that tighter standards were necessary to maintain order in the social media advertising space.
"It would also be helpful to have self-regulatory best practice guidelines to create standard approaches for consumers that are readily understandable, such as the use of a hashtag #spon [for sponsored posts] for Twitter. Without this, consumers may still be confused," she added.
However, she pointed out that there would be challenges in enforcing such practices.
"Since it is possible for blogs and sites to be anonymous or out of jurisdiction, therefore, enforcement may be difficult against rogue companies or individuals," Todd noted.
Netzley agreed, and believed self-regulation by the Internet community may be more practical.
"We see many instances of Internet self-regulation where one netizen will hold another accountable," he explained. "If done reasonably and constructively, many of these instances can be handled constructively without [the need for] regulations and enforcement officers."
"I would strongly encourage starting with opportunities for improvement that already exist or which are constructive, such as public education, codes of conduct, and specific examples offered as guidelines. We can also educate citizens on wise consumption of information," he said. "Once the step toward regulation is taken, backtracking will be very difficult."
There will always be instances of bad or opportunistic behavior, he added, but a few bad apples does not mean people need to be regulated.