Issue: The Word of Mouth Marketing Association (WOMMA) cozies up to IZEA - the former PayPerPost
Commentary by: David Vinjamuri

David Gelles reports today in The Financial Times that IZEA, the former PayPerPost will be a sponsor of the upcoming Word of Mouth Marketing Association (WOMMA) event WOMM-U in Miami.  WOMMA is an industry association that has created an ethical code that members abide by.

IZEA is the current incarnation of PayPerPost - service that allows companies to pay bloggers to write favorable reviews (paid advertising, essentially) of their products.  Current IZEA customers include K-Mart, Air New Zealand, Universal Music Group and the resort chain Beaches.

The paid blog posts are very similar to advertorials.  The difference is that these blog posts are not labeled as advertising. This violates WOMMA guidelines and is still roundly condemned by influential bloggers.

The surprise here is that WOMMA would accept IZEA as a sponsor.  As Gelles writes: “This is a bit like if McDonald’s were to sponsor a PETA convention.”

The brand question for WOMMA as well as IZEA customers like K-Mart and Universal Music Group is simple: what is the effect of insincere praise on sincere brands?

While consumers may stumble across these sponsored blogs in search (although Google has downgraded their page ranks), and consumers may make purchase decisions based on these reviews, the practice is built on a foundation of sand.  The moment the underlying motive for the recommendation is revealed - money - the negatives for the brand soar.  Advertising if done well can be effective and word-of-mouth marketing is ideal.  Masquerading advertising as word-of-mouth is worse than unethical, however.  It is a fundamental betrayal of the trust that is the primary driver of the relationship between the brand and the consumer.

And not surprisingly, there’s also the chance for brands using these unethical techniques, like K-Mart and Beaches to get negative PR attention by being outed in places like The Financial Times and this advertising blog.

AN AFTERNOTE:

Ted Murphy of IZEA writes the following in the comments on the FT article (addressed to David Gelles):

1. David,
I am the first person to admit that we made some initial mistakes with PayPerPost at launch. When we created the sponsored conversation industry there were no standards. We have had to make adjustments along the way and have since created the standards by which our properties currently operate.

While we have created our own standards I would actually argue that there are still no Internet-wide standards. WOMMA has done a great job creating guidelines and an ethical code, however that code is interpreted very broadly and the member base is relatively small. There is no universal form of disclosure among word of mouth marketers, not to mention online marketers and affiliate marketers.

We have taken it upon ourselves to create what I believe is the highest standard of disclosure and transparency in online marketing. In addition to operating a completely open marketplace we insist that bloggers abide by our REAL Code of Ethics.

http://socialspark.com/code_of_ethics

No other WOMMA member that I am aware of has standardized, machine readable disclosure. Bloggers cannot submit a post for payment without having our standard disclosure badge included in their post.

I do not deny our fumbles of the past, but I feel it is important to recognize our current state of operation. We have come a long way and we continue to innovate. Look for another announcement around the disclosure topic at WOMMAU next week.

Ted Murphy
Founder / CEO of IZEA
Twitter : @tedmurphy

Our response is as follows:

Ted,

Disclosure, even machine-readable disclosure, is not an acceptable substitute for transparency. Blogs are by nature conversations, and the form has grown and been sustained by original, authentic voices. When consumers read blogs they have the reasonable expectation of reading the honest and unbiased opinion of the blogger. By adapting paid endorsement (i.e. advertising) to the blog format, you are using the form to deceive. A disclaimer at the bottom does not remove your responsibility to the consumer.

This entry was posted on Friday, May 8th, 2009 at 9:40 am and is filed under news, K-Mart, WOMMA. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.