On December 1st, the Federal Trade Commission's new Guides Concerning the Use of Endorsements and Testimonials in Advertising went into effect, changing the way that relationship disclosures are handled for bloggers, social media marketers, advertisers and celebrity endorsements. So far the new guidelines have been largely treated like a Maginot Line on the part of bloggers, with little compliance and doubts about the Commission's ability to enforce the new rules broadly.
Because the guideline has 81 pages, I've touched only briefly on points significant to bloggers, but it would be in the best interest of anyone involved in blogging, advertising or social media marketing to read it entirely, along with the 12 pages of revisions. The definition of an 'endorsement' is very broad and open to the discretion and interpretation of the Commission or investigating agency.
The new guidelines set forth by the consumer watchdog agency are designed to increase transparency in the relationship between advertisers and bloggers. From now on any material connection or relationship between them needs to be revealed by both parties, even if it was facilitated by a third party (agent, affiliate, marketing group, etc.). Material connection refers to monetary compensation, gratis review samples, additional free products/gifts, share of profits, or anything of value. Relationship refers to business, client, affiliate or personal.
If a blogger receives a free book as a review copy this should be disclosed as a material connection, regardless of whether the review is positive or negative. It is not necessary to have an expectation of a positive review in order for the review to be considered an endorsement. All that matters is that some 'thing' of value was exchanged between the two parties. The blogger needs to "clearly and conspicuously" disclose the advertiser as a 'sponsor' and define any compensation received.