Klout Konundrum

Since the launch of their products-to-influencers Perks program over a year ago, Klout has done 100+ deals with brands, but, as Ad Age Digital reported yesterday, “…such tactics are subject to [Federal Trade Commission (FTC)] disclosure regulations and the program could potentially have legal implications.”

The catch – The FTC’s 2009 revision regarding testimonials and endorsements in advertising: people posting about such products must disclose that they received them as incentives.

Perks recipients are chosen based on their Klout score, areas of influence, and sometimes geography, and according to CEO and co-founder Joe Fernandez, human oversight is used when a specific demographic is being sought.

According to Ad Age Digital author Cotton Delo, at present, Klout addresses the FTC revision by sending a card with perks that states that recipients should disclose that they’ve received a sample, should they write about it.

As PR professionals, we understand the importance of detailed planning and measurement, and, following Jason’s post last week about Klout’s updated  influence measurement system, I think it highly unacceptable that they have not taken the time to build a detailed and structured monitoring program to check compliance.

What do you think?

 Kelly is a traveler, New York native, public relations and social media professionalavid music lovertechie, and psychologist. She is passionate about enabling meaningful conversations and connections via the social web, believes that learning is lifelong and enjoys discovering new tactics to create and sustain brand identity and influence and maintain advocates.

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  • I think since Klout launched this they should strictly enforce the FTC disclosure rule.  They should make people agree to it BEFORE they even receive the product.

    • Good point and idea for Klout: taking the true precaution and ensuring compliance before Perks are received.

      Thanks for reading and for the comment, Shannon!

  • I wonder if the law addresses intent at all. Personally, I never viewed the perks program as a direct attempt to get people to write about the products. It’s not a requirement of receiving a perk (that I’ve seen anyway) like it might be when businesses send products to bloggers for reviews. I saw it more as connecting the innovators and early adopters with a product they hopefully will enjoy. Sure, some people may write or tweet about it but I figured the benefits were more word of mouth and reaching directly to someone who is a potential customer. I’m not sure a distinction matters in the law though even if that is the case.

    • Katie,

      Thank you for your perspective!

      The Perks program may not always be a direct attempt to get people to write about the products, but in order to abide by FTC disclosure regulations, those who do write about product(s) received must share that they received them as incentives, whether their writing was an intention of the Perk or not.