Word of Mouth Faces Legally-Induced Conundrum
As word of mouth marketing spreads, lawyers, who can't keep their hands off anything, are circling the medium questioning its adherence or lack thereof to FTC guidelines. Putting it simply, Reed Smith Chairman of Advertising and Marketing Law Douglas Wood told Ad Age,"If the motivation for [an endorser] is to profit from his or her endorsement, that connection probably needs to be disclosed. But since disclosure undermines the value of buzz marketing, advertisers are in a Catch-22." That simple statement presents a gigantic problem for buzz and word of mouth marketers who, while stating they fully support disclosure, can't avoid the notion true transparency can lessen the effectiveness of this form or marketing.
UPDATE: The Word of Mouth Marketing Association has responded to the Ad Age article in Comments and clarified it's stance on word of mouth marketing on it's own site here.