Product placement should be clearly disclosed to consumers of news media, including social media outlets such as Twitter. As long as there is transparency, advertising may influence news and opinion content with a clear conscience.
The problem is that advertisements lose some of their effectiveness when seen in clear light because subtle methods of coercion are revealed. For example, if a celebrity endorses a product via Twitter, such as AOL's new homepage, ordinary people will be curious to visit the new homepage because they value celebrity opinion. But when people find that a celebrity was payed for the endorsement they will be more skeptical and less interested in AOL's new homepage.
Many bloggers are embracing corporate sponsorship in order to turn their web hobbies into business opportunities: one niche market is for “mom bloggers.” Jessica Smith is a mother in her mid-30s who has a boy toddler. She is the author of JessicaKnows.com, now JessicaNow.com, and has pitched for Wal-Mart Stores Inc., Ford Motor Co. and videogame producer Electronic Arts Inc.
After Smith published a Ford-favorable review, the company gave her a Flex crossover vehicle for a year, with a gas card. So, she published a favorable review for the crossover. Smith said she is not critical in her reviews, which is good news to advertisers. However, she no longer accepts free products:
“With regard to product reviews, please do not send me free product. If your pitch is enough to make me want your product I will gladly go out to the store and buy it myself.”
Good for her.
Smith does have a disclosure on her webpage, although not on the homepage, where she declares compensation for blog posts. Through a link to her PR/Adversiting page, she stated:
“Those in PR and Advertising are more than welcome to pitch me for inclusion on JessicaNow.com, your pitch does not guarantee coverage … For sponsored posts, I will consider posting them as advertorials for a flat fee. You or your company will be the post author and it will be clearly marked as a sponsored post.”
By the look of Smith's homepage it is clear she is in the business of marketing, which should be a clear sign to consumers of news information that she may be trying to sell them something. It appears she's on the right track, but buyer beware.