The AP reported that the FTC is planning on going after bloggers that make fake endorsements or get paid in products for coverage without disclosing it:

“New guidelines, expected to be approved late this summer with possible modifications, would clarify that the agency can go after bloggers–as well as the companies that compensate them–for any false claims or failure to disclose conflicts of interest,” the article explained.

The rules could be quite strict, even extending to the practice of affiliate links–for example, a music blogger who links to a song on Amazon MP3 or iTunes that earns an affiliate commission in the process.

What is absurd (to me at least) is how inefficient this process is. What needs to happen is better enforcement on ad networks, search engines, and merchants. Follow the money downstream rather than hunting for nickels upstream.

The people who are making fake sites are doing so because they are paid to. And amoral ad networks that syndicate ads based on *maximizing yield efficiency* (like Google AdWords) are designed to syndicate fraud because it is easy for advertisers to pay a lot for ads when their profit margins are nearly 100% because they scam people.

Look how sophisticated some of the fake sites are here.

You will never track them down one at a time because some domain names only cost a couple dollars to register. They need to police the distribution vehicles through which the scams find consumers – ad networks.

Lets not forget that Google lied to the government and media when they said they cleaned up the government grant ads, and these fraudulent ads are still running strong today.

Most searchers unaware that search results have ads on them, and likely less than 1:10,000 are aware of Yahoo!’s Paid Inclusion program that blends ads directly into the organic search results. Most SEO professionals can not point out which Yahoo! Search Submit results are paid.

A 2005 Pew study found that most users were unaware of sponsored search results:

Only 38% of users are aware of the distinction between paid or “sponsored” results and unpaid results. And only one in six say they can always tell which results are paid or sponsored and which are not. This finding is ironic, since nearly half of all users say they would stop using search engines if they thought engines were not being clear about how they presented paid results.

Worse yet, Google’s automated ad networks are responsible for monetizing nearly 70% of online copyright violations.

These networks go so far as monetizing warez websites, and Google doesn’t always disclose the ads they place on content websites, either. But may as well police everyone who is not a current business partner 😉

When Google wanted to fight paid text links they penalized the Text Link Ads website to send a message. It is far more efficient to police at the network level. Why can’t the government do the exact same thing?

As many times as they have sued and/or fined ValueClick you would think they would notice the pattern.

Force ad networks to have editorial integrity. Make small gray text with reverse billing fraud terms of service illegal. Make the networks run a clean show. If they do that there will be little to no incentive for scamming consumers. And it is easier to force self-policing onto 200 ad networks than it is to try to police millions of bloggers.

More: continued here