NEW YORK, Dec 23, 2006 (AFP) - The curtain has been pulled on a deceptive new advertising tactic in which companies camouflage ads as product praise in online postings masquerading as independent blogs.
Several companies have been exposed for launching fake blogs -- known as "flogs" -- in a practice that coincides with an increase in the number of real bloggers secretly paid to endorse products.
Blogs, a term derived from "Web logs," are rampant on the Internet and are considered online journals in which people post personal opinions, musings, rants and more.
Online firm Technorati reported on Thursday it was tracking more than 63 suspicious blogs.
Wily marketers have infiltrated the blogging world, paying for favorable commentary on products.
However posting product commentary without alerting readers that bloggers were compensated for their opinions is unethical and potential illegal, according to US Federal Trade Commission rules.
Sony Computer Entertainment America, a subsidiary of Japan-based Sony, admitted last week that it created a bogus blog baptized "All I want for Christmas is a PlayStation Portable."
The blog was passed off as the work of an amateur hip-hop musician named "Charlie," who enthusiastically praised the PlayStation.
In a short message on the Charlie blog, Sony apologized for being "a little too clever."
The world's largest retailer, Wal-Mart, came under fire in October for a blog portrayed as an online journal kept by a typical US couple, named Laura and Jim, as they traveled across the country in a motor home.
The couple's blog praised Wal-Mart for letting them park their hulking recreational vehicle overnight in store parking lots and told of encountering Wal-Mart workers nationwide that praised their jobs and their employer.
Business Week magazine revealed that the couple's cross-country trip was sponsored by Wal-Mart -- a fact unmentioned in the online postings.
Companies such as PayPerPost and ReviewMe, which link bloggers and advertisers, are fueling the phenomenon.
PayPerPost, a five-month-old pioneer in the practice, is true to its name regarding favorable online blog postings.
On ReviewMe, bloggers in any language can offer to post their thoughts on products for 500 dollars a review.
ReviewMe explains on its site that it cannot guarantee favorable reviews, but that most of the posted opinions are positive.
"We do not allow advertisers to require a positive review," the company said in a statement. "The vast majority of reviews are measurably positive, although many do contain constructive criticism."
Blog-for-hire publicity campaigns can be comprised of thousands of postings, according to a PayPerPost spokesman that wished not to be identified.
Fake "independent" blogs by companies or secretly manipulated by advertisers break US law by misleading consumers, according to federal regulators.
The FTC warned this month that "such connection must be fully disclosed" and that its staff "will determine on a case by case basis whether to recommend law enforcement actions to the commission."
Faced with the FTC threat, PayPerPost announced this week it would change it service agreement to require bloggers who were being paid to say so in their postings.
Previously they had left it to the blogger's discretion.
Many PayPerPost competitors have yet to adopt such a rule, and the torrent of user-generated videos, images, and text flooding the Internet has aspiring advertisers navigating uncharted waters.
Attention seekers from fledgling music bands to major corporations have seen clever online content "go viral" -- lingo for being spread for free worldwide by people using e-mail and online links.
Both video-sharing website YouTube and teen-oriented social networking MySpace, for example, have become venues for companies to establish promotional pages.