Controversial paid blogging platform PayPerPost has updated its Terms of Service agreement to require each of its "posties" to disclose they are reimbursed.
The five-month-old start-up, which has sparked both criticism and competition, had previously given its bloggers the option of providing such payment disclosure, but the company is now making it mandatory, said PayPerPost CEO Ted Murphy.
"We have tried to be hands off in terms of what types of arrangements and what deals are cut between the advertisers and bloggers. What we've come to recognize is maybe that's not such a great decision," Murphy said. "We're trying to have a clean and professional marketplace. Basically everybody needs to disclose in one way or another that they are sponsored or their content is sponsored."
Murphy also told ClickZ that a recent FTC ruling on Word of Mouth advertising spurred on the change.
"They said they weren't going to go after word of mouth marketing right now, but they did say they have some concerns," Murphy said. "With the recent announcements by the FTC and feedback from bloggers and readers and advertisers, it became apparent we need to do something to enforce some rules for the marketplace."
To assist its users in meeting the new terms of service requirements, PayPerPost is providing information and content at disclosurepolicy.org and a team of PayPerPost employees will be tasked with reviewing posts for compliance. Violators can be removed from the PayPerPost system, Murphy said.
Murphy admits requiring the disclosures may be a bitter pill for some PayPerPost users and advertisers to swallow, but he also believes it will bring a number of mainstream marketers to the site.
"It's a tough decision for us," he said. "We're going to lose some advertisers and some bloggers because of this change, but long term it's the right thing for PayPerPost."
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