WASHINGTON -- On Monday, the Federal Trade Commission (FTC) decided not to look into word-of-mouth marketing practices, rejecting a consumer watchdog group’s call to do so, The Washington Post reports. Gary Ruskin, executive director of Commercial Alert, had requested the FTC investigate the controversial practice that uses ordinary consumers as product pitchmen.

With today’s consumer less likely to be affected by traditional advertisements, the ruling could lead to an increase in spending for word-of-mouth marketing. The FTC responded to an October 18, 2005, petition from Commercial Alert, which claimed that marketers were "perpetrating large-scale deception" by paying consumers to shill for products but not revealing the financial arrangements. Commercial Alert called word-of-mouth, or buzz marketing, "fundamentally fraudulent and misleading."

This decision means that companies, corporations, agencies and buzz-specialty shops will not have their marketing practices come under a thorough probe. However, the FTC will still be able to examine issues on a case-by-case basis. The best way to avoid such scrutiny is to have people make their affiliation with a product clearly visible when posting opinions about products, notes the Post.

“If a sponsored consumer raves about how well her dishwasher cleans, such an opinion is likely to be given greater weight or credibility without a disclosure of sponsorship that the marketer is paying the consumer to speak,” wrote Mary Engle, FTC associate director for advertising practices. “In such circumstances, it would appear that failure to disclose the relationship between the marketer and the consumer would be deceptive unless the relationship were otherwise clear from the context.”

In a press release, Ruskin said the FTC gave word-of-mouth marketing a "giant Christmas present. … Instead of acting like a watchdog, the commission is more like a docile lapdog nestled in the lap of its corporate masters."

The ruling comes during the Word of Mouth Marketing Association’s (WOMMA) annual meeting in Washington. WOMMA officials say that they are pleased the FTC turned down the request, adding that they agreed with pursuing case-by-case prosecution and that stealth marketing violates the group's guidelines, notes the Post.