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Mattress CEO calls for regulation of online review sites: “a freight train out of control”

Joe Alexander, CEO of the mattress company Nest Bedding, is calling for FTC action in response to the hidden, ballooning costs of digital marketing in the mattress space. “Honestly, the FTC has to step in at some point and make review sites divulge what they are paid for each bed or brand,” Alexander says in Fast Company‘s feature story on mattress marketing today. “The industry is a freight train out of control.”

Many online reviews sites make commissions off sales of the products they review, via links that are embedded with a tracking code that triggers payouts once consumers make a purchase. Under current FTC guidelines, it is sufficient for a mattress reviewer–or any e-commerce reviewer–to simply disclose that he or she receives a commission on products reviewed. But there is no obligation to disclose if the reviewer earns, say, $50 for helping sell one brand’s mattress and $250 for helping sell another.

Fortune has estimated the annual marketing budget of the leading mattress e-commerce brand, Casper, to be $80 million.DZ