Rich Tong

Yesterday Betabeat broke the news that Tumblr fashion director Rich Tong was hoping to get big brands to pay hundreds of thousands of dollars for product placement and branded content from Tumblr's "select bloggers".

In essence, Tumblr was acting like a talent agency, promising work from a group of writers who use their platform. The proposal offered 15 posts with the "content to be agreed upon prior to the start of the week". For $10,000 the brands could get some face time with the bloggers at a private party and for a negotiable price brands could get product placement from all 20 select bloggers.

Betabeat has learned however, that Tumblr had no formal contract with any of these bloggers. In fact, the bloggers Betabeat spoke with had no idea their services were being promised, no clue about the terms of the proposal and were blissfully ignorant that Tumblr was asking to be paid hefty sums for their work.

"It makes total sense," said one select blogger who spoke to Betabeat by phone. "They need to start earning money, and writing about brands, product placement, that is a good way to do it."

Didn't it bother her that Tumblr was making money off this arrangment, asked Betabeat. "No, they get paid, but I get to attend the events and break interesting stories on my blog."

Betabeat explained that, according to Mr. Tong's proposal, the bloggers would be submitting 15 posts per week, not to their own blogs, but to the Tumblr's owned by the brands paying the fees. "Oh, wait really?" the blogger asked. "In that case, I would definitely want to be paid, because I would no longer own the content."

A further wrinkle is the possible legal issues surrounding paid blogging. If Tumblr is accepting money from brands and assigning writers to produce advertorial content with product placement, that needs to be disclosed. Otherwise, its a violation of the FTC rules governing paid blogging.

As one angry designer told Betabeat yesterday, "They are trying to have us pay for Tumblr bloggers to come to our shows, which is ridiculous. We would never pay a journalist to come cover us, so why would we pay Tumblr?”

Betabeat reached out to Tumblr with the specifics of this post, but they declined to comment.