Twitter and Facebook Ads Held to Same Disclosure Standards As Mainstream Media Says US Government

So much for that loophole.

The US Federal Trade Commission has ruled that ads appearing on Twitter and Facebook will be held to the same standards as those in mainstream media. This means that paid endorsements must be designated as such and any claims made on behalf of products or services must be verified.

This probably isn't what advertisers wanted to hear. Not, OF COURSE, that anyone would intentionally mislead with an internet ad. Heaven forefend. But, hey, the world is a complicated place, demand for attention is high, the noise sometimes drowns out the truth and, well, why should advertisers and their agencies be blamed if people occasionally misunderstand or misinterpret or otherwise behave unwisely based on something they read or heard? 

The reality is that the internet, and social media especially, have been something of a Wild West when it comes to regulatory oversight. Developments happen quickly, their implications take time to be fully understood and appropriate responses must be weighed. All of which means that experiments in marketing have sometimes pushed ethical boundaries.

The FTC issued 'guidelines' which means there is plenty of room for interpretation. But for those who wanted a blanket pass because the net changes everything and this time is different are being warned that the same societal standards of fairness, probity and prudence apply to the digital as well as the tangible world - assuming anyone can tell the difference between the two anymore. JL


Danny Yadron and Shira Ovide report in the Wall Street Journal:

Short-form ads on Twitter and Facebook have the same basic requirement as any old-fashioned ad: They can't mislead consumers, federal regulators said Tuesday

Whether it is including the average effectiveness of a weight-loss shake or noting that a celebrity was paid to push a product in a Twitter post, marketing company need to apply the same standards to online ads as they long have to older media, according to guidelines released Tuesday by the Federal Trade Commission.
That means making room for full disclosure even in a 140-character tweet on Twitter.
The agency suggested that marketers could flag Twitter ads by including "Ad:" (three characters) at the beginning of the post or the word "sponsored" (nine characters). The new guidelines are important because they suggest the grounds on which the agency might open an investigation.
The report expands the FTC's more than decade-old rules on Web ads to the world of social media and smartphones.
The FTC said marketers need to be conscious of the location of disclosures and ensure that users can still see them easily on a smartphone.

If a company can't find a way to make its disclosure fit the constraints of social or mobile ad, it needs to change the ad copy so that it doesn't require a disclosure, the agency said, making that point explicit for the first time.
Disclosures must be clear enough that they aren't "misleading a significant minority of reasonable consumers," the FTC said.
The FTC provided some hypothetical promotions that could cross the line. One would-be Twitter post from a fictitious celebrity account said: "Shooting movie beach scene. Had to lose 30lbs in 6 wks. Thanks Fat-away Pills for making it easy. Typical loss: 1lb/wk. #Spon." The FTC said the used abbreviation for sponsor, "#Spon" could be unclear to consumers.
The commission doesn't handle criminal investigations but can issue civil penalties if it finds misleading advertising. Civil penalties range from thousands of dollars to millions of dollars, depending on the nature of the violation. Sometimes advertisers have been ordered to give full or partial refunds to all consumers who bought the product.
The update comes as marketing firms continue to search for new ways to penetrate through the noise of modern life. Consumers on social networks are often shown ads based on their tastes and interests. On Twitter, with its more than 200 million active users, companies sometimes pay celebrities to send endorsements to their followers or buy prominent placement for 140-character advertisements.
Twitter Inc. doesn't disclose its financial results, but research firm eMarketer Inc. expects Twitter to generate about $545 million in ad revenue this year, up from $288 million last year. Facebook Inc. posted $4.28 billion in ad revenue for 2012.
Asked for comment on the FTC's move, a Twitter spokesman pointed to posted company policies that say advertisers must comply with all legal requirements.
Twitter's policies say advertisers must comply with all legal requirements, and the company's written ad guidelines highlight industries—including pharmaceuticals, tobacco and weight-loss remedies—that have "legal, cultural or safety restrictions."
Twitter has found ways to incorporate disclosure requirements into short Twitter ads. In 140-character ads for political candidates or other direct political ads, Twitter designates them with a purple box and when a user hovers his mouse over the box, it shows a disclosure about who paid for the ad.
That setup is intended to hew to requirements of the Federal Election Commission.
The FTC said disclosures need to be included in micro ads because in many cases consumers can immediately go purchase the item at a brick-and-mortar store without browsing for more information online, regulators said.
If the product can be purchased only on a company's website, the company can place its disclosure there, regulators said.