FTC’s First Twitter Disclosure Crackdown Is A Wake-Up Call

The news that the Federal Trade Commission settled with an advertising agency over an allegedly deceptive Twitter campaign makes it clear that federal regulators are serious about monitoring social media marketing, even on employees’ personal accounts.

At issue was Deutsch LA’s marketing on behalf of Sony’s PlayStation Vita in 2012. The agency set up a campaign asking people to tweet about the hand-held gaming device using the hashtag #GameChanger, but according to the FTC allegations, Deutsch employees also joined in via personal Twitter accounts after being encouraged to do so by a company-wide email.

And because those promotional messages didn’t disclose that Sony was a client, they ran afoul of FTC disclosure rules. Deutsch, which no longer represents Sony, didn’t admit fault, saying in a statement that it settled to avoid long legal proceedings.

The FTC warned marketers last March that its advertising disclosure standards apply to messages posted on social networks. The action against Deutsch was the first time the regulator has gone after a company for skirting those rules on Twitter, but “it’s unlikely to be our last,” Mary Engle, director of the FTC’s Division of Advertising Practices, told the Wall Street Journal.

“As marketers rely more and more on social media to promote their products,” Engle said, “ad agencies, public relations firms, and marketers alike must be clear about reviewers’ financial connections to the touted product.”

It’s enough, the FTC has signaled, for a tweet to include #ad, #sponsored or #client among its 140 characters, and most social media firms understand the disclosure requirements, Stacy Debroff, CEO of Mom Central Consulting, told AdWeek.

Debroff said it’s up to agencies to train employees that the disclosure rules extend to personal accounts. “As ad agencies move from paid ad placements to the viral pathways of social media, they haven’t taken the time to train and familiarize their employees on FTC-required disclosures,” she said. “For a sophisticated ad agency such as Deutsch LA., one would not expect such an amateurish social media disclosure mistake.”