14 Mar 2013

How should you handle the new FTC social media regulations?

Recently, the Federal Trade Commission (FTC) released an update of its regulations governing online advertising (PDF) to include social media. The scope of the FTC’s guidance covers any form of paid advertisement, and things like disclosures must be bundled into your ad-powered content.

Here’s the golden rule behind all of the FTC’s guidelines: if money is changing hands, obvious disclosure must occur in-ad.

For example, in the document, a paid Tweet should generally start with the words “Ad:”. This applies whether you’re using Sponsored Tweets, Promoted Posts, etc. or using paid evangelists or spokespeople who are promoting on your behalf. In combination with the FTC’s updated rules on endorsements (PDF), these new guidelines may even apply to your employees and what they share (16 CFR 255). Here are a few examples, based on the FTC guidelines.

1. Not okay: Social posts with disclosures that are separated from the ad content:

SHIFT Communications (SHIFTcomm) on Twitter

2. Okay: Social posts with in-content disclosure:

SHIFT Communications (SHIFTcomm) on Twitter

3. Okay: For agencies, disclosing the relationship:

SHIFT Communications (SHIFTcomm) on Twitter

4. This example illustrates why the disclosure must be in-ad – a retweet doesn’t carry along separate disclosures:

Christopher Penn (cspenn) on Twitter

5. Not okay: An employee sharing an ad without disclosing the relationship:

Christopher Penn (cspenn) on Twitter

6. Okay: An employee sharing an ad with relationship disclosure in-content:

Christopher Penn (cspenn) on Twitter

Our general recommendations are simple and straightforward for all clients, employees, partners, vendors, and friends:

  1. Read the actual documents. Don’t just rely on the news stories. The actual documents are linked above. Read them, and give them to your lawyer if they don’t have them already.
  2. Obey the golden rule above: if money changes hands, obvious disclosure may occur.
  3. Cultivate a community of unpaid evangelists and fans by being the best-in-class for your industry. Unpaid, unsolicited endorsements are not only the best from a PR/earned media perspective, they’re also exempt from these FTC regulations.
  4. Play it safe until sufficient case law is developed. If you have to question whether an ad is legal, rework it until you’re sure it’s legal.
  5. When in doubt, ask a lawyer.

Finally, a disclosure of our own. Despite the FTC’s best efforts in making a plain English document, there are still enough points that are sufficiently vague that could be problematic. Follow point #5 above: when in doubt, ask a lawyer. I’m not a lawyer, and SHIFT Communications is not a law firm. Don’t take this post as legal advice – ask a real lawyer if you have more specific questions on the FTC regulations.

We would welcome any actual lawyers to add their comments and perspectives!

Christopher S. Penn
Vice President, Marketing Technology
Not a Lawyer

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