Reminder: The Government Will Apply Its Old Rules to Your Modern Social Media Campaign

Posted by Edward Sharkey on Thu, 04/02/2015 - 04:00

We previously posted about the Federal Trade Commission’s effort to warn businesses that online marketing campaigns are subject to the same rules as traditional forms of advertising, like radio and print ads. Charges recently filed by the FTC against an advertising agency are a good reminder of this reality.

The charges arose out of the agency’s use of a hashtag to market its client’s product on Twitter. The agency was working for Sony to advertise the handheld game console PlayStation Vita. It ran television and radio ads that included #GAMECHANGER. The purpose of the hashtag was to induce consumers to read about the Vita on Twitter. The agency encouraged its employees to “generate buzz” about the Vita by tweeting about the product using #GAMECHANGER. Several employees did so from their personal Twitter accounts.

The FTC charged that the tweets were unlawfully deceptive because they did not contain a disclosure regarding the relationship between the employees and Sony. Without such a disclosure, the tweets falsely appeared to be independent reviews.

To resolve the charges, the advertising agency agreed to a consent order that requires it to, among other things, (a) remove the offending tweets, (b) for five years, make pertinent records available to the FTC for inspection, and (c) avoid posting additional tweets that do not contain a disclosure. The FTC is in the process of approving the proposed order. Once it becomes final, the agency would be subject to hefty monetary penalties for violations of it in the future.

Businesses need not be reticent to use online advertising. They need only be disclose the connection between themselves and their online campaigns. While this may hinder the ability to create viral buzz using social media, the government is interested that no one be misled. The FTC’s guidance for such disclosures is worth a read for any business that intends to use social media to market its products or services.

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