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FTC Sets Rules on Twitter Advertising

Tuesday, March 19th, 2013

Do you use Twitter to promote your business or its products or services? If so, let’s take a test on whether a promotional tweet complies with the law.

Suppose you make swim fins and you hire Olympian Ryan Lochte to tweet good things about your product. Would it be OK if he sent this tweet to promote your “SwimShark” brand fins for you?

“Got SwimShark fins. Best training fins ever! Dropped 2 secs in 100 free race. bit.ly/SwimShark.” The last part is a link to your online store where you sell the fins.

See anything wrong with that tweet? The Federal Trade Commission would.

The FTC just issued guidance on advertising in social media, such as Facebook and Twitter. I can’t cover it all in a column, but below are a few nuggets about Twitter advertising.

First, some background: The FTC is empowered to attack unfair or deceptive trade practices, such as misleading ads. It can sue you for civil penalties if you cross the line.

While the FTC doesn’t have the resources to go after every violation, things that cross the line with the FTC might also get you in trouble with a state’s attorney general or with the regulators of your particular industry. Certain conduct also might create a claim against you by a competitor for false advertising and might get your account suspended by Twitter.

The FTC demands that all advertising be truthful, not misleading, and that claims of product or service efficacy be substantiated.

So what’s wrong with the tweet about SwimShark fins?

Unless it’s obvious that a tweet is an ad, you have to label it as an ad. And if you’re paying someone to endorse your product, or if you give them free product in exchange for a review, that must be revealed.

In this case, you paid Lochte to endorse your fins, so the FTC recommends that the tweet start with “Sponsored:”

The FTC said it would not be sufficient to put the hashtag “#spon” in the tweet because many folks would not understand it to indicate a sponsored endorsement.

Also, the FTC said such a disclosure needs to start the tweet, not be stuck at the end.

Even if all you did was give Lochte a free pair of fins to use, he’s got to disclose this in the tweet.

If your company sent a tweet touting Lochte’s approval of your product, the FTC recommends you start the tweet with “Ad:” to make clear its an advertisement.

The other problem is that Lochte’s tweet implies you can get incredibly faster by training with these fins. In a 100-yard freestyle race, an elite athlete dropping even a couple of tenths of a second is a major improvement, so claiming you can drop two seconds is pushing it.

At the least, any such claim of amazing performance must be substantiated. If Lochte didn’t achieve the result, you can’t say it.

Even if he did, you need to squeeze into the tweet that such a result isn’t typical.

So, a better tweet from Lochte might read like this: “Sponsored: Got free SwimShark fins. Best training fins ever! Dropped 2 secs in 100 free. Results not typical. bit.ly/SwimShark.”

Or, if you send the tweet instead of Lochte, you could say this: “Ad: Paid endorser Ryan Lochte says SwimShark fins best training fins ever. He dropped 2 secs in 100 free. Results not typical. bit.ly/SwimShark.”

The FTC also said giving a disclaimer (such as one about typical product performance) in a tweet solely by including a link to a webpage containing a disclaimer usually won’t cut it.

It also added that putting a disclaimer in the tweet after the link to where you are selling the product online isn’t OK, because some folks won’t notice that the disclaimer is separate from the link.

In addition, it noted that you can’t just put the disclaimer in a subsequent tweet. Some people get lots of tweets, so the follow-up tweet might come in someone’s Twitter feed well after the promotional tweet.

The FTC’s guidance is much deeper than these examples, and some regulated industries have additional advertising rules or guidelines to follow.

But the key thought is to be candid, not deceptive. Don’t let your promotional tweets become mockingbirds.