FTC tells celebrity endorsers on Twitter: Disclose all

Next time some pop star tweets about how great a product is, she's going to have to be clear if she's getting paid for it.

By Bruce Kennedy Mar 15, 2013 3:45PM

File photo of smartphone displaying Twitter logo (© Soeren Stache/dpa/Corbis)The next time your favorite celebrity mentions some product via Twitter or other social media, she's going to have to let you know if she's being paid for that endorsement.

Twitter's hundreds of millions of users mean one endorsement, made innocently or otherwise, can dramatically boost a product. No wonder, the microblogging service's advertising revenue is expected to reach $540 million next year, according to statistics compiled by the British firm SBW Advertising. Several months ago, MSN Money cited an example of how pop star Justin Beiber's turnaround on Uggs boots -- and his tweet about how he liked them -- may have helped that company's fortunes.

With all that in mind, the Federal Trade Commission just updated its guidelines for mobile and other online advertisers, on how to make those disclosures clear, conspicuous and deception-free.

The challenge, it appears, involves Twitter and other, short-form messages consumers get on social media. To illustrate that challenge, the FTC created a fictional celebrity, "JuliStarz," and had her issue the following fake Tweet:

"Shooting movie beach scene. Had to lose 30lbs in 6 wks. Thanks Fat-away Pills for making it easy. Bit.ly/f56."

The FTC says that tweet wouldn't hold up to its standards for several reasons. First of all, it doesn't disclose that JuliStarz is a paid endorser for Fat-away. It also doesn't specify that the amount of weight Ms. Juli supposedly lost isn't the standard result for the product.


And there's another issue: Given the nature of tweets and streamed messages, having a separate tweet from JuliStarz with a disclaimer (that she's a paid endorser and her results are not the standard for the product) would be "problematic," according to the FTC, "because unrelated messages may arrive in the interim." And by the time the subsequent, disclosure message did show up on a consumer's Twitter feed, that person might have gone elsewhere or not realize the link between the two messages.


The new regulations also says advertisers using "space-constrained" ads on social media platforms should avoid making any disclosures via pop-ups, since they're often blocked by the consumer's computer software.


As L.A. Biz points out, the new guidelines will probably be most upsetting to marketers "who have stealthily infiltrated Twitter celebs to sell their products."


"Many celebrities may not want to be exposed as selling out," it notes, "and may forgo the extra cash rather than add the hashtag #PaidEndorsement on a tweet."

More on moneyNOW

Mar 15, 2013 4:19PM
Good.....i believe the idea behind it is good....but as always happens with the government, somebody.....somewher will twist it so it becomes another tool to **** the poor......and not to find wrongdoing.....jejejejeje
Mar 18, 2013 12:24AM

Graustark...The Media, on Airwaves and probably on Internet Broadcasts;...Are watched and controlled by the FCC....If you think something is outright lies or completely illegal; I'm pretty sure you can file a complaint against them with the FCC...


Mar 17, 2013 10:30PM
Ahhhhh! And the next time some journalist writes an article for MSN Money the journalist and anyone associated with him or her should make it clear if they are getting paid for writing the article, how much they were paid or how much their employer was paid, the identity of the person or entity who paid them and the date or dates they were paid. They should also disclose any other consideration in addition like who got to stay at somebody else's vacation home, whose children got into the right schools, or any other favors of value which were done in compensation for the article.
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?


[BRIEFING.COM] The major averages ended the midweek session with slim gains after showing some intraday volatility in reaction to the release of the latest policy directive from the Federal Open Market Committee. The S&P 500 added 0.1%, while the relative strength among small caps sent the Russell 2000 higher by 0.3%.

Equities spent the first half of the session near their flat lines as participants stuck to the sidelines ahead of the FOMC statement, which conveyed no changes to the ... More