Celebrity twitter endorsements are becoming big business in both the US and abroad. Notable celebrities such as Snoop Dog and Kim Kardashian can reportedly command anywhere between US$3,000 to US$10,000 dollars a tweet. (Previously blogged about here) Meanwhile, both US and European regulators face a difficult task in determining whether to regulate the content of such paid endorsements and how to evaluate whether disclosures of the business connection between the star and the manufacturer are meaningful and prominent.
In a precedent-setting enforcement action, the UK’s Office of Fair Trading (OFT) launched an investigation this past December into a British PR firm, Handpicked Media, for secretly paying celebrities to endorse products on Twitter - an alleged violation of UK consumer protection law. Handpicked Media cooperated with the OFT throughout the investigation and ultimately agreed through signed undertakings to clearly identify when promotional comments have been paid for.
In connection with the investigation, the OFT issued a statement noting that “online advertising and marketing practices that do not disclose they include paid-for promotions are deceptive under fair trading laws.” The OFT emphasized that the regulations apply equally to "comments about services and products on blogs and microblogs such as Twitter." The press release is available here.
In October of 2009, the US’s Federal Trade Commission (FTC) addressed the issue of paid-for celebrity testimonials on blogs and social media sites when it issued revised guidelines governing the use of endorsements and testimonials in advertising. These guidelines indicate that bloggers and other word-of-mouth marketers may be considered endorsers in some circumstances, meaning that any “material connections” between advertisers and endorsers must be disclosed and that companies could be held liable for any claims the endorsers may make about their products. (Previously blogged about here.) The FTC guidelines also make clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional advertisements, such as on talk shows or in social media, where it may not be apparent to viewers that the celebrities are being compensated for supporting a product or service.
However, the very nature of Twitter may make it difficult for celebrities to abide by such requirements. How does a celebrity adequately declare connections to certain brands in fewer than Twitter’s 140 character limit? Some Twitter users (both the celebrity and the non-celebrity variety) have begun to include the hash tag #spon for sponsored Tweets; and the hash tags #paid and #samp when they receive a payment or a sample product in exchange for a Tweet. Other creative options likely are available -- the key is clear and conspicuous disclosure.