FTC Demands Full Disclosure in Celeb Endorsements on Twitter, Other Social Media

Despite the limited number of characters in a tweet, celebrities must still be transparent when they are being paid to endorse a product

Celebrity endorsers have come under fire again from the feds — and this time the issue is full disclosure when they are being paid for engaging in social media.

After an incident when Lauren Bacall showed up on “Today” promoting a drug without disclosing she was being paid, the Federal Trade Commission warned celebrities — and the marketers that use them — about not disclosing paid endorsements. It afterward took steps to ensure bloggers disclose when they are being compensated for their comments.

Also read: FTC Cracks Down on Celeb Endorsements

Now the FTC’s focus is social-media endorsement, most obviously through Twitter but involving any mobile message.

The commission, in an update Tuesday of its guidance on digital disclosures, is making clear that despite the short number of characters in a tweet, celebrities must still be transparent about compensations.

It also suggested that in most cases, the disclosure must be in the endorsement message itself — not a linked website or a separate tweet.

The FTC’s guidelines are intended to suggest what behavior the FTC would view as problematic, but violations by themselves don’t carry any immediate penalty. The commission, however, could use the violation as evidence to open an enforcement case.

Most enforcement cases involving celebrities have been directed toward marketers rather than the celebrities..

The FTC cited as an example a celebrity “JuliStarz” endorsing a weight-loss product in a hypothetical 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 said the tweet would fail its disclosure rules on two counts. First, it doesn’t make clear that JuliStarz is a paid endorser. Then it fails to disclose that the weight loss isn’t average for the product.

The FTC guidance also makes clear that a separate tweet saying, “I am a paid spokesperson for Fat-away Pills. Typical weight loss 1 lb/wk” doesn’t meet the requirements because some people seeing later tweets might not notice it.

Betsy Lordan, an FTC spokesman, said there wasn’t any specific incident involving a celebrity that prompted the change.

“The means of conveying ads have changed in the 12 years since the guidelines were last issued, and we wanted to make the guidelines more relevant,” she told TheWrap.

She also said that while the latest guidelines include tweets, the changes are intended to reflect broader issues raised as marketers reach out to consumers on mobile phones and other devices with small screens.

The FTC makes clear that the small screens don’t take away marketers responsibility for disclosure. Indeed in some cases, marketers may have to offer consumers more disclosures when consumers get information are provided information on multiple screens instead of a single screen.

"The same consumer protections laws that apply to commercial activities in other media apply online, including activities in the mobile marketplace," the FTC said in its guidance. "Required disclosures must be clear and conspicuous."