This post was written by Tom Chernaik, CEO of CMP.LY. At the time I wrote this post, I was working with CMP.LY.
Recent events have brought focus to the digital and social media disclosure requirements for promotions and marketing communications. In the past month, we have seen the FTC hold a daylong workshop on the topic and settle an investigation of Spokeo for $800,000 for violations of both the Fair Credit Reporting Act (FCRA) and for lack of disclosure by employees. Furthermore, Facebook settled a class action lawsuit for a lack of disclosure around its Sponsored Stories product by pledging to donate $10mm to charity and providing users more information this ad product along with new opt-out options.
Most recently, on June 20, the Advertising Standards Authority (ASA) in the UK ruled against Nike and banned a campaign they were running leading up to the Olympics due to Tweets from sponsored athletes about the brand because they lacked the required disclosures.
With the Olympics around the corner, it seems that London has gone a bit mad about the games. Leveraging that excitement, many brands have focused efforts on social media — in particular leveraging sponsored athletes to help deliver their marketing messages. In early April, the Office of Fair Trading (OFT) made public statements about concerns with sponsored Olympic athlete Tweets. The discussion had been brewing since as Tweets were identified in the press about cars, razors and other perks shared with athletes.
Nike was one of the brands cited by the OFT. Back in January, the brand’s campaign was shared in the personal Twitter accounts of two football (soccer in the US) stars, Wayne Rooney and Jack Wilshere. The ASA received a complaint and investigated the matter.
Nike UK responded that both players were well known for being sponsored by the brand and argued that Twitter “followers” would not be misled about the relationship it had with the players. The company further argued that the web address in the tweet was clearly branded as Nike, and that the message carried the company’s known ad tagline — clearly indicating which tweets by the players were personal and which were ads.
Although Nike indicated that the players were free, as part of the campaign, to independently reply or re-tweet consumer tweets at their own discretion, the ASA said it was understood from its investigation that the final content of the tweets was “agreed with the help of a member of the Nike marketing team”.
Social Media Disclosure Must be Obvious
The ASA said the average Twitter user quickly scrolls through many tweets a day and that the marketing code states that ads must be “obviously identifiable”. (Note that this is similar to the FTC’s “clear and conspicuous”.) The ASA stated:
We considered that the Nike reference was not prominent and could be missed. We considered there was nothing obvious in the tweets to indicate they were Nike marketing communications.
It concluded Nike breached the advertising CAP code. As a result, the campaign has been banned and all of the related posts will have to be removed.
Disclosures in social media are nothing new. Since the FTC’s 2009 update expanding the Guidelines for Testimonials and Endorsements, it has been clear that Tweets, Status Updates and other social messages require disclosure. More than the disclosure itself, the FTC requires that marketers:
- Mandate a policy that is in compliance with the law
- Make sure that those who work for them or on their behalf know what the rules are; and
- Monitor for compliance with their policies
In the UK, both the OFT and the ASA have weighed in, stating that disclosures must be included in such messages and clarifying that even celebrities — traditionally a gray area in the US — must disclose their connections to a brand when they are paid or incentivized.
What’s next for social media disclosure?
What have we learned in the past few weeks of activity? We’ve learned that regulators are serious about ensuring that advertising is not deceptive and that sponsorship or other relationships between brands and their advocates are clearly disclosed.
The good news is that the FTC is expected to issue additional guidance for Dot-Com Disclosures later this year. That document was last updated in 2000, when Mark Zuckerberg was a sophomore in high school and before Facebook, Twitter or Pinterest were even an idea. In advance of the FTC guidance, the Word of Mouth Marketing Association (WOMMA) issued an updated draft of their Social Media Disclosure Guidelines this week. (Disclosure: CMP.LY CEO Tom Chernaik is Co-Chair of the Members Ethics Advisory Panel of WOMMA.) The previous version is referenced throughout the FTC’s 2009 update and in the social media policies of countless organizations.
It is our hope that, with this renewed attention from regulators and additional guidance and clarification, marketers will focus on getting attention in all the right ways. We look forward to brands and agencies better understanding that the benefits of transparent disclosures to their client relationships far outweigh the consequences of the alternatives.