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Q&A: What the new FTC rules mean to you

Following SocialMedia.org‘s brands-only call last week on the FTC’s new disclosure rules, some folks had some follow-up questions clarifying exactly what these updates mean to them.

Below are answers to the most common questions we received. Remember, I’m not a lawyer (I don’t even play one on TV). But, I have testified before Congress, traveled the country speaking about word of mouth and social media ethics, and spent much of my career pushing to make marketing more honest and trustworthy for everyone.

Before we dig in, remember the big ideas:

  • These rules aren’t new. The FTC is just making it painfully clear that the laws that have applied to advertising in print, TV, and radio for 50 years also apply to social media.
  • These rules only come into effect when two key things happen: 1) You’re running a formal program that is actively recruiting people to endorse you, and 2) You’re compensating them somehow.
  • As the brand, you are 100% liable for your advertising, and you are the one the FTC is going to go after if there’s an issue.
  • If you train your employees, partners, and advocates on proper disclosure — and if you work hard to quickly correct any disclosure failures — you will not be responsible for the actions of rogue employees or advocates.

Q: What about tweets made as part of a sweepstakes entry? What is OK and not OK?

If there’s an FTC rule, it still applies. There are no loopholes for social media — all the rules about sweepstakes still apply.

So, if disclosures are required when promoting a sweepstakes, it wouldn’t be any different just because it’s social media.

Also, if you’re asking people to promote you via a tweet, with a prize as an incentive, that would require disclosure every time.

Q: How does Foursquare play into these new regulations? For example, businesses often offer incentives for users who check-in.

A Foursquare check-in is fairly self-disclosing, so you’re probably safe. The vast majority of Foursquare users are familiar with these offers, so there’s not a big risk of confusion.

Also, think about the big picture: Encouraging a person in your store to post “I am here” (a standard Foursquare check-in) isn’t really asking for an endorsement.

This is a lot different than say, encouraging people to post Foursquare tips saying “Best ice cream ever” in exchange for a free scoop. Not only is this lazy marketing, but without a really clear disclosure explaining the deal, it’s illegal.

Q: Can you clarify how to encourage bloggers / social influencers at an event to say “a word from our sponsors” in a tweet? Are we required to say this with every tweet they post during an event?

Attending an event as a regular attendee doesn’t require disclosure. Attendees can tweet all they want, about whatever they want (good or bad), and you’re completely safe.

Again, the FTC is focused on formal programs, especially ones that incentivize endorsements.

Now, if you’re asking for promotional tweets in exchange for a prize or a free pass — that’s different and would fall under the FTC’s disclosure rules.

Q: How do these guidelines apply to athlete / celebrity endorsements with long-term contracts? What if they tweet voluntarily about the brand or products?

The same rules of celebrity endorsements you’re used to still apply, but the FTC just went out of their way to clarify that they also apply to social media.

If an average person sees a tweet (or any other form of communication) you sponsored as part of a formal program and can’t tell it’s a paid endorsement, it’s a problem.

If a celebrity casually mentions your brand outside of the formal program once in a while, you might be OK. But, if it’s something that happens regularly, you’ll look really suspicious in the eyes of the FTC.

Avoid all of this by training your celebrities like you would any advocate: Require them to make their relationship with you clear whenever they’re talking about you, and correct them when you find that they fail to do this.

Q: How do these FTC rules affect social loyalty programs — such as those rewarding users with social points for sharing your site?

Being a part of a program like this is specifically called out in the FTC’s rules as a primary trigger for disclosure requirements. Programs like these hit on the two keys that bring these rules into play: 1) It’s a formal program, and 2) compensation is involved.

Q: How does this affect tweets / posts from our official brand accounts?

It doesn’t! Your content is clearly from you and will be obvious to users, so there’s no need to disclose.

Just like you don’t need to say at the beginning of your TV commercials, “Heads-up, this is an advertisement from us,” you don’t need to start your own tweets or blog posts with a disclosure disclaimer.

Q: If we advertise on Twitter (paid ads), and they put “sponsored” on the tweet for us, does that count as disclosure?

If you’re using an official sponsored post program on Facebook, Twitter, etc., you’re covered, because it’s obvious to the average user that content was paid for (it’s an ad). You don’t need an additional disclosure announcing it’s sponsored content.

It’s when you sponsor other people’s tweets — that’s when average users wouldn’t expect the content to be paid for, and that’s when you have to disclose clearly and conspicuously that it’s an advertisement.

Q: Our company has developed “corporate personas” for employees who tweet or engage on Facebook as part of business. Their public usernames, for example, look like @NameAtCompany. Where does this fall?

This is a best practice and is better than average disclosure — because it’s clear to everyone immediately who the person works for.

Q: If one of our salespeople comments on a corporate post or promotes the company on their own using their personal account in social media, what disclosure is required?

If employees are promoting their company, they need to disclose the relationship. Employees can’t pretend to be regular consumers who are fans of your posts — because they’re not.

And beyond that, some basic social media training will help these well-meaning employees avoid pitfalls and engage properly. Not only will it keep your salespeople on track, but the FTC has also stated that if you have social media disclosure training and policies in place, employers will not be held liable for the actions of rogue employees.

Q: What does the FTC have to say about retweeting individuals? That is when a company RTs someone who they have not recruited — who is a general fan — what are the requirements?

You’re fine, because this situation doesn’t meet the key requirements for the disclosure rules to apply: This isn’t part of a formal program in which you’ve recruited the advocates, and there is no compensation involved.

So, retweet away and keep thanking the fans that say nice things about you.

Q: Any thoughts on a company that specifically handles social media compliance with custom disclosures? Is this enough in Twitter?

The FTC has made it clear that “custom disclosures” (things like #spon or whatever) are not good enough. If most people wouldn’t recognize the hashtag as meaning that it’s a paid post, then you have a problem. Does you mom or kid know what #spon means? They’d be perfectly clear if you used #ad or #paid.

The FTC recommends using “Ad:” at the beginning of a sponsored tweet, but it’s important to note that alone may not meet the minimum disclosure requirements. If, for example, the sponsored content says the person lost 30 lbs. in 6 weeks, the tweet must also disclose that typical weight loss is 1 lbs. per week.

Q: This is a U.S. decision. Are there other similar requirements in other countries, or should we view the FTC’s guidelines as the most stringent globally?

Meeting these rules is a great start, but it’s not the only rules advertisers need to be aware of — it’s not even the only set of rules in this country.

If you’re a pharmaceutical company advertising prescription drugs, for example, there’s a set of special rules just for you. Retail food advertisers have another set. Wool products? They’re subject to the Wool Products Labeling Act of 1939.

And that’s just domestically. Abroad, there’s nothing stopping the UK’s Advertising Standards Authority from investigating your social media advertising if they want to.

But again — big picture: If you’re running an honest program, proactively training your employees, partners, and advocates on ethics and disclosure, and you fix any disclosure issues as soon as you find them, you’re probably going to be just fine.

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    […] and what you really believe is not only good for your reputation, it’s required by law. The new FTC Guidelines for digital marketing say that no matter where your brand is engaging with customers, you must include clear and […]

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