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sara callahan

sara callahan Owner/President

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FTC Social Media Ruling Puts Businesses on Alert


It’s no secret that the FTC has been monitoring brand usage of social media. The hammer finally fell when the FTC ruled last week that companies and agencies utilizing social media must include disclaimers. This is regardless of the social media platform and whether or not the account is a brand account, an agency account, or company employee’s personal account – and yes, this does mean compacting a disclaimer into 140 words for Twitter.


According to an Adweek article, the ruling originated from a settlement between the FTC and Deutsch L.A., an ad agency.  While promoting the Playstation Vita, Deutsch L.A. ran a Twitter social media promotion utilizing the hashtag #GameChanger. It then sent e-mails to its employees asking them to participate using their personal accounts. The FTC ruled that this violated “the FTC’s stance that brands have to have full disclosure on marketing materials no matter what medium the ad is on.”


According to the article, the crux of the FTC’s stance is as follows:


“...even statements made on personal social media accounts need to be transparent if there may be any brand bias…”


Small businesses of all kinds are affected by this ruling, including public relations agencies, automotive vendors, and even car dealerships. We all need to be aware, and train our employees, that, while it’s certainly appreciated when they promote and/or participate in a social media campaign on our behalf with their social media accounts, they are not exempt from the FTC’s rules. Failure to comply – regardless of if those actions originate from the brand, or a person with a bias towards a business (such as an employee) – is irrelevant. The business can be held liable for their employee’s actions.


As social media usage becomes more important in business’ exposure and branding, I expect that these rules will become more black and white.

What does this mean?


For businesses, it means that when sharing client or employer content and messages on personal accounts, this content now has to include disclosure of bias. For tweets, including hashtags such as #client, #sponsored or #employee at the end of the tweet should be sufficient. 


On platforms in which more text is available to use (such as Facebook), disclaimers should be easily understandable and unambiguous to a reader. These could be as simple as an indication that this is a client or that the person posting the content is an employee.


This may seem irrelevant; but it’s actually very relevant. Think of all of your engaged and loyal employees who are supportive of brand messages, contests, and company events that share and encourage their friends to participate using their personal social media accounts. Perhaps they share the company’s Facebook ads – including specials, coupons or offers – to their networks.


Different platforms require different details to increase exposure. For example, hashtags are an excellent way to generate buzz and consolidate a conversation on Twitter amongst a brand and its fans. Hashtags are also relevant on Facebook. However, the uphill battle on that platform is via the Facebook newsfeed algorithm. While it’s unlikely any of your employees are trying to game the system, actions such as liking, commenting and sharing certainly effect the reach of those messages. And employees (or agencies) who share without bias disclosure run the risk of being accused of gaming the system by the FTC.


Just as it’s highly unlikely the FBI will break down your door for recording a movie, the chances are small that our businesses will gain the attention of the FTC regarding these social media postings. That doesn’t mean the possibility doesn’t exist, however, and the FTC is notorious for being very vigilant with car dealerships and advertising compliance. Chances are that your dealership’s social media usage won’t attract the FTC’s attention alone. But should you find your dealership under a compliance audit and/or under FTC scrutiny for misleading advertising, it’s more likely than ever before that they may include your social media activities in the future.

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