In today’s advertising landscape, keeping track of what’s being said on social media might seem to some agencies and marketers like trying to police the wild west. But after the Federal Trade Commission settled charges against Deutsch LA earlier this week for using Twitter to promote a client’s work in a misleading manner, it might be time for Madison Avenue’s ad firms to fine tune their social media marketing strategies, industry executives say.
The FTC on Tuesday reached settlements with Interpublic-owned Deutsch LA and Sony over claims the companies engaged in deceptive marketing during the rollout of Sony’s PlayStation Vita hand-held gaming console.
In addition, the FTC called out Deutsch LA for allegedly encouraging its employees to use their personal Twitter accounts to generate buzz about the PlayStation Vita without disclosing their affiliation to Deutsch LA or to the agency’s client, Sony.
As part of the settlement with the FTC, Deutsch LA is barred from misrepresenting the endorser of a video game product or console as an ordinary consumer. Deutsch LA must also disclose if there’s a material connection between the endorser of a video game product or console and Deutsch LA.
Deutsch LA said it was pleased to have concluded the FTC matter. “In the proposed order, Deutsch LA Inc. did not admit to any violation of the law and sought to resolve all open issues to avoid protracted legal proceedings,” the agency said in a statement. “Deutsch LA, Inc. appreciates the FTC’s staff’s cooperation in bringing this matter to resolution.”
The FTC mandates that endorsers of a product must disclose if they’re connected in some way to the manufacturer of that product. Last year, the FTC released revised guidelines that made it clear that marketers have to apply the same standards– including full disclosures– to short-form ads on Twitter as they have to older media.
According to the complaint, one of Deutsch LA’s assistant account executives sent a company-wide email asking the agency’s staff to promote the PlayStation Vita ad campaign that the agency was working on by posting positive comments about the device on Twitter using the hashtag #gamechanger. Deutsch LA employees posted tweets such as “One thing can be said about PlayStation Vita…it’s a #gamechanger” and “Thumbs UP #GAMECHANGER – check out the new PlayStation Vita,” but didn’t disclose their connection to the agency or Sony. The FTC claimed these tweets were misleading because they didn’t reflect the views of actual consumers who had used the device.
Agencies have to exercise a lot of caution when talking about a client’s work on social media, though best practices in that area aren’t always well codified, said David Berkowitz, chief marketing officer at digital agency MRY.
“This will be a wake-up call for agencies in terms of how they communicate work they have in market and what they encourage employees to do,” Mr. Berkowitz said.
The FTC has taken action against ad agencies for deceptive advertising in the past, but this is the first time that the regulatory body has charged any company for deceptive behavior on Twitter and “it’s unlikely to be our last,” said Mary Engle, director of the FTC’s Division of Advertising Practices.
“As marketers rely more and more on social media to promote their products, ad agencies, public relations firms, and marketers alike must be clear about reviewers’ financial connections to the touted product,” Ms. Engle added.
Some ad executives acknowledge that because Twitter is used so commonly to promote work, it’s hard to control how agency staffers use the platform.
“Almost all agencies probably do this for better or for worse. They encourage people to tweet about their work. That’s what social media is for,” said one ad agency executive. “But there’s a pretty big difference between tweeting, ‘Hey, check out this amazing new product’ versus, ‘Check out our new campaign,’” the person added.
Marketers say operating in a transparent manner on social media isn’t just important to appease regulators, but also to ensure brands don’t lose the trust of consumers.
“Brand trust is paramount,” said Kieran Hannon, chief marketing officer of Belkin International, which makes connected-home devices. “Disclose, disclose, disclose – must be a core brand tenet, even now more than ever given the proliferation of social media and other channels.”
Nathalie Tadena, The Wall Street Journal. November 28, 2014
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