Comment Is Free-OFT crackdown on Celebrity Twitter Endorsements

Celebrity endorsement of a product or service is nothing new, but in the evolving world of Social Media, it’s a brand new way for the rich and famous to make themselves and their commercial partners even richer. In the US, Tweeting for sale is already an industry in itself, and it’s a big business – reality TV Star Kim Kardashian and rapper Snoop Dogg are amongst Twitter’s top celebrity earners, with Kardashian reportedly earning up to $10,000 for sending a single Tweet to endorse a product.

Although the law in the UK on Celebrity Tweeting is not as clear as in the US, where the Federal Trade Commission developed guidelines which state that a celebrity Tweet endorsement must contain the words “ad” or “spon” to show that it’s been paid for, this may all be about to change.

In the first case of its kind, the Office of Fair Trading (OFT) has taken action against Handpicked Media, a Public Relations and Marketing consultancy who was found to be paying Bloggers to write reviews or endorsements of their clients’ products, ordering them to clearly state when any comment has been paid for.

“It didn’t take long for Social Media to become a very effective advertising platform, and for Celebrities to embrace the commercial possibilities of lending their name to products in less than 140 characters. Given that Twitter in particular creates a very direct connection between the “Twitterati” and their fans, it can be a very powerful advertising platform. This is why the OFT has taken action against Handpicked Media, who have already agreed not to “engage in promotional activity unless bloggers within its network prominently disclose that the promotion has been paid for”.

The idea of “Flogs” – fake Blogs or Tweets written from the Consumer’s point of view but either created or paid for by marketers has been around for a few years now. Research shows that Bloggers and Users of Social Networks are increasingly Tweeting about brands and businesses to make their opinions known. If the opinion’s good then it’s potentially worth a fortune as genuine and very quantifiable “word of mouth”, which tends to travel very far and very fast.

That is, of course, if it’s genuine. Sony were one of the first to experience a backlash at the end of 2006, when the ‘All I Want For Christmas Is A PSP’ viral campaign was exposed as the product of a ‘consumer activation’ firm. Gamers were not impressed, and took to YouTube to post their own negative video messages about the campaign.

As the OFT’s action shows, “flogging” and, by implication, misleading Tweets are a criminal offence under the Consumer Protection from Unfair Trading Regulations 2008. Regulation 3 refers to “unfair commercial practices”, which it describes as any which “contravene the requirements of professional diligence; and materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product.”

One practice that’s explicitly listed as being unfair is “falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer.” The statutory maximum fine is £5,000, but in more serious cases of a breach of the regulations the maximum sentence is two years’ imprisonment. However, prosecutions can only usually be brought within three years of the date of the offence.

As yet, there have been no actual prosecutions under the Regulations and it’s important to note that this case hasn’t led to a conviction, but the action taken against Handpicked Media shows that the OFT is not afraid to step in where it needs to.

The Marketing and Advertising Industry is arguably learning that fake blogs don’t generate a real return on investment, but a celebrity Tweet can be priceless. Range Rover recently enlisted 40 celebrities (including Daisy Lowe and Ben Shepherd) to drive a new model and then Tweet about the experience. Fashion designer Henry Holland seemed pretty unequivocal: “CAN’T WAIT FOR MY NEW RANGE ROVER..!!!”. Lily Allen and Peter Andre have also jumped on the bandwagon and Estee Lauder ‘s products have regularly tweeted about by Liz Hurley, who has been the “face” of the company since the mid-90s. That fact is strangely missing from her profile.

The OFT’s next step will be very interesting to watch. Although the Advertising Standards Agency’s CAP Code (which will apply to online advertising and Social Media content from March this year) states that advertising must be truthful, not misleading and capable of being substantiated, the penalties for non-compliance are nowhere near as severe as those under the Consumer Protection from Unfair Trading Regulations.

Unless a celebrity brand advocate makes it clear that they’re being sponsored to have a high opinion of a product or service, there’s every chance that they may well be misleading the public by covertly endorsing it. Although the vast majority of Twitter users will be perfectly able to tell when they’re being sold to, protecting vulnerable consumers is something the ASA and OFT take very seriously. Marketers may now have to factor in the cost of defending a prosecution into their ROI, and you can bet that the average Celebrity Tweeter won’t be willing to fund it for them.

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2 thoughts on “Comment Is Free-OFT crackdown on Celebrity Twitter Endorsements

  1. Great post Steve. Interesting to see that in the States such promotional tweets must include e.g. the word “ad”. To be fair, it is basic, decent good practice to be honest and open about promoting material whether on a blog or on twitter. Will indeed be interesting what the OFT does next.

    Best wishes
    Gavin
    LawCloud

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