FTC: No, Agencies Can’t Ask Staffers to Casually Tweet Nice Things About Clients

A cautionary tale about disclosure in social media

As brands push their messages through social media platforms like Twitter, the Federal Trade Commission is reminding marketers they need to disclose any bias on their promotional materials—even if they only have 140 characters to do so.

Last week, the FTC and Deutsch L.A. reached a settlement regarding the agency reportedly using social media to promote a client's work without disclosing its bias. In 2012, Deutsch L.A. promoted the PlayStation Vita, creating a Twitter campaign that asked users to tweet positive statements about the hand-held gaming device with the hashtag #GameChanger. According to court documents, not only did the agency encourage the public to do so, but one of the assistant account executives sent a company-wide email encouraging employees to do the same. Many obliged the request on their personal Twitter accounts but did not disclose that PlayStation Vita was a client, violating the FTC's stance that brands have to have full disclosure on marketing materials no matter what medium the ad is on.

PlayStation is no longer a Deutsch account; BBH has handled the video game company since 2013. And, the agency told Adweek, under the terms of the settlement, Deutsch L.A. did not admit to breaking any law and decided to resolve the case in order to skip prolonged legal battles.

However, the implications of the court case—that even statements made on personal social media accounts need to be transparent if there may be any brand bias—will resonate throughout the industry. Mary Engle, director of the FTC's Division of Advertising Practices, acknowledged to The Wall Street Journal that while this was the FTC's first case regarding Twitter and misleading behavior, "it's unlikely to be our last."

Stacy Debroff, CEO of social media firm Mom Central Consulting and a former litigator, pointed out that most social media firms know the FTC requires disclosure on all postings, and simply adding #client or #sponsored would have sufficed. While employees may not know the rule extends to their personal accounts, their agency is responsible for educating them. "As ad agencies move from paid ad placements to the viral pathways of social media, they haven't taken the time to train and familiarize their employees on FTC-required disclosures. For a sophisticated ad agency such as Deutsch LA., one would not expect such an amateurish social media disclosure mistake," she stated.

Jeff Dachis, co-founder of Razorfish and current chief evangelist of Sprinklr, said he was surprised the FTC chased after Deutsch L.A. given that it's a common industry practice to ask agency employees to publicly support their work. He believes the government agency "over reach[ed]" considering it didn't seem like Deutsch was trying to game the system and just wanted to build buzz for its campaign. 

"I think the FTC may have been piling on with the additional action against Deutsch L.A. to ensure that they were sending a message to the marketplace," he commented. "There are many people in the agency world that have influence in social channels, and they should use good judgment with disclosures if an agency is going to employ a strategy that benefits from that influence on behalf of clients and is receiving remuneration as a result."

However, James Percelay, co-founder of Thinkmodo, said in his experience it's not common to ask employees to promote their own work. He agreed with Dachis that Deutsch L.A.'s intent was probably "overenthusiasm for its campaign, not malice." But he said he believes the agency wasn't employing a sound strategy by tooting their own horns. Allowing organic support through social media is what is most valuable to a brand, so hashtags should be allowed to go viral on their own merits. "Once it starts to become manipulated, it undermines its effectiveness," he pointed out.

It's not necessary to ask employees to promote campaigns through their personal accounts, said Alyssa Galella, director of earned media at Huge. Campaigns should already have a solid launch promotion strategy that includes owned, earned and paid media. If employees are proud of their work and feel compelled to tweet about it, Huge allows them to do so—as long as it follows the letter of the law as well as client confidentiality agreements, Galella added.

"In situations like that, it's probably better to stay away from posting about the client's campaign at all," she said.