In general, when a celebrity endorses a product in a television commercial or a print ad, consumers understand that the celebrity is being paid to do so.  As with everything else in the world, however, the internet is changing the game. Social media in particular has completely changed how fans and celebrities interact with one another and how consumers receive  advertisements. Specifically, social media allows fans and celebrities to establish a more “personal” relationship with one another, which can make it more difficult for consumers to tell when a celebrity is being paid to endorse a product and when they are just speaking their mind for free as any other “friend” might.  Any lack of clarity where a celebrity endorsement is paid, however, is vulnerable to attack by the Federal Trade Commission (“FTC”). 

The FTC requires that advertisements include a clear and conspicuous disclosure where it is needed to prevent the ad from being deceptive or unfair, and the FTC considers any undisclosed paid endorsement to be deceptive or unfair. If a celebrity is paid for an endorsement – whether a blog post, tweet, video, or other mention – it is considered an  advertisement. And if consumers are unable to tell from the context of the medium and the mention that a celebrity was paid for the endorsement, it requires a disclosure. The ease with which a celebrities can update their social media and reach an audience of millions, however, has resulted in more than a few undisclosed paid celebrity endorsements. This has not gone unnoticed by the FTC. Indeed, the New York Times recently reported that the FTC currently has “open investigations” into companies breaking the rules with undisclosed paid celebrity endorsements in social media.

Unlike television and print ads, it is not yet a given that any product reference by a celebrity in social media is definitely a paid endorsement.  Indeed, it may very well not be.  As a result, it is important for advertisers to avoid any confusion, and in turn their risk of liability, by ensuring that a disclosure is made.  Further, the disclosure should be made regardless of how many characters the endorsement may be limited to.  One method of disclosure in a space-constrained ad is by prefacing the endorsement with “Ad:”.  While any method that prevents consumers from being misled should be sufficient, “Ad:” is the best bet as it is short, succinct, and, most importantly, was recommended by the FTC itself in its recently updated digital advertising guidelines .

Finally, whatever language an advertiser chooses for making a disclosure, the key point is to make sure there is one and that the celebrity’s fans/followers can tell the celebrity was paid, and it is an ad.  In other words, advertisers must ensure that their paid celebrity endorsers are not too discreet when posting a tweet.

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