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Marketers have been paying celebrities to endorse their products and services for decades, so it's no surprise that there's a booming market for celebrity endorsements via their social media profiles.
With the help of companies like Ad.ly, celebrities and 'influencers' are reportedly earning thousands upon thousands of dollars for a single tweet or Facebook status update.
In the United States, marketers paying high-profile individuals to tweet and blog about their products worried the Federal Trade Commission (FTC) so much that it developed guidelines around the practice.
Now Britain's Office of Fair Trading (OFT) has something to say about the subject too. According to The Guardian, it is investigating blog network Handpicked Media. The OFT's concern: that Handpicked Media was being paid by marketers to publish blog posts about their products and services.
The problem: the apparent lack of disclosure that the content was essentially paid for. As the OFT sees it, paid promotion without disclosure is "deceptive."
If the OFT moves aggressively to regulate these types of social media promotions, it could ensnare a number of major brands. As The Guardian notes, Range Rover recently developed a campaign in which celebrities and other social media 'influencers' were loaned a new Range Rover and encouraged to promote their use of it via outlets like Twitter. At least some of the posts and tweets published would seemingly upset the OFT as they didn't contain any disclosures.
Naturally, full disclosure is hard to provide when one is limited to 140 characters. That's one of the reasons that the FTC guidelines consider the inclusion of the words 'ad' or 'spon' to constitute disclosure. But it's still unclear whether such disclosures really tell consumers anything they don't already know.
When Kim Kardashian tweets about a fast food restaurant, for instance, one has to believe that a good number of her followers who are actually paying attention and see the tweet already know that it was probably little more than a paid advertisement. After all, many of the celebrities that are being paid to promote products and services on their social media profiles are active endorsers outside of social media too.
From this perspective, efforts to regulate paid social media promotion are probably 'protecting' consumers in an area in which little protection is really needed, no matter how well-intentioned they are. In reality, social media will eventually regulate itself.
Many celebrities and other 'influencers' will likely become more selective in what they choose to promote, and may look to tie social media promotions to larger multi-channel endorsement relationships. And marketers, realizing that online influence may be harder to quantify than thought, will become more sophisticated about who, if anybody, they pay to tweet, and what gets tweeted.
Photo credit: david_shankbone via Flickr.