Advertising through Social Media: Disclosing the Facts

Advertising through Social Media: Disclosing the Facts

<p>Promoting products on Twitter can be an effective form of advertising to reach a large number of consumers instantaneously. However, companies must be acutely aware that social media advertising is not a realm without rules.</p>

How many followers? The answer to this question, asked with ever-increasing frequency lately, doesnt pertain to the number of true believers in a newly created cult (although those who still use typewriters and snail" mail might view it that way). Instead, this question is an inquiry into how many people are reading comments posted on one of the more well-known social media sites, Twitter. The more followers, the wider dissemination of the tweets" posted. While some use Twitter to muse about the latest movie or political issue, advertisers have discovered Twitter can be an effective means of promoting all kinds of products, including food, beverages, dietary supplements and cosmetics. However, advertising messages posted on social media sites do not go unchecked. Companies tweeting," texting and posting about products must still comply with the laws and regulations that govern advertising and marketing claims.

Twitter 101

For those who do not regularly tweet," twitter.com is a website that offers a social networking and micro-blogging" service, allowing its users to send and read other users messages, called tweets." Individuals or companies may sign up for free and create their own Twitter pages, identified by unique user names. Companies that do not have their own Facebook, Twitter or other social media pages are behind the curve in promoting their products. Each tweet may contain up to 140 characters, counting letters, spaces and punctuation marks as separate characters. While a tweet may only consist of text characters, links to photos, articles and other information can be provided and disseminated to followers. With the number of tweets per day exceeding 340 million, tweeting has become an attractive and inexpensive method of generating buzz" about products. Similarly, many companies choose to promote products by sending out a text blast pursuant to a SMS (short message service) marketing campaign. While these advertising platforms have become popular, there is also the potential for abuse, which is why regulators are taking a closer look at claims made through social media.

FTC Regulation of Social Media

Two federal regulatory agencies may have concerns about the tweets posted by companies in the food, beverage, dietary supplement and cosmetic industriesFTC and FDA. FTC is the federal agency authorized to regulate advertising. As social media outlets have continued to rapidly increase, social media advertising has likewise grown in popularity, and FTC has found it necessary to modify its regulation of such advertising as well. FTC revised the Guides Concerning the Use of Endorsements and Testimonials in Advertising" (FTC Guides) in December 2009, with specific additions directed to the emergence of social media advertising. In May 2012, FTC held a public workshop to consider the need for new guidance concerning advertising and privacy disclosures in online and mobile environments. Clearly, social media advertising is on FTCs radar.

Advertisements on Twitter or other social media outlets are held to the same standards as other, more traditional forms of advertising. Each advertisement must be truthful, not misleading and substantiated; in the case of health claims, that substantiation must be in the form of competent and reliable scientific evidence. In addition to these general guidelines for advertising, advertising in the form of endorsements and testimonials must meet other requirements. Any material connections between the endorser and the company responsible for the product must be disclosed., In addition, if the benefits touted in an endorsement are not representative of the generally expected results for a consumer of the product, the generally expected results must be disclosed.

Ensuring tweets are truthful, not misleading and substantiated is pretty straightforward: dont lie, dont imply something that isnt true, and make sure you can back up what you say. However, tweets that endorse products carry some additional difficulties. With a limit of 140 characters per tweet, it can be very difficult for a tweet to convey the desired message and also contain appropriate disclosures. For example, celebrities and other endorsers must disclose they are getting paid to promote a product if it is not clear to a significant number of readers that the author of the tweet is a paid endorser. If Twitter had been around when Michael Jordan was a ubiquitous presence in promoting sneakers and sports drinks, it would have likely been unnecessary for him to disclose he was a paid endorser. However, links between many celebrities and products are not so obvious and may require disclosure of material connections, such as financial compensation or personal ties to the company promoting the product. While FTC has indicated such disclosures may be made in any form that properly conveys the respective connection, such as #paidad" (known as a hashtagged" phrase in the Twittersphere), such disclosures still require the use of some of the limited 140 characters available for each tweet.

Weight-loss testimonials can also be difficult to make in a manner that is compliant with the FTC Guides when they are made on a social media platform with limited space such as Twitter, if disclosures are necessary. Endorsements or testimonials that relate the experience of a consumer using a product are presumed to be representative of what consumers will generally achieve when using the advertised product. If the endorsers experience is not representative of what consumers will generally achieve, the advertisement must clearly and conspicuously disclose the generally expected results. Thus, tweets that contain specific examples of weight-loss must either be representative of what consumers can generally expect if they use the product, or the tweet must also contain a disclosure of what the typical results are. Again, with limited space, such disclosures may be tough to squeeze in. Both the National Advertising Division (NAD) and the Electronic Retailing Self-Regulating Program (ERSP) of the National Advertising Review Council have issued decisions regarding disclosures for weight-loss claims on social media outlets. Both cited the FTCs Guides and the failure of companies to provide proper disclosures of expected results. While the promise of fast and easy advertising spread quickly to the masses is tantalizing for a company, a company opting for such advertising must ensure tweets comply with the guidelines for advertising or face action from the FTC and other advertising watchdogs.

FDA Regulation

FDA also reviews the tweets of companies in the industries it regulates. While FTC primarily regulates advertising, FDA has the primary task of regulating labeling. Although tweets may not satisfy the regulatory definition of labeling," (i.e., all labels and other written, printed or graphic matter (1) upon any article or any of its containers or wrappers, or (2) accompanying such article"), FDA may, nonetheless, still review the tweets of a company, as it does with other advertising, to determine a companys true intended use of a particular product.

In determining whether certain claims are legally permissible for food products, FDA looks to the intended use of a product. If a product is intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease in humans or animals, it meets the definition of a drug by FDA. FDA has defined intended use" as the objective intent of the persons legally responsible for the labeling. Objective intent may, for example, be shown by labeling claims, advertising matter or oral or written statements by such person or their representatives." Thus, the identification of a product as a dietary supplement on the label doesnt definitively make it a dietary supplement if the companys actions through other statements displays a contradictory intent. FDA may look at a variety of labeling and advertising sources, including websites, brochures, television advertisements and, more recently, statements and claims made on social media platforms.

While FDA has not taken action against any company solely on the basis of statements made through social media outlets, claims made on Facebook and Twitter have been cited in FDA warning letters as additional evidence of the intent to sell food or supplement products for disease-prevention or cure purposes. In April 2012, FDA sent a warning letter to an Ohio company for a caffeinated water product that FDA alleged was really a drug due to the actual intended uses of the product. In that letter, FDA cited references made on the companys Facebook and Twitter pages to an article that discussed caffeine and its links to lowering the risks of depression, cancer and Alzheimers disease as further evidence that the product was really intended to cure or prevent one or more diseases. In December 2011, FDA sent a letter to a New Jersey supplement company regarding its Triple Flu Defense" formula. As further evidence of the intent to sell the product as a drug to treat influenza, the FDA cited claims made on Facebook and Twitter about flu prevention. Another letter to a company in August 2011 cited claims made on Twitter about fighting cancer as additional evidence of the intended use of the companys product as a drug.

Advertising  in short bursts must comply with the same guidelines as other forms of advertising, even when restrictions on space make compliance more difficult. Additionally, claims may be used by FDA to help establish the true intended use of a product. So, tweet away, but do it with the knowledge that more than just consumers are following you.

Follow Natural Products INSIDER on Twitter at @NatProdINSIDER, and like us on Facebook.

Justin J. Prochnow is a shareholder attorney in the Denver office of the international law firm of Greenberg Traurig LLP. His practice concentrates on legal issues affecting the food and beverage, dietary supplement and cosmetic industries. He can be reached at (303) 572-6500 or prochnowjj@gtlaw.com; follow him on Twitter @LawguyJP.

This article is issued for informational purposes only and is not intended to be construed or used as general legal advice. The opinions expressed are those of the author exclusively.

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