Compensated Twitter Mentions Should Be Disclosed

Today, when celebrities and people with large followings on social networks promote a product or service, it’s often impossible to know if it’s an authentic plug or if they were paid to say nice things about it.

Thanks @blackjet for the flight to Silicon Valley! #wecantstop
— Miley Ray Cyrus (@MileyCyrus) June 3, 2013

Take Miley Cyrus, according to the NYTimes, the 20-year-old was traveling around America last week promoting her new album. One morning she posted on Twitter: “Thanks @blackjet for the flight to Silicon Valley!” The details of the arrangement between Blackjet, a Silicon Valley start-up that arranges for private jet travel, and Ms. Cyrus are unclear. But Dean Rotchin, chief executive of BlackJet, said “she was given some consideration for her tweet.” Ms. Cyrus did not respond to a request for comment.

Did her 12 million Twitter followers know about the arrangement? It’s unlikely, and that lack of clarity, increasingly common in the social media postings of celebrities, is starting to draw the attention of federal officials.

“In a traditional ad with a celebrity, everyone assumes that they are being paid,” said Mary K. Engle, associate director of the advertising practices division at the Federal Trade Commission. “When it’s not obvious that it is an ad, people should disclose that they are being paid.”

Under F.T.C. guidelines, companies and the celebrities they are sponsoring risk being deceptive by not noting that these endorsements are advertisements, Ms. Engle said. Sometimes, they are breaking federal rules called “Dot Com Disclosures” that require clarity about sponsorships, even on Twitter. People who violate the law can be given warnings or be fined, though the size of the financial penalty isn’t clearly defined.

Read More Now.