FTC Gets Tougher On Unethical Social Media Marketers and Business Owners

Peter Roesler, President - Web Marketing Pros

By Peter Roesler

President, Web Marketing Pros

internet-marketingPromoting and enforcing ethics among business owners and marketers can be tricky. There are many people who feel that anything they can get away with is ethical by default. In the internet marketing age, where a lot depends on fan counts and engagement numbers, there has been a large incentive for business owners and marketers to do ethically questionable things to get the results they want. Recent announcements and actions from the FTC suggests the agency will start aggressively pursuing instances of unethical social media and internet marketing.

The internet and social media have created a lot of new ways for business owners and marketers to connect with their audiences. At times, these platforms can feel like the wild west of advertising since there don’t appear to be specific guidelines on the legality of certain tactics and there is a lack of understanding about what qualifies as ethical or unethical behavior.

The FTC is trying to combat these issues by informing internet marketers about their ethical obligations and that all laws that govern traditional advertising platforms apply to the internet as well.

“Cyberspace is not without boundaries, and deception is unlawful no matter what the medium,” the FTC wrote in their .Com Disclosure Guidelines. “The FTC has enforced and will continue enforcing its consumer protection laws to ensure that products and services are described truthfully online, and that consumers understand what they are paying for. These activities benefit consumers as well as sellers, who expect and deserve the opportunity to compete in a marketplace free of deception and unfair practices.”

One example of a common practice that the FTC will start examining with more scrutiny are social media contests. Most social media contests work by getting people to perform some kind of engagement action as a means to enter. The problem with this is that people who are posting pictures with a hashtag for a contest, are giving an endorsement for the product without properly disclosing that they are being incentivized to do so. To the FTC, this is deceptive to people who see the posts as uninfluenced content from their peers.

This principle was actually used against a marketer last year. A Pinterest hashtag contest by Cole Haan’s shoes was flagged by the FTC, who sent the company a warning letter.

By updating the general guidance for these issues on various FTC web pages, the FTC will probably move away from warning letters to more aggressive enforcement. A system where everyone gets at least one warning letter is a poor policy, because it means everyone can be a flagrantly against the rules as they want for the first time, because all they’ll have to do is stop when they get the letter, and reap the benefits in the meantime. More punitive actions against unethical marketers or illegal ads will provide an incentive for business owners and marketers to ensure compliance before they start a campaign.

“Now they are saying, ‘We have given guidance. You are all on notice,’” said Allison Fitzpatrick a advertising attorney in an interview with Marketing Land. “So you are not going to get a warning letter. You are going to get an action.

Here are a few points that marketers should keep in mind:

These recent events make it clear that business owner and marketers need to take a close look at their actions to make sure they are ethical. There are a lot of guides from trade associations that are good places to look for specific issues. One simple test that business owners can use is to ask: How would I explain my actions if I were interviewed by the media about them?” If your actions would damage your reputation if they became public knowledge, then it’s time to change course.

Remember, being fined by the FTC is the least of a business or marketer’s worries. A one-time fine is nothing compared to a continual loss in business due to a damaged reputation.

Social media isn’t the only place where the FTC is cracking down on unethical marketing. Read this article about recent comments the FTC made about content publishers displaying native ads on their site.

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