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Hosts and sponsors of ‘Twitter parties’ must be aware of legal risks

September 19, 2014

By JayKelly

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It has been at least a couple years since all brands and marketers realized they needed to have a Twitter presence, if they did not have one already. But simply being on Twitter is not enough. Engaging customers, and continually finding new ways to engage them is a must to stay competitive. Accordingly, many are turning to “Twitter parties.”

According to a 2011 post from Outspoken Media, a Twitter party is “an online event sponsored by your brand that you can use to meet your customers, announce a service, launch a product, or simply get people talking. You pick the time, the hashtag, and people [to] bring into the conversation. Brands love them because they’re cheap, easy to put together and they have the potential to generate hundreds (if not thousands) of tweets about your brand in just a couple of hours.”

Essentially, Twitter parties involve engaging consumers and building brand awareness by organizing a time period in which Twitter users partake in a group chat or dialogue of sorts with the host by submitting tweets using a predetermined hashtag. Norelco, Campbell’s Chunky Soup, Boar’s Head and the American Heart Association are among the prominent brands that have hosted Twitter Parties.

Twitter parties are not exactly new – apparently dating back to 2008, though becoming more popular within the last few years, particularly among moms and “mom bloggers.” Yet, most people are not familiar with Twitter parties, and are probably more familiar with the related “Tweetup,” which often involves an in-person gathering of Twitter followers (such as at a baseball game, or a store opening such as the one that got Nordstrom Rack in hot water with the FTC).

Due to the nature of Twitter parties, which usually feature the dissemination of tweets about brands and products, there is the potential for brands to directly or indirectly violate the FTC rules. Twitter parties often involve contests or giveaways, meaning there is the likelihood the attendees will tweet positive things about the host and free products received, without the mandated disclosures of material connections.

The FTC has long required advertisers and endorsers to disclose these material connections (financial relationships, essentially) and, in 2009, the FTC extended its published regulations to encompass online activity. Twitter party hosts tend to be highly followed/highly influential Twitter users, meaning any endorsements have the potential to reach large numbers of people.

In short, the rule of thumb for brands giving away free products or otherwise getting free publicity is: disclose, disclose, disclose. If you provide someone with money or free products as compensation for hosting a Twitter party, it is essential that he or she discloses that fact.

For example, September 16, 2014 was apparently “National Play-Doh Day.” At 3:00 p.m., Hasbro sponsored a Twitter party, featuring a chat about toys and prize giveaways. Just minutes into the Twitter Party, host @MomSpark wisely tweeted the following: “DISCLOSURE: I received compensation for hosting this Twitter party. #PlayDohDay”

That tweet could not disclose @MomSpark’s compensation any more clearly, and should satisfy the FTC’s standards. By now, most brands sponsoring Twitter Parties should be familiar with the FTC’s rules and presumably would require a host to make a similar statement.

The more likely scenario, however, is that an attendee of a Twitter party wins a contest or receives free stuff, he or she tweets glowing endorsements about the product and/or brand, but does not make mention that they were essentially compensated for that endorsement.

While it is debatable how far the FTC would go to punish a brand for a consumer’s nondisclosure of what could be seen as a paid endorsement (if anything, a reprimand by letter is most likely), a brand does not want to take that risk for bad PR or a fine.

Related, since many Twitter Parties sponsored by well-known brands do involve prizes and giveaways, the sponsoring entity should be sure to post the associated rules (which typically should involve hiring an attorney who specializes in this area). Examples of this include Twitter Party rules for the Acura #RDXContest, Albertsons #PerfectPicnic sweepstakes and the Procter & Gamble “#YaProbasteEsto Twitter Party.”

Although Twitter, Twitter parties, and social media contests are still relatively new (translation: they are not highly regulated/many regulations are not widely enforced), anyone sponsoring Twitter parties should be aware of the legal risks and act accordingly.

      

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