The Office of Fair Trading has warned companies that sponsor Twitter messages and blog posts that they must disclose their intentions as online marketing promotions or face possible fines and censure.
The watchdog took its first action this week, after finding that a London-based online advertising firm broke the OFT rules on disclosure. The 18-month old firm Handpicked Media was the target of the regulator’s wrath yesterday, but the incident raised questions as to whether it is now set to go after other online marketing companies that are just beginning to explore the potential of social networking sites such as Facebook and Twitter.
Although the OFT has not revealed whether it now plans to make online marketing companies apply the rules governing disclosure for newspapers and magazines to the Internet, its decision will nevertheless be seen as a precedent giving more power to the elbow of the Advertising Standards Authority, which will take over internet regulatory duties in March next year.
In a statement, the OFT said: “The OFT has received undertakings from Handpicked Media, an operator of a commercial blogging network, requiring them to clearly identify when promotional comments have been paid for.
“In taking this enforcement action the OFT has confirmed its view that online advertising and marketing practices that do not disclose they include paid-for promotions are deceptive under fair trading laws. This includes comments about services and products on website blogs and microblogs such as Twitter.”
The world of online advertising will surely now be watching developments with interest.