Monday, June 10, 2013

A Closer Look at Celebrity Endorsements

When Academy Award-winning actor Robin Williams spoofed the Kars For Kids jingle the car donation charity was just as surprised as the next guy. Of course, the nonprofit was thrilled to receive this kind of unsolicited, not to mention scot free advertising for its good work. Alas, that kind of thing—that is, unsolicited celebrity endorsements—don’t happen naturally all that often. At least not these days.

In fact, the newest trend in celebrity endorsements is to contrive to get a celebrity or anyone really, as long as that person has a large following on social media, to casually drop a mention of a product or company in a post. When it’s done carefully, the consumer is no wiser and may be left thinking, “Hey, if So-and-So prefers Crest to Colgate, why should I be a shnook?”

There’s just no way to know if this form of advertising is paid for or unsolicited. You could ask, but with hundreds or thousands of fans following an account, who knows if you’ll get an answer. Especially if the endorsement is meant to be hush-hush.

By The Way

Here’s how it works: last week, pop star Miley Cyrus was on a promotional tour for her new album when she wakes up one morning and tweets, “Thanks @blackjet for the flight to Silicon Valley!” On inquiry, BlackJet CEO Dean Rotchin admitted, “She was given some consideration for her tweet.” Cyrus didn’t clarify in what way or to what extent she was favored by the private jet travel service in exchange for her tweet to her 12 million Twitter followers. But the federal government is beginning to sit up and take note of these “incidental” endorsements.

Sometimes, endorsements are the result of a PR Agency, or a club owner like Mark Birnbaum or maybe an entrepreneur like David Milberg 

Working Assumptions

The Federal Trade Commission’s Mary K. Engle, who serves as associate director for the FTC’s advertising practices division had this to say, “In a traditional ad with a celebrity, everyone assumes that they are being paid. When it’s not obvious that it is an ad, people should disclose that they are being paid.”

It seems that according to guidelines set forth by the FTC, companies and those celebrities they pay in exchange for endorsements must make it clear that these are paid advertisements. The issue of deceptive advertising is very serious. Companies may be breaking federal laws known as “Dot Com Disclosures” requiring sponsors to disclose their arrangements with celebrities, even on social media networking sites like Twitter. Violators may be penalized with fines or merely warned, and that’s where it all goes murky. The penalties just aren’t well-defined.

And maybe that’s the reason Cyrus and BlackJet will get away with that little arrangement after all.

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