Social media is quickly becoming the preferred method for advertisers to reach consumers. According to one study, revenue derived from advertising in the social media space is expected to exceed $6 billion by 2015. As advertising through social media continues to grow and expand, it is important for advertisers and agencies to understand the legal and regulatory requirements that apply.

Over the next several weeks, we will highlight some of the important legal issues that advertisers and agencies face when advertising through social media platforms. In this series of articles, we will examine:

  1. Controlling and monitoring social media to protect a brand
  2. The Federal Trade Commission's (FTC) March 2013 guidelines regarding effective online disclosures and the Securities and Exchange Commission's (SEC) guidance regarding the use of social media to disclose material information
  3. The Twitter and Facebook terms of use regarding advertising, promotions and data collection and use
  4. The Digital Millennium Copyright Act as it relates to social media
  5. The industry self-regulatory side of digital place-based advertising

As a starting point, it is important to remember that the same rules and regulations that govern traditional advertising apply in the social media context. This means that the advertisement must be truthful (and not misleading or deceptive), the claims made in the advertisement must be substantiated (backed by evidence), and the advertisement cannot be unfair. The FTC recently made clear that the rules as expressed in its new guidance are platform and device neutral and that it “will continue to enforce its consumer protection laws,” and “evaluate online advertising, using traditional criteria, while recognizing the challenges that may be presented by future innovations.”

In our next column, we will explore how companies can protect their brand when advertising through social media. Advertisers must ensure the proper use of their intellectual property by internal and external teams and protect against the improper use of that intellectual property by a third parties. Agencies responsible for creating and deploying social media content must also understand what they can and cannot do. Protecting the brand in the social media space is challenging and requires proactive measures. We will explain what you need to know in the next article.