News organizations sign deals for sponsored tweets, then do not participate in them

Late last year, there was an unusual amount of buzz among prominent Twitter users about a relatively minor development in the Web services industry – the redesign of AOL’s home page.

“I can tell AOL listened to what I told them about all that clutter. Way better browsing experience,” tweeted comedian Michael Ian Black. “Loved the pics and vids,” gushed reality-TV icon Kim Kardashian. Even sports and business entrepreneur Mark Cuban joined in. “Stumbled on newaol looks like they made some changes to their site,” Cuban wrote.

The adoring tweets — from more than a dozen well-followed Twitterers — were not spontaneous. AOL, Inc. paid for the praise. It’s among a growing number of companies that now promote products by sponsoring the tweets of actors, athletes, TV stars, and — in a few cases — journalists. Endorsers typically collect several hundred dollars for each sponsored tweet. Very popular celebrities such as Kardashian can earn as much as $10,000.

“It’s a financial transaction for me and a business dealing,” said Black, a stand-up comic who’s starred in several TV sitcoms and sketch-comedy shows. In the past year, he’s tweeted 10 or so paid ads for such companies as Sony Pictures, Groupon, and the software maker Symantec.

“I wouldn’t send out a sponsored tweet for something I objected to,” Black said in a phone interview. “If the government of Sudan wanted me to do a sponsored tweet, chances are I would say ‘No, thank you.’ But if it’s an Adam Sandler movie or a product I have no problem with, then I’m happy to do it.”

But as advertising creeps more deeply onto social media sites, it presents new challenges. Observers question whether the financial relationships are adequately disclosed and whether they interfere with the intimate and personal connection that social media users often feel among each other.

“We all need to make a little bit more money, but the Twitter community has always been based on real, legitimate conversation and legitimate relationships,” said University of Missouri journalism professor Jennifer Reeves, who studies new media. “Culturally speaking, people who are following Twitter might not expect to see ads.”

Most ads come from stars, not news organizations

Black’s sponsored tweets were arranged through a company called Ad.ly, a Beverly Hills firm that matches potential advertisers with well-followed Twitterers. In the 18 months it’s been in business, Ad.ly has persuaded rapper Snoop Dogg to endorse Toyota, NBA star Paul Pierce to tweet about Sony computers, and ESPN baseball blogger Keith Law to tell his followers about AT&T wireless phones. (Law wrote on his blog that he donated to charity the $244.53 he earned.)

“You have 50 billion dollars a year spent globally on endorsements,” said Ad.ly CEO Arnie Gullov-Singh. “It just hasn’t moved online yet, and that’s what we’re changing.”

Last year, Ad.ly placed more than 20,000 sponsored tweets. In addition to its stable of celebrities, Ad.ly has signed deals to insert ads into the Twitter streams of several news organizations, including Time magazine, the Austin American-Statesman and TechCrunch.

But Gullov-Singh said Ad.ly advertisers have largely forsaken the journalistic organizations in favor of popular actors, athletes, and reality TV stars.

Time Inc. and The American-Statesman both say they’ve yet to participate in a single Ad.ly campaign, while TechCrunch conducted just one foray into Twitter advertising for “research purposes” and to spark an online discussion with its readers. (TechCrunch, whose writers often bemoan the over-commercialization of the Web, also donated its ad proceeds to charity.)

“In social media, people are publishers, and consumers are following people,” Gullov-Singh said, noting that many traditional news organizations do little with their Twitter feeds except post links to articles. “If you want (Twitter users) to follow your brand and engage with your brand and monetize your brand in social media, you need to have a real person behind that.”

Indeed, Ad.ly tries to assure that each sponsored tweet has a personal feel and mimics the grammar and vocabulary of the tweeter. SnoopDog’s ad for a Toyota minivan declared, “These homies know the deal,” while model and actress Jenny McCarthy recommended Arby’s roast beef sandwiches to ladies “who might be PMSing like I am.”

“When you see celebrity endorsements on TV, they’re clearly ads,” Gullov-Singh said. “Online, these celebrities, musicians, actors, athletes are all being themselves and being authentic.”

Gullov-Singh said the “art of a well-produced endorsement” involves maintaining that authenticity while providing enough disclosure to satisfy legal and ethical concerns. The Federal Trade Commission requires sponsored online content to be labeled as such. Typically, each Ad.ly tweet concludes with the word “ad” or an #ad hashtag.

But that labeling convention is so new that it’s not clear whether followers understand the tweeter is getting paid.

“It all boils down to the question of how easily readers, users, consumers, and citizens can recognize the distinction between advertising content and editorial content, said Katy Culver, a University of Wisconsin professor of multimedia journalism and adjunct Poynter faculty. “I’d be very curious how many people recognize that hashtag.”

A return on investment, but an insult to “purists”

Ad.ly is one of several companies trying to commoditize Twitter feeds. Other young firms — such as Twtmob and Izea — also give ordinary people an opportunity to send ads to their friends and followers. And Twitter itself now allows advertisers to pay for “promoted tweets” that appear at the top of users’ screens.

But the trend is not without potential peril. Reeves says Twitter users are accustomed to an ad-free medium, and if it becomes too commercial, there could be a “huge revolt.”

And at least one celebrity who worked with Ad.ly later backed away from sponsored tweets. Dr. Drew Pinsky — a psychologist and television talk show host — tweeted one ad in 2009. But Pinsky, whose public persona straddles the line between entertainer and information provider, declined to do it again.

“In my experience the Twitter public has not reacted well to any sponsored tweet or anything that smacks of advertising,” Pinsky’s spokeswoman, Valerie Allen, said by e-mail. “I think they are purists who want to keep all advertising out of social media, period.”

Black — the comedian — said he also heard a few complaints when he decided to send out sponsored tweets, though he stressed that the number of negative comments was small and mostly came from young people “who don’t have the financial demands on them that grownups do.”

“As of today, I’ve written 2,655 tweets,” Black said in a blog post last year defending his decision. “That’s a lot of free material, all of it contributing to the entertainment of the 1.5 million people who follow me, as well as the multi-billion dollar capitalization of Twitter itself. When presented with an opportunity to get some return on my investment of time and energy, why not take it?”

CORRECTION: This post originally stated the wrong location for Ad.ly, which is based in Beverly Hills.

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  • http://twitter.com/Rwagner731 Ruth Wagner

    Good article.

    The FTC has made it pretty clear that disclosures need to be concise, transparent and easy to identify. Advertisers need to keep accurate records on all social media out reach and blogger/endorser initatives.  Hard to do in a medium that is viral in seconds & disclosures need to fit in 140 characters or less.  All you have to do is look at the 50 Cent twitter debacle to know the impact of lack of disclosure and the legal implications surrounding that issue.

    Guidelines are to insure that brands and individuals engaged in social media are fully transparent in terms of their relationships, and are responsible for the accuracy of what they say.

    At CMP.LY we’ve set the industry standard for social media compliance and disclosure. CMP.LY disclosure tools provide companies and individuals with a simple means of ensuring regulatory compliance in all social media outlets.

    Thanks, and of course, my disclosure:

    http://www.cmp.ly/4/gropz5

    Ruth
    CMP.LY

  • http://twitter.com/LeonardJohnson4 Len Johnson

    Based on the comments from Krista at Ad.ly, it seems that there is a fair amount of transparency with their promoted tweets.

  • http://www.OpenCalais.com kristathomas

    It bears noting that Twitter is a follow/follower model, and therefore following someone who tweets an endorsement once a week or so is entirely opt-in. Not a choice one has in many other media… or any?

    As noted, all Ad.ly endorsements are disclosed either via #Ad, (Ad), #Spon or in the copy (“I am working with brand XYZ to endorse product ABC…”) See some samples here. Pretty clear and conspicuous. http://ad.ly/category/blog/

    Best,

    -Krista
    The Ad.ly Team