OFT shines a light on paid-for Twitter posts

The practice of paying for a celebrity to endorse your product or service via microblogging service Twitter has come under the spotlight with the news that the Office of Fair Trading is launching an investigation.

The OFT's investigation into Handpicked Media, a commercial blogging outfit, brought with it an announcement from the watchdog group that the failure to disclose that payment has taken place in exchange for an endorsement breaks fair trading rules: "This includes comments about services and products on blogs and microblogs such as Twitter."

The Guardian, which was the first to spot the OFT's announcement on Sunday, claims that celebrities can earn a surprising amount of cash for a simple 140-character endorsement of a company's products - up to £1,900 per tweet in the case of rapper Snoop Dogg, who boasts 2,434,138 followers on the service at the time of writing.

Under US law, such messages of endorsement must include 'AD' or 'SPON' - to indicate an advertisement or sponsorship respectively - but at the present time there is no such equivalent in UK trading law.

With social networking experts proclaiming Twitter, with its vast number of highly engaged users and instantaneous feedback mechanisms, as the next big thing in Internet advertising and branding, the OFT's decision in this case could have major repercussions for the industry.

Twitter's own advertising system, known as Promoted Tweets, is thought to already adhere to the Office of Fair Trading's rules by including a message at the base of each paid-for tweet stating the name of the company that is funding the posting. Third-party services however, such as that offered by social advertising specialist Ad.ly, could find themselves at risk if they don't change their methods of operation.