Twitter Changing the Business of Celebrity Endorsements

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For the record, Ferrell isn't on Twitter, says his spokesman, Matt Labov, who adds that the Twitter handles sporting his name are "imposters."

For her part, Lohan on her own time tweets about topics like fulfilling her community service sentence. But she has also posted comments for Izea on a few occasions, the company says. Her tweets about wind energy ("While saving the world ... save money! I love it!") and about a gold mining company ("R ur savings safe? Think again!") were paid endorsements, according to Izea's website.

Those posts, along with the CampusLIVE tweet, included the characters "(hash)ad" at the end, which indicates that a post is a paid endorsement. But Lohan's publicist, Steve Honig, says that Lohan does not "sell" her tweets: "She uses Twitter to communicate with her fans and let them know what she's up to."

Like any endorsement, celeb tweets come with the risk that a star's behavior will not coincide with the company's image. And of course, there's a science to picking the right one: Will consumers buy that their favorite rapper drives a minivan?

Twitter generally allows the paid tweets, as long as they're posted manually and not automated by a computer program. The Federal Trade Commission suggests endorsers end their tweets with the (hash) symbol, called a hash tag, and the letters "ad" or "spon," short for "sponsored by," to clarify that they're ads.

"The more transparent you are with your audience on Twitter, the more powerful that connection is," said Rachael Horwitz, a company spokeswoman.

Ed Aranda, a 27-year-old graphic designer and copy writer in Erie, Pa., doesn't like celebs mining their fans' trust to sell a product. Still, he thinks those reading the tweets should take responsibility.

"If you can't tell snake oil when it's being sold to you," Aranda said, "then you probably deserve what you're buying."

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