A rather interesting conversation and debate ensued after Nick Lincoln tweeted this at me last week: “Excellent piece from @JonCudby on the @TheFCA taking four (!) years to issue guidance on social media” with a link to the editor’s latest comment piece.
However, as the debate all took place via the telephone, no-one else got to hear it or join in (such a primitive form of communication, hey?) so here, roughly, is how it went:
“The same rules that have always applied to marketing – in terms of best practice as much as keeping it legal – should still apply to professional use of social media...The two are the same thing…” – Jon Cudby
I don’t think anyone can disagree with this principle. You should be fair and not misleading, don’t try to pull the wool over someone’s eyes when you’re looking to sell a financial product, no matter where you’re looking to do this.
Jon asks the question, “Why create special rules? Why not just expect the same standards as we already do for all activity outside of ‘social media’ without attempting to create rules specific to a medium which will look different by the time those rules can be implemented anyway?”
Here’s my thinking:
Resharing of content
Traditional marketing and social media are not the same thing. The fundamental difference is in how others can reshare, modify, engage and interact. A billboard isn’t copied, have comments added to, modified and then a duplicate billboard with this modified message erected. Nor is a printed ad, or even a banner ad online. But a social update can be – and often is – reshared, shortened, commented on or modified in some way.
For the majority of updates, this isn’t an issue, but for any update that is a financial promotion and comes under FCA regulations, then this poses a problem traditional marketing just hasn’t had to face. Getting clarity and guidance from the regulator is key for many firms who do not wish to fall foul of the regulator.
Unfortunately, the latest guidance hasn’t really managed to clarify this area of concern, you can find out more about that in Series 5 of the FCA social media guidance response.
The length of content
Another difference between traditional marketing and social media is (as Jon points out) the restrictions with character length. Both Jon and the FCA refer back to Twitter as the example of the restriction in characters, and at 140 characters it is the most limiting in that respect.
“It has been reported that, once the FCA’s required caveats are in place, a tweeter will only have 40 of the original 140 characters left with which to convey their message.” – Jon Cudby
But I’d like to see further discussion around the existing rules. The FCA says if your tweet/update can be shared with an image showing, and that image can contain all the necessary regulatory wordings – then this update is now compliant, as long as the image and update are shown together. If the image is shown as a link then the update wording itself has to be stand-alone compliant. Now there is no way you can control if the image is shown embedded in the tweet or as a link. It depends too much on the device and software is being used to view the tweet.
If this is to follow the rule of compliance not being allowed to be “a click away” then I think this should be looked at again. I understand the theory that there will be some people viewing financial promotion content on the internet who are not ‘savvy users’ and the need to click to another page to see the regulatory warnings isn’t allowed (although there is an argument that this is becoming an outdated way of thinking). However, when it comes to updates on social networking profiles, like Twitter, then I’d argue that if you’re savvy enough to actively open a social networking account and follow and connect with people, where so many of the messages you view need you to click the link to show the media attached, then you’re savvy enough to click to expand an update.
Therefore, clicking on a link that takes you away from the social update onto a new site has one rule. But clicking to expand an update within that social networking site, ie Twitter, Facebook, LinkedIn etc is no different to receiving a letter and unfolding it to read the entire content, and therefore doesn’t follow the same rule.
Which leads me on to status updates that require you to click to read more on Facebook and LinkedIn as examples. Does this become a non-compliant update if it’s a financial promotion but you can’t read the full update without clicking to read more?
As I mentioned before, to me this seems as silly as saying you need to turn a page, or unfold a letter, however, since the FCA has clearly mentioned that clicking to open an image is not compliant, where does it stand on the need to click to read more? Further clarity is required.
Intended recipients
You can send an email to its intended recipient and then add a lengthy signature saying how it’s only intended for that person etc. You can post a letter out to your intended recipients, or send a fax (do they still exist?), but if you share out on a social network (even in a private group) if this is then reshared, you have no control over who is going to see the update and anyone in the world can now read it.
This is a concern traditional marketing hasn’t had to face. However, again, I feel there is a need for a discussion with the regulator about which rules apply. It’s so easy now to take a photo of a letter with your phone, to take a screen shot of your computer and then choose to reshare these across your social networks. Is the regulator saying that any form of media used needs to take these risks into consideration, or is it only saying financial promotions that start on social media need to take these risks into consideration? And if it’s only social media, then is this right, and is this really protecting the consumer fairly, or simply restricting the use of social media by financial firms?
Restrictions imposed by the regulator
“But rather than embrace this opportunity to promote financial services, it is sad that the regulator feels a need to impose restrictions on it.” – Jon Cudby
My understanding is the regulator is placing restrictions on social media when it falls under a financial promotion, and as social media is for engagement and conversation rather than selling, it is not really restricting the use of social media at all. In fact it could be argued these restrictions will help firms to think of more interesting ways to engage on social media, rather than look for another channel to broadcast out on.
The truth is though, the industry still remains overly cautious about it’s online activity and I would very much like to see a shift in this change.
And as Jon says, “Anything that is overt marketing from a specific brand will typically link to more detailed promotions, elsewhere on the web, which will have scope for all the warnings necessary. There’s no need to clutter up an already restricted tweet.”
There’s a time and a place for everything, including social media interaction, engagement and promotion. Jon is pretty much right in what he is saying, but in practice there are subtle differences that need attention, discussion and clarity with the FCA before firms are going to be comfortable enough to start engaging fully on social media in my opinion. That and a greater adoption from C-suite around social media and its importance in business in general.
Bridget Greenwood is a director at Financial Social Media UK, a marketing agency specialising in financial services social media.
