The Problem With Lindsay Lohan’s Sponsored Tweets.

The tweet led visitors to the National Inflation Association, (NIA) which looks like a non-profit group warning consumer of over-inflation. But dig deeper, and it starts ‘helping’ visitors invest in gold and silver stocks. Marketwatch.com reports that the site’s founders are actually “paid ‘investor-relations specialists,’ which means that in their primary businesses (WallStreetGrand.com for Adams, Lebed.biz for Lebed) they are paid to tout stocks.” In other words, these paid spokespeople hired Lohan to be their higher profile, celebrity spokesperson.

WHAT IS LINDSAY LOHAN’S FOLLOWING? HOW POWERFUL IS IT?

As of this posting, Lindsay Lohan has more than 2.1 million twitter followers. To an advertiser, of course, that’s a great audience. She represents a young, perhaps ‘hip’ demographic. Despite her troubles with drugs and alcohol, there are many fans that don’t care – perhaps even like her more – for her party lifestyle and ‘who cares’ attitude. Still others just like to feel connected to a celebrity.  So when Lindsay says she likes something – there’s a good chance that people are going to check it out. But can a consumer trust that what she’s touting is something she really believes in … or is even a safe transaction, for that matter?

WHAT’s LINDSAY’S REPUTATION FOR PUSHING PRODUCTS?

Lindsay Lohan seems to have established herself as a tool for just about anyone willing to pay her. Her ‘seal of approval’ seems contingent on payout.

Earlier this month she received more than $35,000 for shooting a 15 second promo/ad for an online auction site. The ad was shot with no professional audio or lighting. It was cheap, it was easy money. And she had to do it from home because she was on house arrest.

Back in December she was reportedly tweeting for a Gift Card site. She’s tweeted for diet aids and fashion websites, with paychecks reportedly ranging from 3,000 to 10,000 a tweet. Earlier tonight she tweeted about a website pushing muffin gift baskets. I’m serious!

The problem is, it’s hard to tell what is a real endorsement and what is just something she truly likes. In the case of the NIA tweet, she did put the hashtag “#AD” next to the tweet) … In the case of the others, I suspect they’re all paid endorsements – if she gets paid for SOME of her endorsement tweets, then why would she just ‘give’ others away? She just lost that company as a potential advertiser! Product spokespeople as a rule don’t endorse products unless they’re being paid for it.

HOW COMMON ARE PAID TWEETS?

They are a rapidly growing business. With the dawn of twitter and facebook have emerged corporations that will actually match regular people to appropriate advertisers. Many of them are completely on the level, following FTC guidelines. (more on that below.) You don’t have to be a celebrity to get paid to tweet. A company could pay anyone with a high number of followers – anywhere from five dollars a tweet to thousands of dollars. In the case of celebrities, these companies go to the star’s agent or management (or the celeb themselves) directly. That’s where it gets shady.

SHOULD WE CUT LINDSAY SOME SLACK?

On one hand, I think Lindsay has had her share of struggles, and I’m sure her finances aren’t what they used to be. She’s not getting any acting work right now. I sympathize in a sense that she’s trying to make a living. (Although I also believe she got herself into this mess.)

The trouble is, she is starting to develop a reputation for not being the most discriminating when it comes to her endorsements. It’s one thing to talk about muffins, clothes, subjective things… but public policy, the economy… she may be getting in over her head.

HOW DOES THIS EFFECT HER REPUTATION AS A WHOLE?

When Lindsay appeared on The Tonight Show with Jay Leno recently, she claims she needs “to work to gain back the trust of the industry.” She should be doing the same with regard to her fans.  I think people want to give her a chance to recover and ‘rise again’ so to speak – as an actress. Part of that is not trying to pull a fast one and give the impression that she’s insincere about what she says.

I think she has to be careful… she may get herself into a situation where she is truly tweeting about something she knows nothing about – something that could be offensive to some of her fans, or lead them to make bad business decisions. When she decides to get political, she’d better truly know the background on what she’s tweeting. She walks a slippery slope if she decides to tweet about things she is not educated about.

DO WE NEED TO REGULATE TWEETS?

Since 1980s it has always been a requirement to be clear when something is a paid endorsement. That policy has continued into the digital age with the dawn of the internet. This goes for not just paid income, but also a steady stream of free merchandise from a person or company you mention online. But it’s very difficult to monitor.

When we see a TV commercial, when we see a magazine ad, there’s a very clear message that the person appearing in that ad has been compensated for their appearance. On twitter, it’s a gray area. We don’t always know what’s a paid statement. (Although in this case it seemed rather obvious to many of her followers) We have to find somewhere to draw the line.  I believe that when a celebrity is endorsing a product – even on twitter – whether it’s perfume, a restaurant, anything – it should be stated clearly in that tweet that it’s a paid endorsement.

For example: what if she were to endorse a prescription drug on Twitter? (yes – it’s a stretch – but consider the regulations that accompany such commercials) When you are paid to endorse a drug, that has to be clear. Any kind of drug promotion requires the listing of side effects… and we can all say “oh that would never happen, she’d never endorse something like that, and no company would ask her to” – but if there’s anything we’ve learned in the past ten years is that we can no longer take people at face value. As sad as it is, we really have to second guess a lot of the messages coming at us and who’s behind them.

In short…

Until there is a clearer way of defining what is an ad and what is a true recommendation within social networking, celebrities are not doing themselves, nor their fans, any favors. In this case, some of Lohan’s followers called her out on what they suspected was nothing more than a tweet for cash. In some ways, this backlash brought the story into the spotlight. As far as I’m concerned, if a celebrity is going to encourage people to act on their tweets, they should be ready to be held accountable for the results.