Knowing the tortore we have gone through and still go through with compliance departments when developing both on and off line camapiagns for clients this has not really come as a surprise.

The Financial Services Authority (FSA) has said that banks and financial services companies must comply with advertising rules when using Facebook and social media such as iPhone apps.

 The FSA issued the warning after conducting a study examining how financial serices companies communicate with consumers which found some use of social media channels lacked compliance with industry rues.

Companies posted Twitter updates or commented on discussion forum threads without the proper disclaimers and risk warnings, the FSA says, and engaged in promotional behaviour without complying with all the FSA’s rules.  The FSA studied 30 Twitter and Facebook pages and followed companies’ behaviour on financial forums.”Throughout the review we identified good and poor practice among firms who had adopted the use of new media to communicate financial promotions,” an FSA statement says. “Some promotions lacked risk warnings. Other promotions, while not very specific about products or services, nevertheless went beyond the definition of ’image advertising’.”

The watchdog warned companies that all their communications will come under scrutiny.

“Firms may not have considered these factors to meet the definition of a financial promotion and therefore have not applied the relevant communication rule,” the regulator says. “Our rules cover all communications by regulated firms to clients, not just promotional ones. The rules for non-promotional communications are fairly high-level – the main rule is that communications must be fair, clear and not misleading.”

The regulator also questions whether Twitter is an appropriate medium for financial firms to comminucate on at all. “It is important to consider whether a channel is a suitable method for the type of communication. For example, Twitter limits the number of characters that can be used, which may be insufficient to provide balanced and sufficient information,”

“It is important to consider whether the risk information could be displayed prominently and clearly using this media channel,” said the FSA. “Promotions and communications made using new media must meet the requirements for stand-alone compliance.”

The popular social networking website accounted for 14.5% of all UK Internet page views during September 2009, equivalent to 1 in every 7.

During September Facebook was the second most visited website in the UK after Google UK but because users view a much larger number of pages per visit, Facebook is the clear leader in terms of page views, receiving more page views than Google UK, eBay UK and YouTube combined. With UK Internet visits to Facebook increasing by 86.1% between September 2008 and September 2009. 

Although it has fallen somewhat off the media radar in favour of Twitter recently, Facebook remains far and away the most popular social networking website in the UK, accounting for almost half (49.2%) of all UK internet visits to a social networking website. The web monitoring company Hitwise showed that its average visit time increased from 19 minutes 59 seconds in September 2008 to 26 minutes 14 seconds during September 2009.

Coupled with the targeting opportunities available through their advertising platform, brand and product pages and linking with client websites and microsites, the joined up thinking that was missing is now here. With some brand groups attracting in excess of half a million followers it offers brands unprecedented access to their core advocates.

Introducing further features such as Facebook applications further allows brands to virally spread their messages. If you’d like to talk through the opportunities Social Networking could offer your brand, please feel free to email steve@pcdagency.com

Steve