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2017 Newsletter

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The perfect ad

An advertising campaign where you control not only the content and timing of the ads, but where you don’t have to pay high-priced celebrities (who consumers know are paid to say nice things about your product)…where you can leverage consumer confidence in the opinions of bloggers and others who are popular “influencers” to sell your product…without the consumers even knowing that the ads are, well – ads.

If this scenario sounds too good to be true, it is.  Just ask Lord & Taylor, which signed a consent order with the Federal Trade Commission (“FTC”).  According  to the FTC’s complaint against Lord & Taylor, the company paid 50 online fashion “influencers” to post pictures of themselves on social media wearing a dress from Lord & Taylor’s new collection without disclosing that they had given each influencer the dress – and thousands of dollars – in exchange for the endorsement. In addition, the FTC alleged that Lord & Taylor deceived consumers by placing a seemingly objective “news” article in the online publication Nylon and creating a Nylon social media post, without disclosing that the articles actually were paid advertisements for the company’s new clothing collection.

You have to say it’s an ad
When the FTC filed its complaint against Lord & Taylor, alleging that the fashion retailer

had misrepresented that “fashion influencers” (bloggers) were impartial and objective and had made independent judgments about a fashion line, many brand owners may have shuddered knowing that an ax might fall on other companies.

Sure enough, earlier this year the FTC sent letters to 90 marketers and “influencers” – individuals or entities which had endorsed products or services – clarifying what the FTC Endorsement Guides require. In this “crackdown,” the FTC directed letters to marketers and to endorsers/influencers themselves – many of them celebrities.

The FTC explained a few things:
If there is a “material connection” between an endorser and the marketer of a product – that is, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement.

Material connections can be a business or family relationship, monetary payment, or providing free products to the endorser.

The Endorsement Guides apply to marketers and endorsers. 

Social Media... Unfriendly Result

FTC Spoils the Hype!