The contest called for people to create Pinterest boards with images of five Cole Haan shoes. Whoever posted the most creative entry would receive up a $1,000 shopping spree. Cole Haan told users to use the hashtag '#Wandering Sole' with their photos, but didn't instruct people to make it clear that they posted the pins to enter a contest, according to the FTC.
“We do not believe that the "#WanderingSole" hashtag adequately communicated the financial incentive -- a material connection -- between contestants and Cole Haan,” Mary Engle, FTC associate director for advertising practices, said in a letter sent to the retailer's attorneys on March 20. (Santa Clara University law professor Eric Goldman called attention to the FTC's letter this weekend.)
Engle adds that marketers must disclose any “material” connections between themselves and endorsers, unless the relationship is apparent. “Under the circumstances set out above, entry into a contest to receive a significant prize in exchange for endorsing a product through social media constitutes a material connection that would not reasonably be expected by viewers of the endorsement,” she writes.
The FTC isn't bringing charges against Cole Haan, and says that its investigation doesn't signal that a violation occurred. But the overall tenor of the FTC's letter is clear: The agency believes that the company should have done a better job of communicating that the Pinterest users who participated might have been motivated by the chance to win free merchandise.
That position could take at least some marketers by surprise. “The FTC is taking an expansive view of what constitutes an endorsement,” says Terry Seligman, an advertising lawyer with Frankfurt Kurnit Klein & Selz. But, she adds, the fix is simple: A hastag that included a word like “sweeps,” or “contest,” or “giveaway,” would have satisfied the FTC's concerns, she says.
Georgetown Law professor Rebecca Tushnet adds that the FTC's stance marks a logical continuation of its statements about other social media platforms. “When an advertiser offers benefits to people who usually use a social media service for noncommercial speech/activities, those people should disclose when they're receiving something of value in return for promoting the advertiser's message, and the advertiser is responsible for telling them that/enforcing that,” she says in an email to MediaPost.
She adds that the FTC is trying to make the point that Web users should be able to tell the difference between “grass roots and astroturf.”
Santa Clara's Goldman agrees that the FTC is trying to take aim at what it views as “inauthentic content” online. “The FTC has made it clear that if there's any consideration, no matter how remote, for posting something online, it's an ad,” he says. But, he adds, offering people the chance to win a prize -- as opposed to paying them with cash or gifts -- seems like an exceptionally remote form of compensation.