Federal Trade Commission (FTC)

FTC Knocks Down Fashion Brand’s Pinterest Promotion

Apr 15, 2014

The Federal Trade Commission (“FTC”) recently warned fashion brand Cole Haan that its Wandering Sole Pinterest Contest (“Contest”) violated Section 5 of the FTC Act.  Section 5 of the FTC Act requires an advertiser to clearly and conspicuously disclose a material connection between the advertiser and endorser when their relationship is not otherwise apparent.  A connection is “material” and must be disclosed where the relationship might materially affect the weight or credibility of the endorsement.  In this case, Cole Haan tripped over Section 5 by not disclosing that its contest had enticed consumers to “pin” Cole Haan shoes to their individual Pinterest boards.

In the Contest, which offered the winner a $1,000 shopping spree, Cole Haan required contestants to create Pinterest boards with the hashtag “#WanderingSole” which displayed five images of the contestants’ “favorite places to wander” and five shoe images from Cole Haan’s Wandering Sole Pinterest board.  Those who did so “entered” the contest and qualified for the chance to win a $1,000 shopping spree.

In its letter to counsel for Cole Haan, the FTC stated that, “participants’ pins featuring Cole Haan products were endorsements of the Cole Haan products, and the fact that the pins were incentivized by the opportunity to win a $1,000 shopping spree would not reasonably be expected by consumers who saw the pins.”  In other words, the hashtag “#WanderingSole” did not clearly indicate a promotion and non-contestants would believe that the pins were simply natural content.  The FTC believed that the possibility of winning a $1,000 shopping spree was incentive for contestants to pin images of Cole Haan’s shoes and, therefore, constituted an endorsement, which warranted appropriate disclosures about the material connection.

Fortunately for Cole Haan, however, the FTC decided to give them a pass and not pursue enforcement action since: (1) it had not previously addressed this issue; (2) the Contest had a short run with very few contestants; and (3) Cole Haan had quickly adopted a social media policy that adequately addressed the FTC’s concerns.   The FTC further expected that Cole Haan would “monitor social media influencers’ compliance with the obligation to disclose material connections when endorsing its products.”

Aside from the FTC violation, the Contest may have also violated Pinterest’s brand guidelines, which prohibit people from adding pins from a selection (i.e., shoe images from Cole Haan’s Wandering Sole Pinterest board).

Moving forward, advertisers should do the following to ensure that their social media promotions are FTC-approved:

  • Be transparent and apply clear and conspicuous disclosures in all advertisements across all social media platforms (i.e., use obvious hashtags such as #contest, #sweepstakes, #promotion, #entry, etc.); and
  • Advise endorsers (or, as in this case, contestants) to clearly and conspicuously disclose the fact that a material connection exists – meaning that they have received some compensation or incentive (i.e., the opportunity to win a prize) in exchange for promoting the brand or materials associated with the brand.

Lastly, advertisers should ensure that their promotions comply with Federal and State laws as well as the applicable social media platform’s guidelines or terms of use.