Food, the FTC and the Risks of Social Media Promotions


Food, the FTC and the Risks of Social Media Promotions

Social media platforms offer food and other CPG companies a host of new, creative ways to engage with consumers and generate brand experiences, especially on strongly visual platforms like Pinterest, Vine, and Instagram. But a recent FTC investigation of a contest on Pinterest offers a cautionary tale regarding the necessary disclosures the FTC wants for social media contests and promotions—especially when consumer use of the brand, brand name, or images of the branded product are required for entry. Though the FTC ultimately issued a “closing letter” without further action—in part because the company under investigation changed its social media policy for contests—the details of the contest and the FTC’s responses to it provide great insights into “how to” (and how not to) use social media to conduct brand contests and promotions.

A “Pin It to Win It” World –

Pinterest has become a popular social media outlet for companies to promote their brands among the sites users who “pin” images and other media together on “boards” that show ideas for different projects and interests. Many companies have made contests and sweepstakes an important part of their Pinterest strategy and “Pin It to Win It” is now a part of Pinterest culture. Instagram and Vine—which offer different ways for consumers to share and comment on visual images— also frequently feature platform-specific promotions and contests. (So do “older” social media platforms like Facebook and Twitter, where contest entry often only requires a “like” or a “retweet”).

Originally Published on Food Manufacturing – June 2, 2014.

Please see full Publication below for more information.

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Food, the FTC and the Risks of Social Media
Promotions
Anthony Froio and Melissa Goodman
Social media platforms offer food and other CPG companies a host of new, creative
ways to engage with consumers and generate brand experiences, especially on
strongly visual platforms like Pinterest, Vine, and Instagram. But a recent FTC
investigation of a contest on Pinterest offers a cautionary tale regarding the
necessary disclosures the FTC wants for social media contests and
promotions—especially when consumer use of the brand, brand name, or images of
the branded product are required for entry. Though the FTC ultimately issued a
“closing letter” without further action—in part because the company under
investigation changed its social media policy for contests—the details of the contest
and the FTC’s responses to it provide great insights into “how to” (and how not to)
use social media to conduct brand contests and promotions.
A “Pin It to Win It” World
Pinterest has become a popular social media outlet for companies to promote their
brands among the sites users who “pin” images and other media together on
“boards” that show ideas for different projects and interests. Many companies have
made contests and sweepstakes an important part of their Pinterest strategy and
“Pin It to Win It” is now a part of Pinterest culture. Instagram and Vine—which offer
different ways for consumers to share and comment on visual images— also
frequently feature platform-specific promotions and contests. (So do “older” social
media platforms like Facebook and Twitter, where contest entry often only requires
a “like” or a “retweet”).
But—as shoe manufacturer retailer Cole Haan recently found out—this kind of
consumer interaction may run afoul of the FTC’s rules regarding endorsements.
Social Media Contests as Endorsements
Like many other companies who maintain a presence on Pinterest, Cole Haan
sponsored a contest to engage with its customers. To enter, consumers had to
create a Pinterest Board titled “Wandering Sole” using:
Five shoe images from Cole Haan’s own Wandering Sole Pinterest Board
Five images of the contestants’ “favorite places to wander”; and
The hashtag “#WanderingSole” in each “pin.”
The stated prize for the most creative entry was $1,000 shopping spree.
Page 1 of 3
Food, the FTC and the Risks of Social Media Promotions
Published on Food Manufacturing (http://www.foodmanufacturing.com)
The FTC opened an investigation of the Cole Haan Pinterest contest using its
authority under Section 5 of the FTC Act. The FTC turned to its Guides Concerning
the Use of Endorsements and Testimonials in Advertising [1], 16 CFR § 255.5 for
specific direction. § 255.5 requires disclosure of any material connection between a
marketer and an endorser when their relationship is not otherwise apparent from
the context of the communication that contains the endorsement.
The FTC said the financial incentives of the Cole Haan contest created a material
connection between Cole Haan and the contest’s entrants that other consumers
who saw the Wandering Sole pins would not reasonably expect. According to the
FTC, the #WanderingSole hashtag was not enough to adequately communicate to
other Pinterest users the financial incentives that motivated the pins. While issuing
a “closing letter” without further action, the FTC concluded that “entry into a
contest to receive a significant prize in exchange for endorsing a product through
social media constitutes a material connection” requiring adequate disclosure under
Section 5 of the FTC Act.
The FTC’s investigation of Cole Haan’s Pinterest contest and its conclusion
regarding social media contests has important consequences for food and other
CPG companies considering or using social media contests to promote their brands.
The FTC published this letter to put all companies on notice that existing guidelines
on endorsement disclosures apply to contests or promotions across social media
platforms.
Going Forward
The FTC does not want to end social media contests, but it does want to make sure
that consumers clearly understand the incentives and connections behind the
sharing of corporate content on social media sites. While the FTC has not yet
specifically outlined just what disclosures will be adequate for social media-based
contests, March 2013 updates to the FTC’s .com Disclosures Guide [2] (“.com
Guide”) provide some guidance.
The .com Guide specifically addresses adequate disclosure in space-constrained ads
on platforms like Twitter. Through specific examples, the .com Guide states that
using a hashtag #Ad or #Sponsored is adequate to let consumers know the content
is sponsored advertising.
Similarly, use of #contest, #entry or #sweepstake as a requirement for entry into
social media contests should go a long way to helping create the disclosures the
FTC demands. Accordingly, food companies that want to continue to take
advantage of the brand-building social media contests offer should build use of
these or other clear indicators of sponsorship into contest entry rules. That way,
companies can keep using social media AND meet their obligation to disclose the
financial incentives—an approach that allows everyone to keep #ContestWinning.
Anthony Froio [3] and Melissa Goodman [4] are trial attorneys at Robins, Kaplan,
Miller & Ciresi L.L.P. [5] They represent Food and Beverage companies in complex
Page 2 of 3
Food, the FTC and the Risks of Social Media Promotions
Published on Food Manufacturing (http://www.foodmanufacturing.com)
business disputes involving contracts, intellectual property, unfair competition,
trade secrets and fraud actions. aafroio@rkmc.com [6] and magoodman@rkmc.com
[7].

Source URL (retrieved on 06/02/2014 – 1:54pm):
http://www.foodmanufacturing.com/articles/2014/06/food-ftc-and-risks-social-media-
promotions
Links:
[1] http://www.ftc.gov/sites/default/files/documents/one-stops/advertisement-
endorsements/091005revisedendorsementguides.pdf
[2] http://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-staff-revises-
online-advertising-disclosure-guidelines/130312dotcomdisclosures.pdf
[3] http://www.rkmc.com/lawyers/anthony-froio
[4] http://www.rkmc.com/lawyers/melissa-goodman
[5] http://www.rkmc.com/services/food-and-beverage
[6] mailto:aafroio@rkmc.com
[7] mailto:magoodman@rkmc.com
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1 Response

  1. JohnACritic says:

    If the foolish spending on the fi1t WTC and now the second one never happened, there would be plenty of money to do the really necessary projects. Also the bridge and tunnel tolls would not have to been raised to outrageous amounts due to the PA stupid ill advised projects building office buildings which is not their mandate.

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