Clothing retailer LOFT – an Ann Taylor brand – has come under fire by the FTC for offering gift cards as an incentive for bloggers to post about a January 2010 preview event. Bloggers who posted within 24 hours of the event were eligible to win as gift cards valued between $10 and $500.
The press surrounding the FTC action, which has consisted of mostly blog coverage, has seen mixed reactions from those familiar with the fashion industry. FTC guidelines demand that bloggers make clear to readers when they receive complimentary services or products – a guideline that does not officially exist for the magazine industry, although it is understood that journalists should not accept gifts for coverage. Although this is understood by the industry, “fashion payola” happens on a regular basis with brands offering clothing, product or services to be used in magazine spreads and often purchasing advertising space adjacent to the spread featuring their product.
Similarly, the Ann Taylor event offered a preview of their upcoming Spring 2010 line and the chance to win gift cards valued up to $500. This in itself would comply by the FTC rules however the brand proceeded to add the stipulation that bloggers must post within 24 hours to be eligible for the chance to win:
“Please note all bloggers must post coverage from our event to their blog within 24 hours in order to be eligible. Links to post must be sent to [address], along with the code on the back of your gift card distributed to you at the event. You will be notified of your gift card amount by February 2. Gift card amounts will vary from $10 to $500.”
While traditional media holds its fair share of back-scratching, this notice is not one that would be issued to print media journalists. The LA Times states: “…there’s a tacit understanding between clothing brands and fashion journalists that editorial coverage isn’t something you can buy or barter for.”
However, bloggers are a whole new ball game when it comes to brand coverage. From a PR perspective, putting on “preview” parties and other such events are a gamble. Sometimes they receive a flurry of attention and other times they’re a waste of time and resources. Ironically enough, the lack of coverage is what will save Ann Taylor from receiving a hefty fine from the FTC. In a statement released April 20th, the FTC decided to not pursue “enforcement action” against the brand due to the fact that this was the first event of its kind, the lack of actual blogger coverage and a company-wide rule that was enacted in early February forbidding any other contests of this kind.
This is certainly an interesting case study for retailers. Apparently, the FTC was not joking when they created these guidelines and brands who are attempting to gain blogger coverage, such as Ann Taylor, need to carefully consider the potential legal entanglement that may come from offering complimentary products and services with a posting requirement.