Posts Tagged ‘FTC’

FTC Crashes Ann Taylor’s Party

Monday, May 3rd, 2010

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.

Links of the Week: April 30th Edition

Friday, April 30th, 2010

Two-Thumbs Down to 3-D

Famed movie critic Roger Ebert is not jumping on the 3-D bandwagon. In a Newsweek article published this week, Ebert explains why movie theaters should not overuse the technology and make it “a way of live” for moviegoers.

Hugo Chavez Twitter’s Newest Political Figure

Venezuelan President Hugo Chavez is officially a Twitter user as of Tuesday. The anti-US critic will be using the microblogging site as a way to send messages to his followers. He’s also reportedly encouraged Bolivian President Evo Morales and controversial Cuban political leader Fidel Castro to also join the site.

NYS Senator Charles Schumer not a Fan of Facebook

New York State Senator Charles Schumer is not a fan of Facebook’s new personalization of their site. He’s written a letter to the FTC asking that they create stringent guidelines for Facebook and other social networking sites.

Apple Releases “Thoughts on Flash”

Apple’s Steve Jobs has released a statement titled “Thoughts on Flash” in which he explains that due to Adobe’s lack of “reliability, security and performance” the iPhone and iPad will not support the Adobe Suite.

LOTD: 11/24/09

Tuesday, November 24th, 2009

News from DialogueMedia

Website, Facebook, Twitter and How to Use Them

Guy Kawasaki interviews Dan Zarrella on how to use social media.  Key insights for companies include: when to implement a Facebook presence, the difference between a retweet and a Digg, and so on.

What are Company Obligations Under FTC Endorsement Guidelines

This article specifically addresses the issues at play for a company, its employees and any affiliated organizations under the new FTC endorsement guidelines.  Documentation of steps taken to comply with the guidelines is key to any future enforcement action.

The Evolution of Social Media Marketing to Social Business Design

David Armano and Jeff Dachis talk about social media marketing’s evolution in becoming integrated into all aspects of a business.  This is the creation of a social business model.  They provide early examples in the accompanying slide presentation but also some of the challenges they also pose.  This is as much a change to the approach to social media as it is to the way a business is organized.

Socialnomic’s Social Media ROI Video

Here’s a great video by Socialnomics on Social Media ROI that features one of our clients, Volkswagen, which with the help of MWW Group, launched its GTI exclusively through an iPhone/iPod Touch app.

Check it out:

LOTD: 10/16/2009

Friday, October 16th, 2009

Happy Friday everyone!  There are only 15 days until Halloween or more importantly only 68 shopping days until Christmas.  Until then, enjoy these links of the day.

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FTC Guidelines: Implications for Marketers

Wednesday, October 7th, 2009

We’ve seen lots of coverage in the past few days around the new FTC guidelines around endorsements, specifically about the impact this will have on blogger and “influencer” relations when it comes to social media and WOM marketing.  The guidelines address a range of potential endorsers, besides bloggers, including:

  • Network Marketers”: the guidelines state that “participants in network marketing programs are also likely to be deemed to have material connection that warrant disclosure.”  So if you are a BuzzAgent or a brand working with a similar program, disclosure and liability guidelines apply as they do to bloggers.
  • Celebrities are considered liable for comments they make in advertisements – but importantly for PR people – also for what they say in editorial content.  So celebrities being paid to talk about a product on a talk show, will be required to disclose their relationship with the brand.
  • Employees: disclosure is required when employees of a company comment publicly about a product or service (the Guidelines use the example of a message board post).  What was previously best practices, seems now to be a requirement, making employee policies and guidelines even more important.

At the end of the day, the guidelines require that endorsers 1) disclose their relationship with marketers and advertisers, and 2) are accountable for the truth and accuracy of their comments.  This presents some basic considerations for us as marketers.  Although disclosure about compensation is certainly not a new issue in the marketing world, there is now an added (financial) incentive to ensure that this is done consistently and ethically.  The basics:

  • Proactive Disclosure: Individuals who receive compensation (money/free product) in exchange for talking about personal experiences need to clearly and consistently disclose their relationship with the marketer (on the web, this should be done each time a new reference is made).  It also means that as a marketer, we are responsible for setting up disclosure expectations for the programs we run – including include the proper way to disclose within the context of a blog as well as in 140 characters, or as part of a YouTube video.
  • Guidelines and Recommendations: Especially with network marketing programs, when “endorsers” don’t necessarily consider themselves marketers, setting up recommended disclosure language and the parameters for reviews and endorsements will be important  (i.e. stick to your personal experiences rather than making broad-generalizations about a product, be honest, etc.).  In the same way, guidelines for employees who are talking about their companies’ products or services will be important too.
  • Monitoring: Part of the guidelines states that “if the advertiser initiated the process that led to these endorsements being made … it potentially is liable for misleading statements made by those consumers.” With that in mind, it is not enough to simply disseminate free product and close your ears (not that this is advisable anyway).  Brands will be responsible for tracking mentions and reviews by these influencers and potentially reaching out to correct or clarify mis-information.

All in all, these are best practices brands should be following anyway – and these guidelines are a step in the right direction.  We’re following along as brands and marketers adopt these new guidelines, and will be tracking new developments as they come.