The Federal Trade Commission recently issued a closing letter to high-end shoe retailer Cole Haan that has implications for broadcasters conducting contests on social media platforms like Twitter and Pinterest.  The letter concerned a contest, called “WanderingSole,” that Cole Haan promoted on Pinterest.  The contest asked people to create Pinterest boards using images of Cole Haan shoes along with pictures of their “favorite places to wonder.”  The contest’s rules required contestants to use the hashtag “#WanderingSole” with their photos.  The contestant with the most creative entry would win a $1,000 shopping spree.

The problem?  Cole Haan didn’t require contestants to disclose that their #WanderingSole boards were really contest entries.  The FTC viewed the boards as an endorsement of Cole Haan’s products motivated by a “material connection,” i.e., the chance “to receive a significant prize.”   When a material connection that “would not reasonably be expected by viewers of the endorsement” exists between a marketer and an endorser, Section 5 of the Federal Trade Commission Act requires that the connection be disclosed.  Although Cole Haan had required contestants to use the #WanderingSole hashtag, the FTC found that it ineffectively communicated the financial incentive between Cole Haan and the contestant.

The lesson for broadcasters?  If your contest requires contestants to endorse your station or an advertiser’s product, and the fact that that endorsement was motivated by a chance to win a prize is not clear from the context, your official rules should require contestants identify their pins, posts, or tweets as contest entries.  This could be accomplished in a variety of ways, including hashtags such as #contest or #contestentry.  

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