FTC Endorsement Guidelines Archives

Influencer Marketing was major trend noted at the 39th ANA/BAA Marketing Law Conference –

I attended the 39th Annual Marketing Law Conference hosted by the ANA/BAA that took place right before the Thanksgiving Holiday . The ANA (Association of National Advertisers) acquired the BAA (Brand Activation Association) back in 2014 and they have continued to host this annual event. I’ve been attending this event now for over 10 years and have met some of the new team members, but many of the presenting sponsors have remained the same and the content has always been very informative.

They had another great year in attendance with over 750 professionals ranging from leading regulators, legislators, corporate counsel, marketers and technology innovators who gathered again at the Marriott Hotel on Michigan Ave. This year’s conference was titled “BREAK THROUGH: Legal Strategies for Dynamic Businesses”.

I arrived in Chicago the afternoon of the first day of the conference, so I missed the morning sessions. One that they hold each year is the Basics of Promotion, Sweepstakes and Contests, so I usually don’t mind skipping that. I was able to make the afternoon session on “The Latest Hot Button Issues in Real-Time Marketing and Social Media”. This was a panel session that included legal Counsel from Coca-Cola, Intel, MasterCard with the moderator from the firm Davis & Gilbert. They reviewed some of the key issues that can arise when your social media team wants to post something online in real-time. The now famous Oreo cookie tweet that was posted when the lights went out in the New Orleans Super Dome during the Ravens v. 49ers Super Bowl game was brought up as a successful example. But several others noted have not been.

One of the highlights of the conference each year comes from Linda Goldstein, a Partner and Head of the Advertising, Marketing and Media practice at BalkerHostetler in New York who delivered her annual industry review on the morning of Day 2. Linda’s presentation focused on Sweepstakes, Contests, Privacy, Digital and Social Media. She opened up stating that “mobile now has become the glue to our digital world” and she associated the phone to an adult pacifier. Linda stated that there are now 4.1 billion users of mobile messaging apps and that by 2020 there will be 10x’s the number of devices as there are people in the world.

Influencer marketing was the term that we heard the most about at this year’s conference and Linda stated that 2018 will be the year of the micro-influencer. These are some of the same people that started out blogging and posting videos on YouTube. They have now become more important to brands then celebrities and the FTC has been closely watching this trend. The FTC sent 90 influencer warning letters this past April after reviewing numerous Instagram posts by celebrities, athletes, and other influencers, in response to complaints by consumer watchdog groups. These letters were to remind influencers and marketers that influencers should clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media. The FTC provided further endorsement guidelines on how to do this. As this relates to sweepstakes and contests, we have been informing our clients to always include in their hashtag the word sweepstakes or contest as part of the promotional hashtag or as a second hashtag that should be used in all tweets that gain a participant an entry in order to stay compliant with these FTC guidelines.

Linda entertained us through her presentation with video clips that showcased how a brand might soon be able to change their marketing in real time. She showed a male who was making an in-store purchasing decision on perfume for his girlfriend’s birthday present. His girlfriend bought her favorite perfume before and he was trying to figure out the right brand. These marketers where able to make changes to the packaging in store in order to help him remember and persuaded his purchase.

She also reviewed again this year how we need to be careful with sweepstakes and contests that ask the participant to post a photo. The Oreo Dunk Sweepstakes asked participants to take a photo or video with their favorite Oreo. That is very hard to do in a store without purchase, so they included an AMOE. Contests must involve a a genuine level of skill and include objective criteria with qualified judges that can apply that criteria. Beware of public judging, using votes, and take steps to preserve the skill level. It is recommended to limit impact of pubic judging which also minimizes risk of brand embarrassment. You want to avoid a popularity contest, so put rules in place and don’t incentivize extra votes.

As far as consideration in mobile promotions, data charges may apply if having to use only a mobile app. Each entry that is made via a mobile device will result in a message or data charge or debit to the user’s account. While there is some debate as to whether standard text message data charges “should” be deemed to constitute consideration, the prudent approach is to treat these charges as consideration and provide an AMOE. You should also always disclose that text messaging charges may apply. Again there still has not been any lawsuits in text-to-win sweepstakes that don’t include the AMOE, but it’s a risk that your company may not want to take.

On the morning of Day 3 we were treated to another highly entertaining presentation from Ron Urbach, Chairman/Davis & Gilbert LLP, which was titled “Transformation Sweeping Advertising and Marketing: Key Trends and Legal Developments”. Ron not only discussed what some of these trends are, but also how lawyers are responding to keep up with them and the demands of their clients. He brought up the term “Fake News” which he referred to as the “dark underbelly of social media” referencing the ads that were bought by so called Russian companies and not properly disclosed as such. Because of this, and other issues, consumers aren’t sure of who they can trust and are placing more of their trust in digital social media influencers. He also mentioned how these influencers are replacing celebrities and are changing the way advertising is created.

Influcencer Marketing is not only the latest trend, it is also one of the most cost-effective. Ron cited that studies have shown that working with influencers on a multi-channel campaign can drive up to 16 times more engagement than paid or owned media. Brands are working with these “micro”, lesser known influencers, who have smaller amount of followers, but their followers are more loyal. They must be true to their followers and also to the brand. Many are now working through multi-channel networks, turning these influencers into virtual content studios. The agencies may still be developing the overall creative concept, but the actual content is now created by all. Ron also cited the FTC letters that were sent to many influceners this past year and the updates to the endorsement guidelines that they posted.

All in all it was another great, full 3 days in Chicago and I’m looking forward to coming back again next year. I stayed an extra night and day this year to meet up with my daughter, Alex, who now is living outside of Chicago working as a veterinarian in an animal hospital in Libertyville, IL. I had dinner with her and her boyfriend, Tyler, Wednesday evening. Then Alex and I got to do some shopping up and down Michigan Ave. the next day before she took me to the airport to fly back home. We bought each other Christmas presents, though she kept hers and I won’t get mine till Christmas Day when she’ll be coming home.

2016 Annual BAA Marketing Law Conference Recap

We attended the BAA’s 2016 38th Annual Marketing Law Conference which wrapped up last week on Friday, Nov 11th. The organization (Brand Activation Association) had another great year in attendance with over 750 professionals ranging from leading regulators, legislators, corporate counsel, marketers and technology innovators who gathered again at the Marriott Hotel on Michigan Ave. This year’s conference was entitled “FACE-OFF: Dynamic Technologies Vs. Regulatory Controls.

“Ours is an industry of rapid evolution” stated Ed Kabak, SVP, ANA and Chief Legal Officer, BAA who kicked off the first official day of the conference. “Since we deal with best practices and the state of the art in Marketing and Advertising Law and Digital Media; IP and Privacy, FTC, State A.G. and state-regulation, Lanham Act, Class Actions, and other areas, this forum is invaluable for marketers to move responsibly forward.”

The conference started off with a day of pre-conference sessions dedicated to basics as well as advanced subjects. I arrived in Chicago that day in time to attend the “Advanced Social Media Sweepstakes/Skill Contests/The Major Platforms and Pitfalls session. This included a nice review of the major platform promotional guidelines including Facebook, Twitter, Instagram, Pinterest and Snapchat. One case study reviewed was the “Drive a Tank” Sweepstakes where a gaming sponsor awarded a grand prize that allowed the winner to actually drive a tank on top of two cars. There were 1.8 million entries from 40,000 entrants who were awarded extra entries from sharing on Facebook and Twitter. There were several issues, such as they didn’t disclose with a proper hashtag to comply with the FTC’s endorsement guidelines and they had to take out additional liability insurance to allow for someone to actually drive this tank.

As has been the case in past years, once the conference officially opened we heard from Linda Goldstein, a Partner and Head of the Advertising, Marketing and Media practice at Manatt, Phelps & Phillips LLP in New York who delivered her annual industry review. Linda reviewed some of the most newsworthy developments of the year and what they mean for marketing and advertising lawyers and professionals. Linda’s talk is always very informative and entertaining as she reviewed again the basics of sweepstakes and skill contests along with social and digital media legal issues from some of the latest promotions.

Linda noted that Scavenger Hunts are making a comeback and questioned if these type of promotions pose a time consideration. Delta Airlines ran a Snapchat promotion where participants had to look for filters throughout the LA area. How much time is too much? The Supreme Court did state in a prior ruling that a half an hour is okay. She recommended that you use your gut and impose limits if you feel uncomfortable about the risk.

As far as consideration in mobile promotions, data charges may apply if having to use only a mobile app. Text messages should still have an AMOE and you should disclose that text messaging charges may apply. However, if downloading a free app, there is no consideration, however if the app is a free trial and the participate has to actually cancel to avoid future charges that could be troubling.

Linda entertained us throughout her talk with videos of a new, imaginary app her team created called PizzaMon Go! It included real robots who would come to you and make you a artisan, personal pizza with your choice of toppings. Several issues arose as these young entrepreneurs launched this new technology including privacy issues, in-app purchase requirements, weather related issues that impacted events, and more. In the end, one of the robots was designated as our next Supreme Court Justice.

On Friday morning we were treated to another highly entertaining presentation from Ron Urbach, Chairman/Davis & Gilbert LLP, who also demonstrated how important it is for those in our industry to keep current. His presentation was on the interplay of marketing and advertising law to activate brands. Ron stated that every day attorneys make risk decisions when advising clients so it would probably be helpful for them to know what is on the regulators’ minds. We get asked the question quite often, what are the risks involved? Ron reminded us that Attorney Generals are political animals who will track publicity; that the “reasonable person” standard invoked by the FTC may not be what is considered reasonable at the state level; and that consumer complaints can drive AG actions.

Some recent examples Ron gave was that the FTC charged Lord & Taylor that it deceived consumers through paid articles and paid Instagram posts from the online publication Nylon that came from 50 “Fashion Influencers” promoting a certain dress. Warner Brothers Home Entertainment paid certain gaming influencers, such as PewDiePie, to post positive comments about the Shadow of Modor Game. The Kardashians have been charged that they did not disclose their relationship to the brands that they hype of Instagram.

Ron did emphasize that promotion is one way for a brand to develop trust with consumers. So it’s always best to be transparent. One thing that I have always heard since the early days of social media. The promotional terms for sweepstakes and contests are a contract with the brand and the consumer. So he advised not to use last year’s terms and to learn from the lessons of the last year. Be consistent with what you say to the consumers, in your ads, through your social influencers, entry materials and POS. Ron ended his talk with a video that asked people on the street “If you were a hashtag, what would you be?” Ron’s was #WhatIDoForClients. Here is another one of Ron’s videos that he shared with us on the “Regulators”.

This year’s conference did start off the day after the election. So there was quite a bit of discussion about it during the breaks and cocktail receptions. It was noted that Donald Trump has spoken out against the new privacy rules the FCC has imposed along with some changes to the advertising tax laws that are on the table. So 2017 looks to be the busiest congressional year yet. We can review what these changes will be at next year’s 2017 BAA Marketing Law Conference which will again be back at the Marriott on Michigan Ave. in Chicago starting on Nov. 13. Hope to see some of you again there.

Sweepstakes, Contests, Social Media, Real-Time Marketing, FTC, all focus at BAA’s 37th Marketing Law Conference

The BAA’s 37th Annual Marketing Law Conference just wrapped up on Wednesday, Nov 11th, in Chicago which I was glad to attend. The organization (Brand Activation Association) broke another attendance record with over 760 attendees who ranged from leading regulators, legislators, corporate counsel, marketers and technology innovators who gathered again at the Marriott Hotel on Michigan Ave.

This year’s conference was entitled “Walking the Line: Between Innovation and Regulation”. “The theme of this year’s conference perfectly sums up the challenge of our industry and why our event is more important than ever,” says Ed Kabak, BAA’s Chief Legal Officer. As has been the case in past years, Wednesday’s first session featured Linda Goldstein, a Partner in the Media and Marketing practice at Manatt, Phelps & Phillips LLP in New York. Linda reviewed some of the most newsworthy developments of the year and what they mean for marketing and advertising lawyers and professionals. As usual Linda’s talk was very informative and entertaining as she reviewed again the basics of sweepstakes and skill contests along with social and digital media legal issues from some of the latest promotions. I wrote about Linda’s presentation from last year’s conference here in which she covered some of the same legal matters.

There were two central themes that appeared to be prominent at this year’s conference which Linda first touched upon in her presentation. The first was Real-Time Marketing. More brands are now putting much effort into connecting their product or service with consumers in the moment. To do this successfully, the content must be relevant. We reviewed many examples of those that pulled it off well and those that didn’t. Some brands have started using the new live streaming apps, Periscope and Meerkat, that are perfect ways to connect experiential marketing with consumers. However, broadcasting live video to the world has its inherent risks, along with possible copyright and trademark infringements

The other central theme was focused on the FTC’s Endorsement &Testimonial Guidelines which are not new, but it appears the FTC is now clearly monitoring what is happening online and on social media. Sweepstakes and contests are a material connection to the brand, and therefore need to be disclosed. They are recommending brands direct the participants to us the #sweepstakes, #contest, #entry hashtags along with their promotional hashtag in any social media posts that gain the consumer an entry. Another type of material connection that should be disclosed is an employer/employee relationship to the brand. The FTC charged Sony and their agency, Deutsch LA, with deceptive behavior on Twitter when it found that employees were using the same hashtag that the consumer was using, #GameChanger, when posting about their Playstation Vita handheld device.

Real-time marketing is one of the areas that the FTC is highly looking at. Linda ended her presentation by stating that trust is key and that brands that walk the talk will be rewarded. “These real time platforms will take us to new territories; we the attorneys’ must protect our clients as we walk the line between innovation and regulation.”

Wednesday morning we were treated to another highly entertaining presentation from Ron Urbach, Chairman/Davis & Gilbert LLP, who also demonstrated how important it is for those in our industry to keep current. Ron used the term “Disruption” to describe how today’s technology allows new brands and services to thrive. He pointed out Airbnb, which has changed the way we travel, and Kickstarter, the way we invest. So to help get his point across Ron created a video of a group of fictitious millennials who were using social media and technology to launch new products, such as DrinkAgain Pay Water Fountains and Rag Exchange – The Fashion Lease Experience. Ron was their lawyer, or as one of the female characters called him, their “interpreter”.

This video demonstrated several areas in which the group crossed the line and Ron had to reign them back in to stay compliant. We were reminded that if you link your product to a celebrity, don’t forget about the FTC endorsements guidelines. If you’re going to do live streaming, then you better establish guidelines, train the person(s) doing it and then monitor it carefully. Brands must also develop a social media policy, train employees, monitor and then enforce their policy. And, don’t forget to get consumer’s consent before re-posting any photos or videos of theirs.

Ron summed up his presentation by stating that today we need “Live Lawyering”, along with training and best practices. Pay attention to “Disclosure in a Disruptive World – and provide the right info at the right time in the right way.”

Hopefully many of us will be headed back to next year’s 38th Annual Marketing Law Conference. We were treated with some beautiful, unseasonably warm weather this year. Can the BAA conference team please schedule that for us again?

Here’s a summary of the various social media promotion guidelines

Last week at the 7th annual BlogPaws Conference in Nashville I presented a session titled Key Legal Developments in Sweepstakes, Contests and Social Media. So I thought I’d share here a recap of the section that covers the broad array of the guidelines for promotions from the various social media platforms.

Facebook
Back on August 7, 2014, Facebook announced on it’s Developer’s Page that it no longer would allow Like Gating. They gave developers and page administers a 3 month window to make any adjustments to their apps which went into effect in November. Here’s what they stated:

“You must not incentivize people to use social plugins or to like a Page. This includes offering rewards, or gating apps or app content based on whether or not a person has liked a Page. It remains acceptable to incentivize people to login to your app, checkin at a place or enter a promotion on your app’s Page. To ensure quality connections and help businesses reach the people who matter to them, we want people to like Pages because they want to connect and hear from the business, not because of artificial incentives. We believe this update will benefit people and advertisers alike.”

So you certainly can still ask fans to like your page, “Don’t forget to Like our page”. You just can’t make it mandatory in order to enter a sweepstakes or contest.

Then about a month after this announcement Facebook then changed their Promotional Guidelines again and stated that you no longer have to use an 3rd-party app and can run Sweepstakes and Contest promotions right on your Page’s Timeline by simply asking fans to Comment on or Like a post as a way to enter. We’ve seen some promotions run this way since the change, but the majority still appear to be using an app. The issue with running a promotion right on your page is that you are not collecting data on the participants and therefore it’s hard to contact the winner(s). So it all depends on what your objectives are in choosing which method to follow.

Twitter
Twitter’s Guidelines are pretty simple and overall they want to avoid “spammy” posts filling up their platform. When running contests or sweepstakes they ask businesses to ensure that participants follow their overall guidelines which include:

– Discourage posting the same Tweet repeatedly. This means do not create a sweepstakes where the most retweets win.
– Discourage the creation of multiple accounts in order to gain extra entries.
– A good practice is to always ask users to include an @ reply to ensure you can view all entries.
– Encourage the use of posts that are relevant to the contest. Don’t use a hashtag that is not related to the topic.

Instagram
Instagram’s Promotional Guidelines are somewhat similar to the other social media platforms which they encourage having a set of official rules that are legally compliant with the applicable rules and regulations for running a sweepstakes or contest. They also want the rules to state that the promotion is in no way sponsored, endorsed or administered by, or associated with, Instagram (as you should do with any social media platform that you are including as a method of entry.

The only additional guideline is do not inaccurately tag content or encourage users to inaccurately tag content (ex: don’t encourage people to tag themselves in photos if they aren’t in the photo).

Pinterest
Pinterest came out with some updates to their Brand Guidelines to include best practices for sweepstakes and contests. Here are some of the dont’s they suggest :

– Don’t suggest that Pinterest sponsors or endorses you or your promotion.
– Don’t require people to Pin from a selection – let them pin what they like,
– Don’t make people pin or repin your contest rules.
– Don’t run a sweepstakes where each pin, repin, board, like or follow represents an entry.
– Don’t encourage spammy behavior, such as asking participants to comment.
– Don’t ask people to vote with pins, repins, boards, or likes.
– Don’t overdo it: contests can get old fast.
– Don’t require a minimum number of pins. One is plenty.

Google + – Does still not allow promotions on their platform. You are only able to promote it on this platform.

FTC – Federal Trade Commission
Besides the social media platform guidelines, you should also be aware of updates on the FTC endorsement and testimonial policy. They recently published a list of Q&A’s that you may want to take a look at. When it comes to sweepstakes and contests they state that any incentive, no matter how minimal such as an entry into a contest or sweepstakes for making a post on social media sites, may be an endorsement. Thus it requires a disclosure. The use of the promotion title alone is not adequate, and they are encouraging including #Contest or #Sweepstakes or #Entry or similar designation in a hashtag. The recent updated Q&A’s say that using #sweeps is not enough and instead it should be the whole word in this case.

That’s all the latest that I’m aware of. They change on a regular basis, so it’s tough to stay updated, but hopefully this summary will be of help to all. If you have any further updates you are aware of please share them here.