Did you hear the latest in corporate social media debacles? Cole Haan, purveyor of fine footwear, hosted a Pinterest contest that caught the attention of the Federal Trade Commission -- and not in a good way. Here's the low-down on what happened, and how to avoid making the same mistake that Cole Haan made:
The 'Wandering Sole' Contest
If you're not familiar with Pinterest, it's another form of social media where people essentially create online mood boards consisting of everything from recipes, to shoes, to home decor. Understandably, many brands' marketing departments have turned to Pinterest as a way to attract existing and new audiences.
Cole Haan hosted its "Wandering Sole" contest, which called for contestants to create a Pinterest board and pin five of their favorite Cole Haan shoes, with the #WanderingSole hashtag, for a chance to win a $1,000 shopping spree, according to MediaPost.
The FTC's Letter
On March 20, the FTC sent Cole Haan's attorneys a letter stating that the FTC was investigating whether Cole Haan's Wandering Sole contest violated the Federal Trade Commission Act. The problem? The FTC saw the contestants' pins as "endorsements" and that the pins did not make it clear that they were for a contest. The letter added, "We do not believe that the '#WanderingSole' hashtag adequately communicated the financial incentive -- a material connection -- between contestants and Cole Haan."
Despite that, the FTC chose not to pursue enforcement action for three reasons:
- The FTC never publicly came out and said that a contest is a "material connection," nor that a pin is an "endorsement";
- The contest was of limited duration and had limited participation; and
- Cole Haan had since adopted a social media policy that addressed the FTC's concerns.
Tips for Brands on Social Media
So how do you avoid the wrath of the FTC? Based on the letter, we've learned a few things:
- Material Connections, Endorsements and Contests. To play it safe, you should take the FTC's letter to Cole Haan as notice that the Commission probably will view social media contests as a potential "material connection," and any action that contestants take may be seen as an "endorsement." As such, be sure to brush up on the FTC's .com Disclosure requirements for digital advertising.
- Include Pinterest in Your Social Media Policy. First, if your company does not have a corporate social media policy, get to drafting one, pronto. If your company does have one, you must be diligent about updating the policy to include all forms of social media that your company uses. To do so effectively, the law department should have an open line of communication with the marketing department.
There is by no means a road map when it comes to social media because of the constantly changing digital landscape. That said, it's always best to take the safe route. To do so, make sure that the legal department stays up to date with changes in social media, and how your company is interacting with its customers.
- Federal Trade Commission Act Section 5: Unfair or Deceptive Acts or Practices (Federal Reserve)
- The Importance of Corporate Advertising Social Media Policies (FindLaw's In House)
- Navigating and Protecting Your Company on the Red Carpet (FindLaw's In House)
- Nordstrom Butts Heads With FTC Over Social Media Ad Disclosures (FindLaw's In House)