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FTC Endorsement Guidelines Update: Disclosing a Sweeps or Contest Entry on Social Media

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Cole Haan WestFarms

(Photo credit: Wikipedia)

 Disclosure: Not a lawyer. Don’t play one on the Internet. But I’ve studied the FTC endorsement guidelines. A lot. 

Yesterday news broke that the FTC had issued a warning to shoe manufacturer Cole Haan, notifying it that the disclosures used by consumers in its Wandering Sole contest on Pinterest were not sufficiently clear as to the potential material connection between contest entrants and the company. Said the letter (as quoted in MediaPost):

“We do not believe that the “#WanderingSole” hashtag adequately communicated the financial incentive — a material connection — between contestants and Cole Haan,” Mary Engle, FTC associate director for advertising practices, said in a letter sent to the retailer’s attorneys on March 20.

This represents an evolution in the FTC’s thinking with regard to disclosure of a sweepstakes or contest entry. In the early days, it did not explicitly require such a disclosure when a blogger mentioned a brand in a post to enter a sweeps or contest.  In part, because there was no material relationship between the parties, so there was nothing to disclose. And, for the most part, back then (2010!), in text-based formats like blogs and Twitter, sweeps and contest entries were often disclosed as part of the entry instructions. Hence no confusion.  [Facebook only allowed contest entries on pages recently.]

So what has changed? The endorsement guidelines are grounded in two basic concepts:

  • is there a material (compensated) relationship between the parties, and
  • is there a possibility of consumer confusion about the relationship?

In my opinion, the FTC’s thinking has evolved due to the prevalence of contest and sweepstakes entries, particularly on the highly visual Pinterest, that mimic organic endorsements, and do not have clear disclosure that they are a contest or sweepstakes entry. In other words, that the posting is motivated by a commercial incentive, not an organic interest in the product. Quite simply, all these sweeps and contests were causing too much consumer confusion.

The resolution is pretty simple, and follows the same simple guidelines that normal disclosure does. When possible, use natural language to disclose the relationship (Pinned for the Blah Blah Sweepstakes) and use clear hashtags (#sweepsentry) or @ addressing (@BlahSweepsEntry) to make it crystal clear. Using the hashtag or @ addressing is useful even if you also require a natural language disclosure as it makes it easier to track the entries. IMPORTANT: Make the proper disclosure part of the requirements to enter the sweeps or contest.

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Shining a Light on the Native Advertising Debate

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Disclosure: I am Vice President, Influencer Marketing at BlogHer. Advertising and social media marketing programs are a significant source of revenue for my company and for the bloggers in our advertising network.

In December, the FTC held a workshop on Native Advertising,  the practice of embedding/including advertising messages in editorial spaces. Prompted by concerns that publishers are not disclosing sufficient information to consumers, the workshop was mostly focused on native advertising on publishers’ sites and portals. Although there are some implications for sponsored content on independent blogs, there was nothing in this workshop that replaced or changes the endorsement guidelines updated in 2009.

The FTC regularly holds public workshops to discuss and document the points of view on a topic for which they might issue a regulation.  Nothing really new comes to light, but the workshops are a good way to understand the current market thinking on a topic. How it works in a nutshell:

  • Participants file a public comment on the matter with the FTC in order to be “invited” to the workshop (and not all are given speaking slots).
  • During the workshop, the participants clarify and defend these previously established positions.
  • Often participating organizations time related press announcement to the workshop date to maximize the reach of their point of view. For example, the IAB released its Native Advertising Playbook on December 4th, the day of the workshop.
  • Following the workshop, the FTC may (or may not) eventually issue regulatory guidelines.

If you aren’t on the hot seat, FTC Workshops are excellent policy wonk theater. From the coverage, this one did not disappoint. Seen on Twitter, largely paraphrasing commentary by columnist Bob Garfield:

raju: “We are all trying to make money” Yes, but with a “boatload of shit.” Arguments fly in US @FTC hearing on #NativeAds bitly.com/1bid3ie

sulliview: “A conspiracy of deception. A hustle. A racket. A grift.” And other kind words for native advertising:adage.com/article/media/… h/t @raju

If you were looking for a conclusion or a ruling, though, you would definitely be disappointed at the outcome (to-date) of the workshop. As is often the case, FTC workshops end with everyone realizing just how a) far apart the various protagonists/antagonists are on the issues and b) how confusing the topic is, both organically and as manufactured by the protagonists and antagonists.

Among other issues, the different players in the online media industry are using the term “native advertising” to mean  multiple, often disparate things. Many of which already existed in somewhat similar form, online and off.  At best, this makes conclusions about concrete action difficult for the regulators.  At worst, it makes it obvious that sometimes the lack of clarity is deliberately intended to confuse consumers about the paid nature of the content and implied endorsement. Online and offline, sometimes it is just hard tell where the editorial ends and the advertising begins. Blurred lines (the name of the FTC workshop) indeed, and certainly why the FTC intends to keep a sharp eye on native advertising in the coming year.

I’m watching the ongoing debate with some interest. In part because HULLO ethics policy wonk here! but also because these discussions about native advertising impact my work with brands and influencers at BlogHer. We’ve been doing sponsored content for years, both on BlogHer.com and on the blogs of our Advertising Network members, and have long been a proponent of clear and prominent  disclosure of sponsored relationships, even before the revised FTC endorsement guidelines.

Sponsored posts are considered a form of native advertising. I’d argue that sponsored posts are the original native advertising, and many of the newer portal- and publisher- based forms are attempts to mimic the word-of-mouth potential of an authentic influencer endorsement. Other native ads are advertorials that blur the lines between the native editorial of a publisher — the magazine content — and advertising. For example, did the sponsor simply fund the space, and the article was written with the usual editorial objectivity of the publisher, or did the advertiser place the article fully written? Both types of post have their place in the content ecology, but sponsorship and in the case of my example, the level and degree of sponsorship, must be disclosed so consumers can make an informed decision.

On one side of this debate, we have the advertising and publishing industry that wants to expand the opportunities to reach consumers with marketing messages. And on the other, we have the watchdogs who are concerned that consumers aren’t getting adequate information upon which to base their decisions.

No one denies the need for disclosure. The sticking point seems to be what is an acceptable, meaningful disclosure.

We are arguing about the wrong thing. We are having a debate when we should be having a conversation. And not about the best way to disclose. Shaded boxes versus color cues, or whether we call something an ad, advertorial or sponsored, trap us in the minutiae of old media models.

One of the most interesting topics discussed during the workshop was a study conducted by the McCarthy Institute for IP and Technology Law. Among other things the study found that 50% of respondents did not know what sponsored advertising meant.  The study also suggested that consumers don’t care that much. Reported website emedia|vitals:

One question looms even larger than how publishers label the native ads that run on their site: Do consumers care? One-third of respondents in the McCarthy Institute study said they are not concerned about the difference between ads and editorial and that they would actually be more likely to click on something they think is an ad.

“So the important baseline question is, what are we protecting the consumer from?” asked Franklyn [McCarthy Institute Director David Franklyn]. “A growing number of consumers enjoy the hyperstimulation of the work that advertisers and publishers do. They don’t care whether it’s paid or unpaid – they may just want to be entertained.”

Should consumers care? Does it matter?  It seems that consumers aren’t nearly as fussed about whether a message is paid or unpaid as long as they can trust its credibility and the message is relevant and interesting.  This shouldn’t surprise us — it is the foundation upon which social media, and social media marketing, is built. That said, it is extremely important to note that while the consumer may not care whether an endorsement is paid or not, it is still vital that she know whether it was paid or not. Without disclosure, there is no foundation for the trust upon which social media engagement relies.

Trust and Relevance. 

Rather than get bogged down making advertising look like editorial because we think it increases its trust value if it looks “native,” let’s take a deep breath and realize that the consumer doesn’t care whether it is paid, owned or earned. Shareability is the new social currency.

I have written about this before so I am no less guilty of using the FTC workshop as a soapbox than any of the participants.  But it bears repeating: Developing a story so good that consumers are driven to share is the real goal. It’s not an either/or — either you use paid media OR you use earned media OR you use owned media.The best marketing strategies rely on all three tactics.

  Sharing Venn Diagram

Shared Media: Social’s New Currency
Source: BlogHer

And don’t shortchange disclosure in an attempt to make the message more appealing. It’s not necessary, and when you do so, you begin your relationship with your customer based on a lie. And really, that never works out well. In life or in business.

Matching the social platform to the marketing objective

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Matching the social platform used in a marketing campaign to the marketing objective of the campaign is the first step  of successful strategy. Yet, all too often, early adopters rush to the shiny new object, regardless of whether it is the right choice for the specific need. And on the extreme opposite of the spectrum, risk averse marketers wait. And wait. Until all the proof is in, and any opportunity for first (or even second) mover advantage is lost.

We want to aim for the middle ground – to be in the right place for our audience with the right message at the right time.

Let’s break it down.

Right platform? Consider the social platform in the context of your marketing objectives.  Is the platform conducive to your marketing need?

  • Blogs: The deep content on blogs drives readers through to consideration and often purchase. More than 85% of the BlogHer audience has purchased a product based on a recommendation from a blog (BlogHer Social Media Matters 2012).
  • Pinterest: Its curated content with aspirational and inspirational appeal acts as  long term consideration sets for consumers.
  • Facebook: Personal connections pique interest and foster consideration.
  • Twitter: Broad amplification drives awareness

Drive To Purchase Funnel

The Social Purchasing Funnel
Image Source: BlogHer marketing materials

Right time? Is your audience actively using the social platform? If your customers aren’t actively using a social platform, it doesn’t matter that it is the hot new thing. It is not the hot new thing for your brand. Continue to monitor, but move on, at least for now, for your overall marketing strategy. If you sense potential for the platform, be vigilant for an inflection point – that moment when enough of your audience is actively using the platform for it to be potentially useful in your marketing strategy. Maybe even test it with small pilot projects, but don’t expect any ROI from these pilots other than knowledge about the platform and your customer base. You are asking for failure if you expect your pilot project to deliver significant sales results.

Right message? Is your audience receptive to hearing about or engaging with your brand on this social channel? That they might not want to talk about your product doesn’t mean they might not engage with your company on related topics, but be honest about what you are bringing to the online conversation. Some advice I wrote in 2008 about the secret sauce for a perfect blog pitch might prove useful in this exercise.

You should spend at least as much time thinking about WHAT you want them to say/do, HOW you want them to react and engage with your brand, as you do slicing and dicing the demographics. More really, but I’ll settle for equal time to start. The social platform may be perfect and your audience ready and willing to engage with you, but if your message is forced and inauthentic, it will at best fall flat. At worst, you’ll understand the dark side of “viral” which is far closer to the real world meaning of the word than the sentiment behind the oft-repeated mantra of the social era: <clueless enthusiasm> let’s hope our story goes viral !</clueless enthusiasm>

Spend the time to sanity check your message and your ask, against the audience and the platform, and once you get started, monitor the community reaction closely and adjust as necessary. Spelling your name right is not a good substitute for positive brand awareness and corporate goodwill.

Who “owns” social platforms?

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Who “owns” social platforms? The user or the platform? The answer is both obvious, and yet not.

Clearly the developer of the platform (and its shareholders) own the business and its intellectual property. Deciding who owns the experience is a wee bit harder. Without the engaged users, there is no experience. In that respect the users are just as invested in the platform as its nominal owners.

This tension can sometimes get ugly. Nearly every time Facebook changes its terms of service, interface or algorithms, the users get restless, threaten revolt etc.

But what happens when a change in and enforcement of the terms of service impacts the business of its users. As when Facebook restricted sweepstakes and contests a few years ago. Restrictions it has since loosened. Or when Pinterest began applying daily pin limits to minimize spam and revising and enforcing its guidelines for contests and sweepstakes that involve Pinterest.

On some level, the platforms rely on creative users to experiment with business models to surface interesting ways of leveraging the platform. Is it then fair when the platform asserts its marks (pin, pinning), chooses to limit an activity (number of pins per day) or restricts something to itself alone as Facebook did with “advertising.” Perhaps not, but no one ever promised fair.

When you build your business on the back of someone else’s platform, you run the risk — always — of the platform making changes that impact your business. For example, when Pinterest asserted its claim to the concept of digital pins and pinning and signaled intent to enforce, a number of companies building third party Pinterest tools that used Pin in the name rebranded. Pingage became Ahalogy. Pinerly morphed into Reachli.

And last month, blogger Amy Lupold Blair was requested to not enforce a trademark she had registered for “Pinning Party” and to comply with Pinterest’s terms of service guidelines for sweepstakes and contests.

I am not a lawyer, nor do I play one on the Internet, and my purpose for sharing this example isn’t to overanalyze it or decide who is “right.”

Because it doesn’t matter. Pinterest has a terms of service, and reserves the right to change its TOS at any time. If you want to use the service, you have to play by its rules.

The company also has to be consistent in its enforcement of its TOS and defense of the claim to the concept of the digital pin. That means pinning only happens on Pinterest and no other business entity can own pin/pinning in a digital context. It may seem draconian when applied to a loyal user like Amy, but if Pinterest doesn’t assert its claims consistently, it sets dangerous precedent for when it tries to assert against the inevitable copycat platforms.

I’m far more interested in exploring how we can use social platforms in our marketing and business offerings without getting tripped up by the inevitable tension of who owns what. Here are a few thoughts. Your Mileage May Vary.

  1. Build your offering on something you can own independent of a platform. It can certainly leverage a platform but for maximum flexibility, the underlying concept should be portable. This is why content-based plays are so powerful. The “product” is the story. The platform is simply the conduit.
  2. If you have a great idea for technology play on top of/relying on a single platform, be honest with yourself. Are you a bleeding edge first mover? Or is your idea a breakthrough for the platform? Then it’s possibly worth trying to position you/your idea/your company as an acquisition candidate quickly. Whether the platform wants to leverage your technology, get you out of the way or both, this is a strike-fast play.
  3. An independent technology concept that might plug into multiple platforms is also a decent bet, but again first mover or breakthrough has an edge, and shopping yourself may take longer than you have funds. Your idea needs to have legs on its own. Does it really fill an unmet market need?
  4. Pick a name for your product/service/company that you can own. You can’t own another’s trade or service marks, so don’t use ’em. Very few companies will be as lenient as Twitter when it comes to use of their name in your name. As we’ve learned with Pinterest, that a term is a generic like “pin” isn’t enough to rely on if the company can prove that use of the generic term in the specific context is something it created beyond the generic meaning.

And you know that just because a domain name is available, that doesn’t mean the name is, right?

For most bloggers, the content-based play is the simpler choice. It allows you to build on your strengths as a storyteller without being married to a platform. Your power is in your story, and in who cares to read it/engage with it/converse about it. Not in how you share it.

Bottom line: don’t build your empire — however large or small –on someone else. Build it on YOU.

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The one about the swag

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Disclosure: I am Vice President, Influencer Marketing at BlogHer. While I work on digital and social marketing programs with many of the brands that sponsor our conference, I am not directly involved in the event side of our business and experience the Expo Floor much as any other attendee would. Except I can’t enter any of the sweepstakes 🙂 In my past life, however, I was in charge of event and channel marketing for multiple employers.

Other writers have already done an excellent job of sharing the attendee perspective on the brands at BlogHer and their promotional offerings.

I want to focus on the brand side of the equation. Whether you call it swag (PG version: stuff we all get), schwag (an alternative spelling) or trinkets and trash (a personal favorite), companies make the investment because it helps them achieve their marketing goals. Ultimately, the marketer wants the target consumer to buy her product, and she uses a variety of strategies and tactics to bring potential customers through the purchasing funnel of Awareness to Interest to Consideration to Purchase.

And marketers have been doing it for a VERY long time. For example this Coca-Cola coupon found on  Wikipedia.

From Wikipedia: Believed to be the first coupon ever, this ticket for a free glass of Coca-Cola was first distributed in 1888 to help promote the drink. By 1913, the company had redeemed 8.5 million tickets.

There are two kinds of swag — promotional items of varying utility (and price points) imprinted with the company name or other branding, and actual product, often but not always in sample sizes.

A defining characeristic of swag is that it is broadly distributed — at a conference, an event, as a product premium, on box, at the cash register etc etc. The intent is to reach large numbers of consumers. It is not deliberate seeding of product with known influencers, although with social media, the two tend to conflate, and there is more of an expectation that consumers are also influencers.

So, back to our two kinds of swag – promotional items (trinkets and trash) and actual product. CPG brands (food, cosmetics, household products) can more easily give away samples of their products than consumer durables like electronics, furnishings, and automobiles, but even they often offer promotional items, either instead of or in addition to product sampllng or coupons.

Promotional items

Why give away promotional items? In a word, awareness.

The more useful the trinket, the better the chance that awareness will lead to consideration. When I was an independent consultant, I gave away lens cleaning cloths in a little plastic case. People held onto them for years. At BlogHer 2008, I picked up a 3-outlet extender from Topix that I still use.

Utility doesn’t have to be longterm. Bottled water, personal fans and sunglasses may not make it home from the outdoor concert, but you can bet they will be well used during. It also doesn’t necessarily mean used by the consumer herself. Many trade show trinkets end up in the “look what I got you on my trip” bag that parents bring home to their kids, and that was just as true at the computer industry events I attended in my previous life as it is for blogging conferences. At BlogHer this year, I picked up pair of green sunglasses at the Turning Leaf booth, and my son wore them throughout BlogHer and our post-BlogHer vacation in Chicago.

Doug in Chicago, note green Turning Leaf sunglasses. (c) Susan Getgood 2013

In addition to utility, another factor to consider when selecting promo items is alignment with brand messaging. Fitness items align with wellness messaging, makeup accessories with cosmetics brands, cooking tools with food brands, and so on. Years ago, I worked for a company that made software for tire dealers, and we gave away tire gauges.

Finally, cost. Promotional items do not have to be cheap trinkets and trash. Luxury brands use promo items too, but their distribution is usually more limited than what we are discussing here, the use of promo items in a mass consumer marketing strategy. Generally, the cost of a promo item for mass distribution should be commensurate with the cost of the actual products as well as your overall trade show budget. Bottom line, don’t spend a lot but don’t default to the cheapest item in the catalog either.

Product samples

Product samples make their appearance at events in all sorts of guises — from sampling on site (usually supported by generous coupons and/or a promo item) to free product in trial or full sizes. Regardless of size or form, their role is to encourage trial. in other words, to jump the consumer right to the consideration stage. At BlogHer and other social media events that attract influencers, the brands want to connect with the consumer on two levels, as both a customer and an influencer of other customers (hopefully with some scale!)

Food and many beauty products lend themselves very well to onsite sampling, while others (shampoo, body wash, household cleaning as examples) work better as trial or full size “take-home” products.

The key is to integrate the promo item or sample into your marketing strategy, with a clear objective and desired result. In other words, don’t just give stuff out because everyone else is. Understanding the ROI of your swag can turn it from a cost item in your event budget to an investment in your brand.

All the exhibitors at BlogHer this year did a good job with their booths and swag. I didn’t really see anything that didn’t work for its intended consumer — and keep in mind that not every attendee at BlogHer was the consumer for every brand. That’s why there’s a Swag Swap set up for people to drop off the stuff they don’t want. Whatever is left at the end is donated to local charities.

That said, I do want to call out a few that are great examples of my points above.

Topix outlet from BlogHer 2008 and AloMune waterproof pouch from 2013

Starting with two very small items in the official conference swag bag. Verizon had a USB car charger plug that scores on all my promo item criteria – useful and reinforces Verizon’s branding as a mobile solution provider at a reasonable price point. Immune supplement manufacturer AloMune distributed samples of its product in a very useful cell phone sized waterproof pouch. Neither item was terribly expensive, but almost every attendee probably could find a use for them. Or knows someone who could. And bonus: small and packable so likely to make it home, even with attendees who were not checking luggage or shipping stuff home.

CVS was a sponsor at BlogHer and another conference I attended earlier this summer, Reviewer’s Retreat. At both events, it took the surprising, generous (and not cheap) approach of handing out swag bags of full size products. Not just one or two items — I didn’t count, but it was about what might fit in the hand basket you’d grab when you’d run into the store for a few things. At both conferences, it also was a wide variety — cosmetics, bandages, a first aid kit, cookies and other snack items, hand creme, sunblock and so on. Some of the items were CVS-brand, others were well-known (and not inexpensive) brands like Lubriderm, Roc and Aveeno.

Now, I don’t have first-hand visibility into the brand’s marketing strategy, but I’m guessing one objective is to increase the average basket size (purchase), and that is the goal supported by the generous swag bag. It’s a bold and noticeable move to reinforce the brand messaging — that CVS carries a wide range of merchandise, including food and snack items, at a variety of price points. It isn’t limited to prescriptions, toothpaste and OTC medicines.

I also really hope that the number of items isn’t a coincidence — that someone really did think about how many (as well as what) to include, to mimic that basket size.

Using my focus group of one, I’d say it works. A few days before we left for BlogHer, I had to pick up a prescription ($20) and while I was there, I picked up make-up remover wipes, vitamins, shampoo for my son and a bunch of other stuff, about $50 worth. I know I considered and purchased some of the CVS-brand items as a direct result of the Reviewer’s Retreat swag bag.

So, next time you hear someone bemoaning the swag and promotional items at conferences and events, remind them that swag is an important element in the event marketing mix, brands rely on it to achieve their marketing objectives and consumers welcome it.

And if you don’t want it, just don’t take it. It’s that easy.

'THAT WAS EASY!'

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