What every marketer and PR pro should know about the Federal Trade Commission’s Lord & Taylor case.

Image via Cliff / Flickr; Used under the Creative Commons Attribution 2.0 Generic license.

Image via Cliff / Flickr; Used under the Creative Commons Attribution 2.0 Generic license.

In late March, the Federal Trade Commission (FTC) entered into a significant consent decree with Lord & Taylor. This is important for every marketer and PR and social media agency because it is the FTC’s first case under its recently issued native advertising guide for businesses, which I predicted would lead to more enforcement activity by the FTC. The FTC asserted that a Lord & Taylor social media campaign violated both the FTC’s native advertising guide and its endorsement guidelines. As a result, Lord & Taylor has entered into a 20 year consent decree.Successful, but misguided
In early 2015, Lord & Taylor launched a comprehensive social media campaign to promote its new Design Lab collection, a private-label clothing line targeted to women between 18 and 35 years old. The retailer’s market plan included the dissemination and placement of branded blog posts, photos, video uploads, native advertising editorials in online fashion magazines, and online endorsements by a team of specially selected “fashion influencers” over one “product bomb” weekend. These efforts focused on a specific Design Lab paisley dress. The FTC’s complaint alleged that Lord & Taylor paid Nylon, a pop culture and fashion publication, to run an article online about the Design Lab collection, which included a photograph of the paisley dress. Lord & Taylor also paid Nylon to post a photo of the dress on the publisher’s Instagram site, along with a caption that stated Lord & Taylor had reviewed and approved the content.

Over the same weekend, Lord & Taylor incentivized 50 fashion influencers to post a photo of themselves wearing the dress — styled according to their choice — on Instagram, in exchange for giving the influencers the dress for free and paying them an amount between $1,000 and $4,000. The social media campaign was immensely successful, reaching 11.4 million individual Instagram users in just one weekend and leading to 328,000 brand engagements with Lord & Taylor’s Instagram handle. The dress quickly sold out.

 

Read more at http://www.prweek.com/article/1391111/3-takeaways-ftcs-first-deceptive-marketing-case-new-native-ad-rules#pIy0SsLswLIm17tR.99