Did Lord & Taylor’s Hot Instagram Campaign Thumb Its Nose at FTC Disclosure Rules?

Last weekend, Lord & Taylor scored a social media coup with an Instagram blitz that had 50 fashion influencers wearing the same dress, which sold out right away.

There was, however, one blotch on the campaign's success: Neither Lord & Taylor nor its content partners disclosed to followers that this was a paid promotional campaign. The brand told Adweek earlier this week that it provided influencers with the dresses and an undisclosed amount of compensation.

By not including #ad or #sponsored in the posts, the effort would seem to contradict the FTC's disclosure rules, which require businesses and content creators to let audiences know when social posts are paid placement.

(Lord & Taylor did not respond to multiple requests by Adweek for comment on the lack of disclosure.)

 

So excited to be dressing for spring in this dress from @lordandtaylor's new #DesignLab collection!!

A photo posted by Cara Van Brocklin (@caraloren) on Mar 27, 2015 at 10:27am PDT

Lord & Taylor is certainly not the only brand whose sponsorship has been played down in social posts, but some who specialize in influencer marketing say that bypassing disclosure violates the unofficial ethical codes of social media professionals and risks FTC backlash against the entire industry.

Regulators in the U.K., for example, are far stricter about this sort of thing. Last November, Britain's Advertising Standards Authority banned a series of YouTube videos in which British influencers promoted Oreos, with the ASA noting that parent company Mondelez did not make clear to consumers that the clips were paid ads.

Danielle Wiley, CEO of influencer agency Sway Group, said although she loved the Lord & Taylor campaign "from a results perspective," her company was concerned with the lack of transparency on paid placement.

"It was disheartening to see the lack of disclosure," she said. "We insist on disclosure on the part of our influencers and ensure it with our QA [quality assurance] department, who checks every piece of content. I think they are discouraged when they see high-profile Instagrammers who don't bother to disclose. It's confusing, for sure."

 

Spring style wearing a #DesignLab dress exclusive to @lordandtaylor // #spring #style

A photo posted by Devon (Dyer) Cruse (@devonrachel) on Mar 27, 2015 at 2:57pm PDT

And, of course, when a campaign like this succeeds without disclosure, other brands could point to it as an example of FTC rules being optional.

"As an agency who connects brands to influencers, it makes our job a lot more difficult. When brands see a successful campaign like this without the ugly little "ad" disclosure in the caption, they want the same thing for themselves. 'If not disclosing is OK for Lord & Taylor, why isn't it OK for us?'"

Ted Murphy, CEO of content creator network Izea, said it's good to see the success of an Instagram campaign like Lord & Taylor's, which "speaks to the power of the medium."

But Murphy, who said he helped advise the FTC on its guidelines for social disclosure, said that by not including a clear statement of sponsorship in posts, the campaign "hurt brands, creators and consumers."

Though he admits the FTC is usually (but not always) silent on enforcement in such cases, Murphy argues that if more marketers skip disclosure, it could become a standard industry practice. 

"There are two issues here: What are you legally required to do, and what's the right thing to do?" Murphy said.

When agencies and content creators insist on transparency, he said, it helps "protect the creators' credibility for the audience" in the interest of developing long-term relationships, as opposed to "short-term gains."

This stance is not always popular with marketers, and Murphy said Izea has "lost clients who asked us to remove such disclosures."

So what's the worst that could happen if nondisclosure becomes the norm? According to Murphy, regulators could move from suggesting guidelines to more hands-on enforcement.

"If the FTC thinks the consumer is being tricked, they will eventually step in," he said. "If the industry can't police itself, then we force the government to do it. I don't think that's what we want."