As we’ve noted in previous posts, if a company provides incentives to a consumer in order to encourage the consumer to promote the company’s products, the consumer is required to disclose those incentives. It’s not just the consumer’s problem, though. The FTC has stated that a company can be held liable for a consumer’s failure to make the disclosure. Fortunately, though, there are easy steps that a company can take to protect itself in case consumers don’t comply.
The FTC recently investigated a promotion conducted by one of Hyundai’s advertising agencies in which bloggers were given gift certificates as an incentive to include links to Hyundai videos in their posts or to comment on Hyundai’s upcoming Super Bowl ads. Many of the consumers did not disclose that they had received the gift certificates. After reviewing the promotion, however, the FTC decided not to pursue the case for a few reasons.
First, the FTC determined that Hyundai did not know about the incentives, that a small number of bloggers were involved, and that some of them did disclose they had received an incentive. Second, although advertisers can be held responsible for the actions of their agents, the actions in this case ran counter to both Hyundai’s and the agency’s social media policies. Moreover, the agency promptly took action after it learned that some bloggers hadn’t made the appropriate disclosures.
This case serves as a reminder that companies who engage in social media should have a policy that provides endorsers with guidelines about what they can, can’t, and must do. It’s not just enough to have the policy in place, however. Companies must also monitor to ensure endorsers comply with the policy, and take action against those who don’t.