Lord & Taylor may have violated FTC rules with Instagram campaign

Dive Brief:

  • With the help of 50 Instagram users, Lord & Taylor recently garnered a lot of attention for a bohemian dress that sold out thanks to a barrage of posts on the social media app.

  • But it turns out it wasn’t a naturally viral splash, but a coordinated — and paid — campaign by the retailer.

  • The lack of disclosure that Lord & Taylor paid Instagram users for these posts could violate the Federal Trade Commission’s rules, which require companies to let social media users know when posts are sponsored or paid.

Dive Insight:

Just a hashtag showing that a social media post is a #paid #ad is all this Lord & Taylor campaign neededbut then it wouldn’t seem so social-media-ish, right?

Maybe. But while Danielle Wiley, CEO of influencer agency Sway Group, told Adweek that the campaign’s results were impressive, she said the lack of disclosure was problematic.

"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 [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.”

But the trouble with this oversight by Lord & Taylor is not just that it’s confusing, or even that flouts the spirit (and possibly the letter) of FTC rules. It’s also that there’s no better way to undermine the value of social media than to lose the trust of users. Lord & Taylor may have sold out one dress, but in the process may have also done real damage to its own long-term social media performance as well as that of other retailers.

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Filed Under: Marketing
Top image credit: Instagram