Social media is not just a marketing novelty - it has
become the essential tool for running a promotional contest. Have a
look at any big brand contest and you're hard pressed to find
one without a social media component. Many Canadian
businesses also seek to extend their reach into the US market
through promotional contests.
If you are in that category, take note of this recent FTC action
against shoe-maker Cole Haan. At the conclusion of their investigation, the
FTC warned that the structure of the contest was misleading to
consumers since it employed contestants to create Pinterest boards
using the #wanderingsole tag, which turned these pins into
endorsements for Cole Haan products (...which was the whole
point of the contest...). However, FTC rules are clear that the
connection between endorsers and marketers should
be made clear. While no penalty was levied against Cole Haan, this
letter has served as notice to the rest of the industry that the
FTC will be watching such contests to ensure that these
endorsements are made sufficiently clear.
In Canada, the Competition
Bureau oversees false and misleading
advertisements, including the apparent endorsement of products by
The business lessons are clear: a successful social media
contest can back-fire if you get more publicity from an FTC or
Competition Bureau investigation than from the contest. Not to
mention potential penalties. Get advice on your social media policy
and contest rules before you launch the next campaign.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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In less than nine months, on July 1, 2017, persons affected by a contravention of Canada's anti-spam legislation will be able to invoke a private right of action to sue for compensation and potentially substantial statutory damages.
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