ADventures in Law

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The National Advertising Division (NAD) of the Better Business Bureau is just like us! They seem to watch “Love Island” and maybe even “Too Hot to Handle” (#blushing) if the latest news is any indicator. As part of its routine monitoring program (we know you mean 2 a.m. scrolling, NAD Squad), NAD checked in with popular Gen Z and millennial fashion retailer <a href="https://www.revolve.com/aboutus" target="_blank" rel="noreferrer noopener">Revolve Group Inc.</a> to understand the relationship between the brand and certain reality stars who had posted about Revolve clothing on Instagram. It looks like those ambassadors – <a href="https://www.instagram.com/georgiahassarati/?hl=en" target="_blank" rel="noreferrer noopener">Georgia Hassarati</a> and <a href="https://www.instagram.com/xoalyynicole/?hl=en" target="_blank" rel="noreferrer noopener"><a href="https://www.instagram.com/xoalyynicole/?hl=en">Alyssa Nicole Nelson</a></a> – were playing things too close to the vest and should have disclosed a material relationship with Revolve.

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The posts in question tagged @Revolve and used the #revolveme hashtag, but NAD argued those indicators were not enough to clarify the ambassadors’ relationship status with Revolve. Interestingly, it looks like Revolve does not necessarily pay all of its ambassadors; instead, Revolve sometimes provides credit for Revolve products in exchange for posts. Under this program, Revolve provides specific terms and conditions during the checkout process that instruct ambassadors to clearly and conspicuously disclose their relationship to Revolve, as the sponsor of the posts.&nbsp;

While Revolve’s checkout terms did instruct ambassadors to comply with applicable laws related to endorsements and testimonials, the language was easy for a reader to miss. NAD also noted that Revolve should include more detailed instructions on how to comply with applicable laws by including sample hashtags, placement instructions and examples of compliant posts.

NAD recommended that Revolve modify ambassador posts to clarify the material connections between Revolve and ambassadors in its product gifting program. In a twist, even after the revisions, NAD said that while @georgiahassrati updated her Instagram posts, the disclosures still fell short. One post included “@laneige_us @revolve #giftedbyrevolve” and another just tagged Revolve [@revolve] with the hashtag #giftedbyrevolve. NAD said this was not enough: “[T]he disclosure (#giftedbyrevolve) runs words together and makes it difficult for consumers to understand.” In “Love Island” speak: A crystal clear disclosure such as “Sponsored by [brand]” is likely a better way to clarify whose basket this ambassador’s eggs are in.

Nelson’s posts stated, “Wearing @revolve @loversfriendsla #sponsored.” NAD said tagging multiple brands was a red flag, making it difficult for consumers to know which brand is sponsoring the post. This theme came up in late in 2023 too, when NAD said advertisers should be wary of brand blurring when it comes to sponsored posts. NAD <a href="https://bbbprograms.org/media-center/dd/cariuma" target="_blank" rel="noreferrer noopener">recommended that Cariuma</a> – a shoe brand – modify its sponsored posts on certain editorial publication feeds to make sure consumers knew the posts were paid endorsements for Cariuma and not sponsored by the publications like Travel + Leisure and Us Weekly. The #sponsored disclosure alone was nebulous, according to the Federal Trade Commission.

In this matter, Revolve has committed to amp up its monitoring of ambassadors’ posts and has modified its brand ambassador guidelines to help ensure compliance with the <a href="https://www.federalregister.gov/documents/2023/07/26/2023-14795/guides-concerning-the-use-of-endorsements-and-testimonials-in-advertising" target="_blank" rel="noreferrer noopener">Federal Trade Commission’s (FTC) Endorsements and Testimonials Guides</a>.

Brands hope their ambassador programs draw the right kind of attention, not regulatory scrutiny or consumer complaints. Here are some practical suggestions to help manage risk and protect your brand:

Know Your Type: Work to engage ambassadors who have a demonstrated history of proper disclosures and content that’s a good brand fit.

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Communicate Your Intentions: In your brand ambassador guidelines, require specific, consistent disclosures. For multi-word disclosures, consider plain type versus hashtags: “Sponsored by [brand].”

Deep Dive the Socials: Ensure monitoring of ambassadors is scoped properly in your social agency agreements. Designate in-house resources to spot-check and monitor at the brand level too.

Vet Your Prospects: Preapprove content and disclosure placement when possible.

Don’t Close Off Too Soon: In your ambassador form agreement, include the right to hold back payment or credit if the proper disclosures are not used.

Talk Around the Fire Pit: Instruct ambassadors to revise nonconforming posts and disclosures promptly to make sure they comply with your guidelines as well as the FTC Endorsement Guides.

You Broke Up for a Reason: End relationships with repeat offenders, and don’t hire them again unless things change. Practically, brands carry more risk than the ambassadors for use of improper disclosures.

Listen to What People Are Saying: Consult this summary prepared by the FTC for common questions and answers around ambassador engagements and disclosure best practice: <a href="https://www.ftc.gov/business-guidance/resources/ftcs-endorsement-guides-what-people-are-asking" target="_blank" rel="noreferrer noopener">The FTC’s Endorsement Guides: What People Are Asking</a>.

NAD Keeps It Real: Recommends Modification of Reality TV Ambassadors’ Posts to Clearly Disclose Material Connection to Clothing Retailer #Ad