In a win for self-regulation, eight months after referring a matter involving Instagram posts for Alo Yoga to the FTC, the Electronic Retailing Self-Regulation Program (ERSP) secured the company’s agreement to modify the posts to bring them into compliance with the FTC’s Endorsement Guides, as reported in a new decision issued by ERSP.
In 2018, the self-regulatory body opened an inquiry into Alo, LLC (“Alo Yoga”), a yoga apparel company, after reviewing approximately 60 Instagram accounts containing endorsements of Alo Yoga that looked to have a material connection with the company without disclosing such connection. While the company conceded that several individuals identified in ERSP’s inquiry were Alo Yoga “ambassadors” and agreed to voluntarily prepare guidelines for its ambassadors, the company did not state whether it would comply with ERSP’s recommendation to modify or discontinue the posts. Consequently, ERSP referred the matter to the FTC, which then alerted Alo Yoga. The FTC’s involvement prompted Alo Yoga to reengage with ERSP, resulting in the most recent decision from ERSP.
In the new decision, ERSP reiterated its concerns about the lack of disclosures by the Alo Yoga brand ambassadors on their Instagram posts and noted that even some of the posts that Alo Yoga did modify failed to include the disclosure above the “more” button, as required by the FTC’s Endorsement Guides. Several of the posts included the “#ad” at the end of several paragraphs or couched the disclosure between several other hashtags. Some of the Instagram posts were written in English with hashtag disclosures in another language. ERSP wrote that these disclosures are not “sufficiently prominent based upon the FTC’s guidance.”
Alo Yoga agreed to modify the specific Instagram posts to include the text “#ad” or a similar disclosure and promised not to repost on its own corporate account Alo Yoga influencer posts that do not include the specific #ad or #sponsor hashtags or similar disclosures.
Finally, although ERSP commended the advertiser on drafting its own brand ambassador guidelines, it remained concerned that the document didn’t require the company to follow up with social media influencers if the company saw questionable practices.
While a company cannot control the editorial content of influencer posts, “this does not relieve social media influencers from the requirement to include a clear and conspicuous disclosure by simply adding a hashtag such as #ad,” according to the decision. ERSP recommended that “the marketer effectively monitor Instagram posts by Alo Yoga influencers to ensure that any material connection between the influencer and the marketer be clearly and conspicuously disclosed and follow up when they see practices that may violate the FTC Guides to ensure compliance.”
To read ERSP’s press release about the case, click here.
Why it matters: Self-regulatory bodies remain active in monitoring influencer activity on social media, and the FTC will step in if the marketer does not comply with recommendations of the self-regulatory bodies. The Alo Yoga decision provides valuable reminders regarding compliance with the FTC’s Endorsement Guides: (1) Disclosures must be displayed above the “more” button and not buried in the middle of a long string of hashtags; (2) disclosures must appear in the same language as the rest of the post and continue to appear in subsequent posts so consumers need not search back through old posts to understand that a material connection exists; and (3) while the FTC’s Endorsement Guides place some responsibility for compliance on influencers, advertisers partnering with influencers remain on the hook and should have reasonable programs in place to train and monitor their influencers.