The Federal Trade Commission recently concluded an investigation of Cole Haan with regard to its “Wandering Sole” Pinterest contest. The contest required entrants to create Pinterest boards with images of Cole Haan products and the hashtag #wanderingsole for a chance to win a shopping spree.

The FTC concluded that the pins constituted an endorsement of Cole Haan and that the chance of winning a prize by pinning those images was a material connection that needed to be disclosed. The FTC also noted that it did not believe that the #wanderingsole hashtag adequately communicated the material connection. The FTC elected not to recommend enforcement action, noting it had not previously addressed whether entry into a contest was a material connection nor whether a pin on Pinterest may constitute an endorsement. The FTC also noted that since the time of the contest, Cole Haan had adopted a social media policy that addressed the disclosure concerns noted by the FTC. The FTC concluded the letter by stating that it expects Cole Haan “will take reasonable steps to monitor social media influencers’ compliance with the obligation to disclose material connections endorsing its products.”

TIP: This closing letter offers a look at the FTC’s interpretation of its Guides Concerning the Use of Endorsements and Testimonials in Advertising in the context of online promotions. Companies asking consumers to promote their products in social media in exchange for the chance to win a prize should be sure to instruct entrants to disclose the fact that the entrant’s post is an entry into a contest or sweepstakes. One way to do this is to require entrants to include a hashtag disclosing that the post is a sweepstakes or contest entry, or is “sponsored.”