A Pinterest contest conducted by Cole Haan, Inc. recently resulted in an FTC warning. Shoe company Cole Haan held a contest via Pinterest that required contestants to create a board entitled “Wandering Sole.” Contestants then had to pin at least five images from Cole Haan’s Wandering Sole Pinterest Board, as well as five other images of the contestants’ “favorite places to wander,” tagging each pin with the hashtag #WanderingSole.[1] Cole Haan promised to award a $1,000 shopping spree to the contestant with the most creative entry.

According to the FTC, the pins of the Cole Haan products were endorsements, and the $1,000 shopping spree was a material connection between the contestants and Cole Haan. In 2009, the FTC revised its Guides Concerning the Use of Endorsement and Testimonials in Advertising (the “Endorsement Guides”)[2], pursuant to Section 5 of the FTC Act, to require disclosure of any “material connection” between an advertiser and a consumer’s (or celebrity/expert) endorsement of the advertiser’s products. Thus, when a “material” relationship between an advertiser and an endorser is not otherwise apparent from the context of the communication that contains the endorsement – in this case, the pin board contest entries – the connection or relationship must be disclosed.

The $1,000 shopping spree prize, according to the FTC, was a “material connection” that was not readily apparent to consumers who saw the pin boards at issue, and the #WanderingSole hashtag was insufficient to communicate this material connection. Under these circumstances, “entry into a contest to receive a significant prize in exchange for endorsing a product through social media constitutes a material connection that would not reasonably be expected by viewers of the endorsement.”

Although the FTC decided not to recommend enforcement action against Cole Haan since it had never publicly addressed the issue before, companies administering contests through social media, particularly through Pinterest should take heed of this warning going forward. All social media posts that are induced by an advertiser as a sweepstakes or contest entry mechanism, should clearly disclose the connection between the company and the contestant so as not to run afoul of the FTC Endorsement Guides. For a copy of the FTC’s closing letter to Cole Haan, please click here.