In a recent letter to shoe retailer Cole Haan regarding its Wandering Sole Pinterest contest, the Federal Trade Commission (FTC) signaled a major change for promotional contests conducted through social media platforms.  In the letter, the FTC determined that the Pinterest contest sponsored by the company was a form of product endorsement, subject to Section 5 of the FTC Act, which requires the disclosure of a material connection between a marketer and an endorser when their relationship is not otherwise apparent from the context of the communication that contains the endorsement.

In the Wandering Sole Pinterest contest at issue, participants were asked to post five pictures of their favorite Cole Haan shoes and five pictures of their favorite places to wander, tagging each picture with #WanderingSole. Cole Haan promised to award $1,000 to the participant with the most creative pictures.

Cole Haan’s contest was a pretty straightforward Pinterest promotion, similar to others commonly run by advertisers. However, in this case the FTC determined that participants’ posts featuring Cole Haan products were endorsements of the company and that viewers of the posts would not reasonably expect that the posts were incentivized by the chance to win $1,000. The FTC expressed additional concern that Cole Haan did not instruct contestants to label their posts and Pinterest boards to make it clear that they had pinned Cole Haan products as part of a contest.

The FTC acknowledged that prior to the letter to Cole Haan, it had not publicly addressed whether entry into a contest is a form of material connection, nor whether a pin on Pinterest constitutes an endorsement, so the FTC opted to send the letter and not commence any further proceedings.

What does this mean for advertisers wishing to conduct Pinterest contests and social media promotional contests in general?

Importantly, the letter does not challenge the legality of such promotions and contests, but rather imposes additional disclosure requirements. Unfortunately, the FTC letter did not include guidance on disclosures that would have been sufficient. Until further guidance is issued, marketers and advertisers should take extra care in promotional contests across all social media platforms that rely on user generated content.