We saw two significant developments in 2014 for sponsors of sweepstakes and contests online. They are worth considering as sponsors plan and roll out their 2015 offerings.

1. Say good-bye to fan-gating promotions on Facebook.

Promotions administered through Facebook are now open to fans and non-fans alike. Effective November 5, 2014, among changes to its Platform Policy, Facebook restricted incentivizing users to like a page or use social plug-ins.  The intent was to increase the likelihood users genuinely engage with content they like. This change eliminates sponsors’ ability to condition entry into a sweepstakes or contest on entrants' liking their page, though it remains acceptable to have entrants enter a promotion through a page or app on Facebook.

2. Have contest/sweepstakes entrants disclose why they are promoting your brand.

Federal advertising law requires disclosure of any “material connections” between a marketer and an endorser when their relationship would not be apparent to a reasonable consumer. Last year the Federal Trade Commission (FTC) investigated fashion brand Cole Haan’s Wandering Soles contest on Pinterest as possibly violating this requirement (and consequently Section 5 of the FTC Act prohibiting unfair and deceptive practices). Although the brand only received a letter from the FTC and was not subject to an enforcement action, the FTC’s letter sent a clear message to online promotion sponsors: make entrants disclose they are posting, tweeting, pinning or otherwise sharing content to social media as part of a sweepstakes or contest through a hashtag or some other means that makes that clear. The FTC did not take regulatory action against Cole Haan in (large) part because this matter is one of the first instances where the FTC has indicated how to keep online promotions compliant with federal advertising requirements.

Why does this matter?

While the FTC makes publicly available guidance for complying with advertising requirements in the online/digital/social media context in the form of its “Revised Endorsement Guides” and “.com Disclosures: How to Make Effective Disclosures in Digital Advertising,” there will continue to be instances like this one where the FTC further interprets its own advice. Promotions on social media platforms are an evolving field of digital advertising, and will continue to change as platforms age and proliferate. Consequently, expect that legal standards for keeping promotions compliant will continue to evolve. In the meantime, it would be wise to heed the Cole Haan example as an indication of where the FTC is focused in its compliance efforts.

Cole Haan’s contest required consumers to post 5 pictures of their favorite Cole Haan shoes and 5 pictures of their favorite places to wander on the Pinterest platform and tag them with “#Wandering Sole” for an opportunity for the most creative compilation to win a $1,000 shopping spree. The FTC believed each post (or “pin” in Pinterest lingo) of Cole Haan shoes was an endorsement of those products.  The FTC further believed the “#WanderingSole” hash tag did not communicate that contest entrants had a financial incentive – potentially winning – to endorse the shoes through their pins and the overall compilation of photos they prepared. That financial incentive is a “material connection” that has to be disclosed according to the FTC’s letter to Cole Haan. While that letter does not tell what hash tag may better disclose such a material connection, consider at a minimum using “contest” or “sweepstakes” as part of a hash tag disclosure, as in “#WanderingSoleContest.”