Department store chain Lord & Taylor is one of many companies to come under attack for the increasing prevalence of “native advertising,” or paid ads that are passed off as editorial content. The company has settled charges with the Federal Trade Commission that it used deceptive marketing with its paid advertising on Instagram.
The FTC’s complaint arose from allegations that Lord & Taylor partnered with fashion bloggers to promote a specific clothing line without making it clear that the posts were paid advertisements.
“Lord & Taylor paid 50 ‘fashion influencers’ up to $4,000 each to post a photo of themselves wearing a flowing, paisley dress from the company’s Design Lab collection but did not require the bloggers to say in the post that it was an ad,” the FTC says.
The settlement is the latest in the FTC’s crackdown on deceptive marketing, as social media continues to be a murky area of paid advertising not being disclosed as advertising. Sony settled similar charges with the FTC when they had their own employees tweet about features of the Playstation Vita console without disclosing their connection to the company. Similarly, Machinima, a video game magazine, settled with the FTC after paying “influencers” to post YouTube videos endorsing Microsoft’s Xbox One without disclosing they were being paid for their opinions.
Lord & Taylor claims it responded immediately when it was discovered there was an issue and has been fully cooperative with the FTC.[via USAToday]