NAD recently reported that it referred advertising for The Coldest Water, LLC to the FTC after the advertiser failed to participate in NAD’s investigation.

NAD had opened a routine monitoring case about videos featuring the advertiser’s products posted on a popular social media platform.  The videos did not include any claims about the products – or even mentions by the (presumed) influencers  -- but they all included prominent display of the product so that the brand name and logo were visible. For example, in one video referred to in NAD’s Decision, the video showed a person discussing real estate advice with the product in front of her.  

Moreover, as NAD discovered by doing its homework about the company, Coldest Water runs a social media influencer program through which participants are sent free product in exchange for posting videos showcasing it.  NAD noted that products featured in social media “can earn significant visibility that can drive purchasing decisions” and that “systematically incentivizing influencers to feature a product in social media may drive additional visibility.”  However, none of the videos included a “material connection” disclosure.  Thus, NAD was concerned that the videos constituted endorsements that did not comply with the FTC Endorsement Guides.  Since Coldest Water did not respond to NAD’s request for information, NAD referred the matter to the FTC.

A few things worth noting from this short Decision:

  1. NAD is keeping its eye on social media and opening routine monitoring cases involving (presumably) incentivized disclosures.  
  2. NAD is spending time investigating company’s policies and practices outside the advertising itself. 
  3. Endorsements can come in all shapes and sizes and the visible presence of a product in a video may itself be considered an endorsement if posted by someone incentivized to post it.

Stay tuned for more from the FTC or NAD itself as a result of this referral.

NAD/CARU Case Reports, Report #7023.