Lord & Taylor in hot water over Instagram ads

Lord & Taylor paid 50 Instagram influencers to post photos of themselves on the same weekend in March 15 all wearing the same dress. The issue with this is, the department store chain failed to flag the paid Instagram endorsements as advertisements.

The U.S. trade regulator said Lord & Taylor failed to disclose the dresses were also provided for free and they paid each person thousands of dollars. Lord & Taylor denied they did anything wrong.

As part of the settlement in the case, they have agreed that in the future they will disclose if any influencers they use in the future have been paid. This case is the first of its kind since the FTC published guidelines for native advertising last year.

According to the regulators, the paid for Instagram posts reached 11.4 million users over two days and led to their paisley asymmetrical dress selling out. Although the influencers were allowed to style the dress anyway they chose, they had to tag Lord & Taylor's Instagram account in their post, and use the hashtags they provided. The FTC said the company also pre-approved each post.

Lord & Taylor finds themselves in controversy after failing to flag Instagram posts as endorsements

Lord & Taylor also did not require the influencers to disclose the company had compensated them to post the photo, and none of the posts included such a disclosure. While the FTC can impose a penalty of up to 16,000 dollars for these types of violations, Lord & Taylor has not been fined.

In a statement, Lord & Taylor said: "We are deeply committed to our customers and we never sought to deceive them in any way, nor would we ever. In the FTC's consent order announced today, there is no finding of wrongdoing whatsoever. A year ago, when it came to our attention that there were potential issues with how the influencers posted about a dress in this campaign, we took immediate action with the social media agencies that were supporting us on it to ensure that clear disclosures were made. We cooperated fully with the FTC's inquiry into the marketing of this dress and have of course agreed to uphold the current version of the guidelines. The FTC has changed its guidelines since last year and we applaud the new guidelines that clarify the rules. Further, we encourage the FTC to continue to update and communicate their guidelines clearly and swiftly as the digital and social media landscape rapidly evolves. We remain dedicated to our core values of transparency and honesty in everything that we do for our customers."

 

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