NAD Approves of Using Promotions to Solicit Facebook "Likes" and Recommends that "Free Claim" Be Modified

In response to a challenge by 1-800 Contacts, Inc., the National Advertising Division ("NAD") of the Council of Better Business Bureaus has recommended that Coastal Contacts, Inc. discontinue an "up to 70 percent" savings claim and modify advertising that promoted "free" products so that the material terms are clearly and conspicuously disclosed at the outset of the offer. Perhaps more importantly, NAD ruled that marketers can legitimately entice consumers into "liking" pages on Facebook by offering discounts, promotions or free merchandise without triggering social media endorsement requirements.

NAD also determined that since actual consumers "liked" the Coastal Facebook page, and those consumers who participated in the like-gated promotion received the benefit of the promotion, Coastal does have the general social endorsement that the "likes" convey; however, the NAD recommended that Coastal clarify that the number of Facebook "fans" or "likes" noted in their press releases is based on the total number of "fans" or "likes" Coastal has received from all of its Facebook pages globally.

Moreover, because the information regarding additional terms and conditions that applied to the offer of "free" merchandise did not appear until after consumers entered the promotion by "liking" Coastal's Facebook page, NAD recommended that Coastal provide a clear and conspicuous explanation of the additional terms and conditions that apply to any promotional offer of "free" merchandise at the outset in the future.

Take away: While the ruling is a positive one for marketers relying on social media promotions to develop brand awareness and consumer interaction, marketers still need to be sure that they also consider the standard rules of disclosure. In addition, marketers need to be careful that consumer interaction is not still overstated as an endorsement.

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