NAD Decision Provides Guidance on Disclosures for Endorsements

NAD recently issued a decision in a challenge that Bath & Body Works (or B&BW”) brought against Goose Creek that touches upon a number of common issues advertisers face. The decision covers a lot of ground, and yesterday we focused on issues related to comparative claims against unnamed competitors. In this post, we’re going to focus on a few issues related to disclosures for endorsements.

B&BW challenged videos on Goose Creek’s website and social media channels which featured blindfolded people who smelled and commented on Goose Creek and competitor candles. B&BW argued that although the people in the videos were paid actors, viewers were likely to believe that they were actual consumers, with no connection to the company. NAD agreed that this was a likely interpretation.

Goose Creek argued that it clearly disclosed that some of the people in the videos were endorsers. For example, a banner accompanying some videos disclosed that the video includes paid promotion.” And a disclosure on the company’s YouTube page further states that some videos may contain paid endorsements, paid promotions, or paid performance by actors.”

NAD concluded that Goose Creek’s disclosures were not sufficient for a number of reasons. For example, the banner stating includes paid promotion” does not adequately disclose that the individuals featured are actors and not real consumers.” Moreover, the disclosure that some videos may contain paid endorsements, paid promotions, or paid performance by actors” also fails because it doesn’t indicate which specific videos contain which type of endorsement.”

NAD recommended that any Goose Creek videos, ads, marketing emails, or social media posts featuring actors portraying consumers be modified to clearly and conspicuously disclose in both audio and video the fact that actors have been employed in the videos.”

NAD also considered videos posted by a vlogger who reviewed Goose Creek candles. Although, the vlogger is currently a designer for Goose Creek, none of the videos disclose a connection between the parties. NAD recommended that Goose Creek instruct the vlogger to modify any video created after the date of employment with Goose Creek to include a material connection disclosure that is clear and conspicuous in audio and video, keeping in mind that clear and conspicuous means unavoidable or difficult to miss.”

This analysis is generally consistent with previous NAD precedent and themes in the current version of the FTC’s Endorsement Guides, so there aren’t any surprises here. Still, this case serves as an important reminder that companies don’t just have to worry about the FTC examining their compliance with the Endorsement Guides – competitors may do the same, and they may turn to NAD for help.