Overview:
Underwear and loungewear maker Skims enlists major stars to squeeze promotional posts into their social media, but the NAD is tightly monitoring disclosures. How can advertising claim substantiation surveys protect brands from costly NAD challenges?
The Skims Skinny
The Federal Trade Commission (FTC) has mandated disclosure and compliance requirements for advertisers and social media influencers, detailed in the agency’s Endorsement Guides. Skims Body, Inc., a loungewear and underwear fashion brand founded by Kim Kardashian, found itself in a tight spot when the National Advertising Division of the Better Business Bureau assessed its advertising practices involving celebrity influencers Brittany Mahomes and Lana Del Rey.
As part of its ongoing monitoring, the NAD assessed whether the Skims-influencer collaborations complied with the FTC Endorsement Guides. The FTC Guides explain the agency’s rules for endorsements, which are intended to ensure that consumers are not misled about the nature of an endorsement, including in cases where influencers are paid to promote products. Like many brands, Skims pays influencers based on audience size, engagement, and the type of content they create. Its specific budget is not public. However, according to a study by Influencer Marketing Hub, influencer marketing generally sees an average return on investment of $5.20 for every $1 spent. This high ROI is why so many brands invest in influencers–but the failure to properly disclose also comes at a high price.
Lana Del Rey
Lana Del Rey (born Elizabeth Woolridge Grant) is a critically acclaimed U.S. singer-songwriter and also has 20.8 million followers on the social media platform Instagram, making her a certified influencer. She made a series of Instagram posts in January of 2024, tagging Skims or mentioning the brand. Skims has a disclosure guide for influencers that includes posting instructions, and claimed to have taken steps to ensure Del Rey’s posts complied with FTC guidelines. However, the NAD found that while Del Rey tagged Skims, it was not materially disclosed that Skims sponsored the post. The NAD recommended Skims ensure that influencer posts include proper disclosures, including hashtag disclosures such as #ad or #sponsored.
Brittany Mahomes
Brittany Mahomes is an American sports team co-owner, former soccer player, the wife of Kansas City Chiefs quarterback Patrick Mahomes, and an Instagram influencer with over 2.1 million followers. Brittany Mahomes posted Instagram content in November of 2023 featuring herself and her family wearing Skims, and tagged the brand. These posts were styled like a fashion shoot, and Mahomes and Skims argued that consumers would assume they were sponsored. The NAD determined that tagging the brand alone cannot disclose the material connection, because disclosures must be clear and conspicuous, and that Skims must take steps to ensure that influencers adhere to disclosure guidance from the Endorsement Guides.
Skimming the Surface of Consumer Perception
The 5:1 ROI of influencer marketing makes it considerably more effective than traditional marketing, so it is likely not a passing phase in the marketing of consumer products. However, simply giving instructions to celebrities and influencers is not enough to ensure compliance and overcome regulatory challenges; marketers must closely manage the posting process. Before launching an influencer campaign, marketers can commission consumer surveys to measure whether disclosures are noticeable and clear for consumers. This protects the marketers in the event of a challenge like the one against Skims. Advertising substantiation claim surveys may also be used to measure whether claims in your marketing are misleading, or, where appropriate, supported by adequate evidence. This allows marketers to adjust their strategies before any risk of regulatory challenges. In the event of a challenge, a survey could also measure whether relevant consumers understood that the social media posts were paid sponsorships.
Even a massive brand like Skims, with mega-influencers like Lana Del Rey and Brittany Mahomes, can face scrutiny if its campaigns don’t comply with advertising law. Conducting survey research before launching a large-scale campaign ensures that, in the face of regulatory challenges, brands are protected. If you’d like to talk to MMR Strategy Group, an IMS Legal Strategies company, about substantiating your advertising claim–or conducting consumer surveys to support your position in litigation–contact us today.