Lord & Taylor has learned the hard way how to legally market through native ads. Last March, the retailer gifted a dress to 50 influencers and compensated them between $1,000-$4,000 to create posts with approved captions. However, none disclosed it was sponsored content. According to FTC guidelines, native ads must “make it clear that there is a relationship and that these are not independent views.” Lord & Taylor has since taken “immediate action” by adjusting all captions, and is settling with the FTC for an undisclosed amount. Despite the controversy, the sponsored posts reached 11.4 million Instagram users and the dress sold out. (Refinery29)
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