Instagram has emerged as one of the hottest social media platforms for connecting with consumers. Businesses frequently host Instagram photo sweepstakes and contests, using hashtags as word of mouth marketing and to organize submissions. While Instagram’s Help Center describes how to host a photo campaign, the brand must ensure any prize promotion’s legality, per Instagram’s “Promotion Guidelines.” Here are some legal issues to consider when organizing an Instagram photo campaign.
- Sweepstakes or Contest?: Sweepstakes and contests are not the same. Chance governs the outcome of legal sweepstakes; skill determines who wins in a contest. In the context of Instagram, brands need to consider marketing goals and legal risk in choosing the format of their campaign. A contest gives a brand the opportunity to reward outstanding content and even create a brand evangelist in the process. A sweepstakes, on the other hand, may be more appropriate to promote brand awareness. From a legal perspective, a contest must have judging criteria for selecting winners, but it also avoids the sticky issue of whether text message charging can be deemed consideration. In a true skill contest, with the exception of a small number of states, there is no risk associated with the consumer’s having to pay those charges or go to the effort to create their photos. In a sweepstakes, however, all states require an absence of consideration. Each brand must decide whether to incorporate an alternate free method of entry, a step that may not meet marketing goals.
- Don’t forget rules: Regardless of the format of the campaign, it should be accompanied by rules. Many brands ignore this step because of their brevity of their campaigns, but not only are they in violation of Instagram’s Promotion Guidelines, they are also violating many states’ laws that require multiple disclosures in connection with any sweepstakes or contest. Rules need to explain, among other things, any purchase requirements (none allowed in sweepstakes), how to enter, start and end dates/times, eligibility, geographic limitations, prize details, winner notification procedures, etc.
- Protect the Brand: The rules also are an opportunity to protect the brand from any one of a number of problems, ranging from fr3aud to technical difficulties to prize fulfillment issues. As in any sweepstakes or contest, an Instagram photo campaign’s rules represent a contract with the consumer and provide the brand a chance to anticipate disagreements with contract provisions and safeguard the brand’s assets with dispute resolution procedures. Furthermore, the rules should explain the mechanics of using Instagram accounts for entrants, explaining that they may incur text messaging or data charges, even if the promotion includes a free alternate method of entry.
- Copyright and Other User Generated Content Concerns: When accepting photos as part of an Instagram photo campaign, it is essential that the rules spell out clearly what kinds of photos they will not accept. For instance, the rules should ensure that the photos are original and do not infringe any third party rights, including rights of privacy and publicity. In addition, the brand may want to establish its right to eliminate certain kinds of entries, including ones that oppose the brand’s message, are obscene, distasteful, discriminatory, or promote unsafe or unlawful behavior. Finally, the sponsor should consider whether it wishes to own the copyrights in entries or at least winning entries. This decision is tied to long-range marketing plans. Even the brand does not want to own the copyrights, it certainly needs a license to use the entries, and that should be enunciated in the rules.
- FTC Endorsement Concerns: As in any prize promotion, brands must comply with the FTC Endorsement & Testimonial Guides. (For a more detailed discussion of these Guides, click here.) In the context of Instagram, their applicability is a bit murky. The guides require disclosure of any material connection between the brand and an endorser. So the first inquiry is whether by promoting the brand with a required hashtag, the consumer is acting as an endorser. We have no statement from the FTC on this issue, but there are good arguments that the public can discriminate between a true endorser and a consumer merely acting on the hopes of receiving a prize. In addition, in a sweepstakes situation, even if the consumer is an endorser, does the fact that the consumer receives a sweepstakes entry in exchange for using the hashtag require a disclosure? In the FTC’s settlement with Ann Taylor in 2010, it indicated that a sweepstakes entry in exchange for a social media mention could be considered a material connection requiring disclosure. In that case, however, the mention was in blog form where there is more potential for damage to the public for relying on a blog’s recommendation. That danger is substantially less with an Instagram photo sweepstakes campaign. Certainly, the concern with material connection dissipates further if running an Instagram photo contest rather than sweepstakes. In short, the applicability of the FTC’s Endorsement & Testimonial Guides to an Instagram photo contest is not settled law, and brands should appreciate and accept any risk by not complying.
- Disclosing Rules: Certainly, Instagram hashtag photo campaigns are space-constrained, like much else on social media. Marketers need to plan how they will disclose the rules so they can comply with the FTC’s DotCom Disclosure Guides (discussed in more detail here). These guides warn that if a marketer cannot comply, they should drop the marketing initiative. Marketers need to leave themselves sufficient time to explore the myriad options for creating their disclosures in advance of the campaign’s start date. Franchisors who are offering the campaign to franchisees need to create best practices for appropriate disclosures.
- Hashtag Problems: Hashtags can function as trademarks. For Instagram campaigns that have duration and may be tied to other platforms, marketers should consider clearing their hashtags with their trademark attorneys. They may even wish to seek protection of them with registrations. In addition, be aware that the public can hijack hashtags and take them in whatever direction they wish, making it more essential that the rules provide protection against entries that have the potential to create public relations’ nightmares for the brand.
© Kyle-Beth Hilfer, P.C. 2013
DISCLOSURE: This article does not constitute legal advice. If you have legal questions about running a photo campaign sweepstakes or contest on Instagram, please contact this post’s author or another attorney.
Image courtesy of FreeDigitalPhotos.net