The Federal Trade Commission recently settled with skincare startup Sunday Riley Skincare and its CEO Sunday Riley over allegations that Sunday Riley (both the person and the company) instructed employees to create fake identities and submit fake reviews of Sunday Riley products. The fake reviews violated the FTC Act in at least two ways: 1) making false or misleading claims that the fake reviews reflected the opinions of ordinary users of the products; and 2) deceptively failing to disclose that the reviews were written by Ms. Riley or her employees.
For those of you who weren’t English majors, the title of this post comes from English Romantic poet, John Keats, who wrote “Beauty is truth, truth beauty”. I honestly don’t remember most of the poem,[1] or what it meant, or why it was significant (sorry, Mrs. Uhl), but what I do know is that the English Romantics had great branding and marketing, albeit 19th century style. We remember them as brilliant and doomed, and revere their work, but the truth is that most of them were privileged, creative, restless young people with too much money and time (Byron was a titled Lord, Shelley was a trust fund kid, and though Keats wasn’t wealthy, he had it way better than most 19th century English residents.) The opportunity to romanticize and revise your story is a byproduct of fame and success, even today (*cough cough*Mark Zuckerberg*), but going too far from the truth in your marketing strategy will get you in trouble.
Even if you aren’t instructing your employees to create fake accounts and use VPNs to mask their identities, you may be creating risk if your employees enthusiastically review your products without disclosing that they are employees. That’s because a consumer review is supposed to be an honest, unbiased opinion so that your average person reading it can rely on it as a real, truthful review.[2] Similarly, if you provide free products, a paycheck, or any other benefit to a social media marketer in exchange for a review, you must require that marketer disclose clearly that they received something in exchange for their review. When an influencer fails to disclose the relationship with the advertiser, the advertiser is subject to FTC sanctions.
Today’s creative entrepreneurs market their reputations and promote their products through online advertising, word-of-mouth, and social media, but they would still do well to remember the advice “Beauty is truth, truth beauty.” While it’s less likely that tuberculosis will tank your business, running afoul of the Federal Trade Commission’s regulations preventing “deceptive practices” might. The FTC’s website is actually a great resource for information and guidelines about what you can and can’t do when advertising and marketing online. And a simple thing to keep in mind when promoting your company or product “Beauty is truth, truth beauty,—that is all ye know on earth, and all ye need to know."
[1] “Ode on a Grecian Urn” (I googled it.)
[2] See Example 8 in the linked document as well as the “General considerations” section.
