Disclosing Material Connections: Goose Creek’s Disclosures Did Not Hold a Candle to the FTC’s Endorsement Guides

In a recent NAD challenge, Bath & Body Works called its competitor Goose Creek to task for—among other alleged false advertising—deceptive use of endorsements. The case involved videos of purportedly “real” consumer endorsers. Contrary to appearances, the challenger noted, these people were in fact paid actors. B&BW also took issue with Goose Creek’s failure to disclose its material connection to a vlogger, @The Candle Channel, who reviews Goose Creek’s candles.

NAD relied—to no one’s surprise—on the FTC’s Guides Concerning Use of Endorsement and Testimonials in Advertising (Guides). The Guides provide that “if there is a material connection between an endorser and the marketer that a consumer would not expect and it would affect how they evaluate the endorsement, that connection should be disclosed clearly and conspicuously.”

Goose Creek responded by assuring NAD that it had, indeed, disclosed its material connections to its endorsers. Goose Creek relied on the standard YouTube disclaimers: “includes paid promotion” and “some videos may contain paid endorsements, paid promotions or paid performance by actors.”

Case closed, then? Not so fast.

NAD’s concern was not just whether the material connection was disclosed—but how. NAD concluded that neither of Goose Creek’s YouTube disclosures were sufficient under the Guides because they were not clear and conspicuous. Specifically, NAD noted that Goose Creek’s complete disclosure was only visible by clicking on a “see more” hyperlink. It also lamented that the blanket disclosure (“some videos may contain paid endorsements”) failed to indicate which specific videos contained which type of endorsements.

NAD therefore recommended that these videos be modified to clearly and conspicuously disclose (in both audio and video) the fact that actors have been employed in the videos. It also recommended that Goose Creek make sufficient disclosures of its material connection to @The Candle Channel.

NAD’s Goose Creek decision serves an important reminder: when disclosing material connections, consider prominence, clarity, and specificity.