Page 6 - Fashion Law

S6 | MONDAY, SEPTEMBER 12, 2016 | Fashion Law
| NYLJ.COM
FTC Cracks Down On In uencer Advertising
On Social Media
post 55,000 times a year.”4 Frederic de Narp, CEO of Swiss shoe maker Bally, takes this idea further. “One client needs to be reached out to by the same brand on different devices and with different contents. This is what we call ATAWAD: AnyTime, AnyWhere, AnyDevice,” said de Narp.5
“In today’s society, 50 percent of the in- store sales are in uenced by digital inter- actions and up to 35 percent of the fashion consumers rely on recommendations from social networks,” said Daniel Grieder, CEO of Tommy Hilfiger.6 Facebook, Instagram, Snapchat, and Twitter, to name a few of the most popular social media platforms, con- tinue to prove to be an unparalleled source of new, interactive content that resonates. PwC’s 2016 Total Retail Survey also supports this claim, with 84 percent of those surveyed reporting that their online purchasing had been in uenced by social media in 2015, up 12 percent from 2014.7
It is then the personal style bloggers, or in uencers, with their talent for self-promo- tion across these platforms, who amass thou- sands and sometimes millions of followers. “They [bloggers] are savvy marketers ... If you look at number of Instagram followers they have it’s more than most retailers. And they don’t have the marketing budgets of large retailers,” said Lee Anne Grant, vice presi- dent of business development at ShopStyle, a shopping search engine.8 The in uencer’s command of meaningful compensation for their endorsement is gleaned from the sta- tistical proof that Millennial consumers are more likely to be captured by a brand pro- moted by such an in uencer. According to industry insiders, “the highest echelon of earners” can reportedly rake in $35,000 to $70,000 each month.9 No longer are the Tavis being reduced to “devotees blogging from her local Starbucks”; they are full- edged brands with followings large enough to sustain highly lucrative careers.
Fashion bloggers originated as trusted sources of organic content outside the scope of the traditional media, which can be in uenced by the almighty advertiser dol- lar. “Some bloggers who mention products in their posts have no connection to the mar- keters of those products—they don’t receive anything for their reviews or get a commis- sion. They simply recommend those prod- ucts to their readers because they believe in them,” writes the Federal Trade Comission.10 As the fashion industry then moves marketing dollars to these non-traditional platforms at great expense, so increases the dif culty in discerning between organic commentary and paid advertising. Navigating the unchartered waters of this “sea of change for the industry” has even run some aground.
In March 2015, Lord & Taylor, the old- est luxury department store in the United States, launched what they called a “product bomb,” an aggressive social media campaign to promote their new private label clothing line, Design Lab. Lord & Taylor handpicked 50 personal style bloggers, each “recruited for their fashion style and extensive base of followers on social media platforms,” and contracted for a modest fee between $1,000 and $4,000. The weekend of March 27-28, 2015, these in uencers were to take to Instagram and post pictures of themselves wearing the
BY GIOVANNI E. SPINELLI AND DANIELLE J. SCHIVEK
‘A
reporter from the second row of a Christian Dior haute couture show in March 2010. Who was Tavi, and how did she secure such envi- able real estate at the expense of a reporter working for an established women’s publi- cation, at an event where the seating chart had no doubt been so endlessly scrutinized? Tavi Gevinson, the teenage fashion blogger behind Style Rookie, had rocked the fashion hierarchy.
In 2010, when fashions were typically “selected for you by the people in this room,”
GIOVANNI E. SPINELLI is the managing partner of Pavia & Harcourt. DANIELLE J. SCHIVEK is an associ- ate of the rm.
or so claimed Meryl Streep’s Miranda Priestly in 2006’s The Devil Wears Prada, it was expect- ed that industry insiders were the curators of fashion, not some devotee blogging from her local Starbucks. While Miss Gevinson might have then been known as just a fashion blog- ger, she has since been twice named one of Forbes “30 under 30” in Media in both 2011 and 2010, and one of “The 25 Most In uential Teens” by Time magazine in 2014. What the fashion house of Christian Dior recognized, and almost all brands exploit today, is the undeniable power of the in uencers.
Despite her age, Gevinson belongs to a particularly sought after class of consumers. The Millennial generation, born between the early 1980s and early 2000s, account for a respectable 80 million Americans, and by 2035 Millennials will have the potential to become the largest spending generation in history.1 However, Millennials succeed to be the future of the fashion industry with one major caveat ... They are deliberately
resistant to traditional advertising. PwC’s 2016 Total Retail Survey supports this claim given that of the 23,000 consumers from 25 countries surveyed, just 30 percent said that traditional advertising had in uenced their
2 online purchasing in 2015.
If Millennials are indeed the future, then fashion brands must rise to the challenge of evolving in a way that engages this core audi- ence. So, “How can you leverage your foot- print to your great advantage? How do you make the overall experience seamless across channels and appealing to the consumers?” asks Shyam Gidumal, principal and northeast consumer products and retail market segment leader at consultancy EY.3 For many, like Swiss watchmaker, IWC, the answer is to leverage engagement on digital channels in order to reach a younger clientele. Georges Kern, CEO of IWC said that, “Today, you have to become an entertainment company. You create con- tent digitally on all your content areas every day all the time. We have calculated that we
t Dior. Not ... pleased to be watching couture through 13 year old Tavi’s hat,” famously tweeted a Grazia
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