Revolve Group, Inc., a popular online fashion retailer, is facing a lawsuit that has brought its influencer marketing practices under the spotlight. The case alleges that Revolve engaged in deceptive advertising by failing to ensure proper disclosure of material connections between the brand and influencers promoting its products. This lawsuit follows earlier recommendations from the National Advertising Division (NAD) that had already flagged concerns about Revolve's social media disclosures.

The Allegations

The lawsuit claims that Revolve's influencer marketing strategy violates consumer protection laws by misleading consumers about the nature of endorsements. Specifically, it accuses Revolve of not adequately disclosing the financial or material relationships influencers have with the brand. Posts in Revolve's “cost-effective” influencer network may tag the brand, but don't actually disclose the paid relationship. These undisclosed connections, the suit alleges, could lead consumers to believe that influencer endorsements are genuine and unbiased, rather than part of a paid or incentivized partnership.

NAD's Recommendations

Earlier this year, NAD, a self-regulatory body for the advertising industry, reviewed Revolve's practices as part of its routine monitoring program. NAD found that some influencers working with Revolve failed to clearly disclose their material connections to the brand. For example, posts tagged with "#giftedbyrevolve" were deemed insufficiently clear, as the phrasing could confuse consumers. NAD recommended that Revolve take steps to ensure that disclosures are clear, conspicuous, and compliant with the Federal Trade Commission (FTC) Endorsement Guides.

Revolve responded to NAD's recommendations by committing to increased monitoring of influencer posts and updating its Brand Ambassador Guidelines and Checkout Terms. However, the current lawsuit suggests that these measures may not have been enough to address the underlying issues.

Lessons for Brands

The case against Revolve serves as a cautionary tale for brands relying on influencer marketing. To avoid similar legal challenges, companies should:

Ensure Clear Disclosures: It bears repeating – influencers must clearly and conspicuously disclose their material connections to the brand. This includes using straightforward language like "Sponsored by [Brand]" or "Paid Partnership with [Brand]."

Monitor Compliance: Brands should actively monitor influencer posts to ensure compliance with disclosure guidelines. This includes providing training and resources to influencers on proper disclosure practices.

Consult Regulatory Guidelines: Brands should familiarize themselves with the FTC Endorsement Guides and NAD recommendations to stay ahead of compliance requirements.

Adopt Transparent Policies: Brands should develop and enforce clear policies for influencer partnerships, including contractual obligations for proper disclosures.

Given that this is the third class action brought by the same firm related to influencer marketing in recent months, it's clear that transparency and ethical practices will be key to both maintaining consumer trust and avoiding legal pitfalls. The plaintiffs' bar is watching, so businesses should ensure that they are too.