Watchdog calls out Norwalk giant for stealth endorsements
A Connecticut-based watchdog group filed a complaint against Diageo, claiming the liquor giant is relying on stealth “influencers” on social media to get people to try its Ciroc brand of vodka and brandy.
Truth in Advertising is appealing to the Federal Trade Commission to intercede, with TINA arguing Diageo is violating rules designed to prevent deceptive marketing and that it is increasing the risk of tempting underage drinkers to try Ciroc.
On an annual budget of more than $1 million as reported to the Internal Revenue Service, the Madison-based TINA has taken on several powerful brands in addition to Diageo in the past few years, including Walmart over “made in the USA” claims, as well as Warner Brothers, Gillette and the celebrity Kardashian clan.
Diageo has its North American headquarters in Norwalk as one of the largest alcohol companies worldwide with brands like Bulleit, Captain Morgan, Guinness and Johnnie Walker. The company has been working to return its vodka segment to growth in North America, with Ciroc and Ketel One outperforming their fellow Diageo label Smirnoff in the first half of 2018.
Under FTC guidelines on endorsements, individuals must disclose any business relationships or recompense in exchange for promoting a product. TINA points to more than 1,700 Instagram posts from 50 different individuals promoting Ciroc, including the hip-hop star Sean Combs who uses a number of names including Diddy and Puff Daddy.
In a statement forwarded to Hearst Connecticut Media attributed to no single individual, Diageo indicated it is investigating the claim and that it has a strong commitment to comply with the FTC’s standards on advertising, with TINA noting earlier this year that Diageo had suspended Ciroc advertising on Snapchat on concerns about age verification requirements on the social media platform.
TINA had previously highlighted “influencer” marketing of Ciroc by DJ Khaled among other brands, stating that Diageo had indicated at the time it is committed to complying with the FTC’s guidelines on endorsement disclosures. In April, TINA stated Khaled appeared to have scaled back his promotion of alcohol on Snapchat and other social media channels.
“TINA.org’s sampling of undisclosed Ciroc ads makes clear that Diageo is not committed to complying with FTC law, and has not taken the corrective or proactive steps necessary to ensure that its social media influencers comply with the law,” TINAs executive director stated in a Dec. 10 letter to Andrew Smith, director of the FTC’s Bureau of Consumer Protection in Washington, D.C. “Social media influencer marketing may be a particularly effective and insidious way of advertising alcohol to minors ... because the goal of this type of marketing is to establish a genuine connection with the viewer by delivering ads that feel organic and authentic, and thereby are more likely to be trusted.”
Diageo has disclosed generally via press releases, social media posts and other channels its formal relationships with celebrity influencers, including Combs and Victoria’s Secret model Alessandra Ambrosio for Ciroc. Diageo’s campaign extends to bartenders and others with relative anonymity in the hospitality industry who otherwise wield influence with local patrons.
And the company has freely shared tips on how others can learn from its successes, including last month at the Social Media Week conference in London where Diageo has its headquarters.
Alex.Soule@scni.com; 203-842-2545; @casoulman