Casper influencers move mattresses, but the IPO filing says they're not all sweet dreams

Online mattress seller Casper Sleep filed for an initial public offering with an unusual warning for potential investors: It uses influencers for marketing.

Influencers, people with large online followings whom Casper pays to test and talk about its mattresses, “may materially and adversely affect our reputation or subject us to fines or other penalties,” the company said in a prospectus on Friday.

Because Casper derives the majority of its sales from internet marketing, it relies on influencers on Instagram and YouTube to spread the word about its products. But influencers are often marketing amateurs, posting without a brand’s direct approval over their work. They may fail to properly disclose payment for a post—a lapse that has caused the U.S. Federal Trade Commission to fine other brands in the past. Or they may post unsavory or controversial content that will reflect poorly on the brand.

In a quick scan of posts that tag Casper on Instagram, some look like typical mattress ads, with influencers sitting on the memory foam or posing by the delivery box and smiling, sometimes holding their babies or dogs. In one post marked as an ad, a woman is wearing revealing lace undergarments, pictured from behind. In another post, which tags and promotes the brand but is not marked as an ad, a man’s bare backside is featured next to a Casper box.

Casper isn’t the first to mention influencer marketing in its IPO prospectus, but may be the first to specifically highlight influencers as a risk factor for investors. Peloton Interactive, which makes exercise bikes and went public in September, noted the increased burden of monitoring compliance for ads across media, including social networks. The maker of Madewell clothing, which filed for an IPO last year, called influencer marketing “experimental” in its prospectus and warned that it might not be able to maintain buzz around its products, or might have to increase its level of spending.