WOMMA and the Better Business Bureau Webinar Series Session 2: Striking the Balance Between Legal and Marketing

WOMMAand the Better Business Bureauare proud to present a three part webinar series:Compliant & Successful:Aligning Marketing & Legal Around Word of Mouth & Social Media Marketing

Featuring Today’s Topic: Striking the Balance Between Legal and Marketing: What you Need to Know to Exceed Expectations In This Evolving Landscape
Tony DiResta Partner in AdvertisingMarketing & Media, Manatt, Phelps & Phillips, LLP  WOMMA General Counsel
Pete Blackshaw EVP of Digital Strategic Services
NM Incite a Nielsen/McKinsey Company
Paul Rand President and CEO
Zócalo Group
President, WOMMA

Today’s Discussion
Articulate the inherent tensions between legal and marketing
Summarize the FTC Guidelines
Highlight the importance to legal and marketing of “listening”
Dramatize the Good, the Bad and the Ugly
Introduce WOMMA’s best practices Guidelines
Share resources and how to get involved
Answer questions

The New Realities
A new era of always-on real time
Real challenges for “claims review” cycles
Risks factors aggravated by WOM/social media
Bad news can quickly get out of control
Harder to hide behind legalese
New expectations of transparency, user-friendliness
Govt/Regulators increasingly “priming” their ears
Active listening to conversation by government departments
HHS has over 40 “tweeters”

Challenges in the Legal/Marketing Relationship
Marketers assume legal is….
-- too slow and conservative
-- out of touch with new market realities
-- rarely proactive
-- has a bias toward the familiar (e.g. TV, Print)
Legal assumes marketers….
Don’t fully consider risk factors
Take more liberties with claims
Put the brand/corporation at risk
Have no clue what they are doing in WOM/Social Media

The Bottom Line
Communications through social media is regulated and subject to traditional legal concepts found in the law of communications— even though companies have no control over the messages of their agents or representatives.

The FTC’s Guide in Review Key Concepts
In 2007, the FTC began the process of reviewing its “Guides Concerning the Use of Endorsements and Testimonials in Advertising”– Not revised since 1980, when they were issued
FTC recognizes the role of self-regulation on “new” social media platforms, but notes that it must be backed up with enforcement–The updated Guide went into effect December 1, 2009
Only “sponsored” communications are subject to regulation and transparent disclosure is required for “material connections”
There is potential liability for advertisers, advertising agencies, and endorsers for misleading and unsubstantiated statements made by the endorser
Don’t look at the FTC Guides in isolation– they have legal implications in other contexts

Understanding the GuideWhat is an Endorsement?
Any advertising message that consumers are likely to believe reflects personal opinions, beliefs, findings, or experiences of a person or organization other than the sponsoring advertiser
Endorsements include:
Verbal statements
Demonstrations
Depictions of the name, signature, likeness or other identifying personal characteristics of an individual
The name or seal of an organization
Endorsements do not include:
Fictional dramatization of a real life situation
Statements by an identified company spokesperson

Understanding the GuideWork with an Endorsement
Must reflect the honest opinions, findings, beliefs, or experience of the endorser
May not convey any express or implied representation that would be deceptive if made directly by the advertiser
Advertisers are subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose material connections between themselves and their endorsers
Endorsers also may be liable for false or misleading statements made in the course of their endorsements

Understanding the GuideDisclosure of Material Connections
The Guides require the disclosure of any “material connection” between the advertiser/seller and its endorser
A “material connection” is information that could impact the weight or credibility a consumer gives to the endorsement
Disclosure must be clear and prominent
Language should be easily understood and unambiguous
Placement must be easily viewed and appear in a readable and noticeable font size/color
Types of “material connections”
Consideration given to a speaker or blogger by an advertiser in the form of benefits or incentives (e.g., cash; free products; prizes; special access privileges)
Relationship between the advertiser and speaker (e.g., employment)

Understanding the GuideLiability Issues
All stakeholders – whether advertisers, brands/companies, ad agencies, and bloggers or other agents – are liable for:
Their failure to disclose “material connections” and
The speaker’s making unsubstantiated claims about the products/services of the advertiser or brand
FTC now mandates that advertisers and brands develop policies that:
Educate their agents/endorsers about their responsibilities; and
Monitor the communications/statements/claims by their agents/endorsers.

Listening More Important Than Ever
Smart listening tools and practices can influence the right/ethical practices & choices
For legal and marketing, helps cuts through the fog
Good news: most online conversation leaves an unmistakable digital trail
Great reference point to see how you are doing (or not), plus peer benchmarks
Elevates complexity re: reporting in certain categories (e.g. pharma)
No shortage of services (even “free” entry points) to aide listening process

Listening Cuts Through the Fog
Text-mining analysis of consumer conversation around the word “advertising”
13

Smart Listening Can Pinpoint High-Sensitivity Areas
2009 BBB “Issue” Rankings
What happens if WOM/social media practices are viewed as yet another variation of over-selling?
14
Source: Better Business Bureau. Percent of Aggregated Top 12 Issue Topics

Case Studies:The Good, The Bad, and The Ugly
Example 1Using Social Media to Sway Opinion

Using Social Media to Sway Opinion:The Ugly
Infomercial star Kevin Trudeau tried to get out of a civil contempt proceeding by asking his supporters to e-mail the court and explain how he changed their lives for the better.
His supporters sent more than 300 e-mails, filling the in-box and crashing the computer of Chicago federal judge Robert Gettleman.
Judge held Trudeau in criminal contempt with 30 days in jail and $5,000 fine.

Using Social Media to Sway Opinion:The Good
“Give Me My Chuck” Campaign
The TV Blog “Give Me My Remote” rebranded itself as “Give Me My Chuck.”
Fans of the show started using the hashtag #savechuck on Twitter and customizing their profile backgrounds with images supporting the campaign.
Fans also purchased $5 footlong subs from Subway – a major sponsor of the show – on the day of the season finale.
Ben Silverman, co-chairman of NBC Entertainment, told TV Guide he found the campaign amazing.
Chuck was renewed for a third season.

Using Social Media to Sway Opinion:The Ugly
Domino's employees “creatively” prepare the food and put it on YouTube.
Kristy and Michael got themselves fired, and quite possibly sued, by doing unsanitary things to customers' orders on camera while their manager sits in the back reading the newspaper.

Using Social Media to Sway Opinion:The Good
Best Buy encouraged employees to handle online customer service and company promotions via Twitter.
Aired commercials not mentioning their own Web site but merely the Twitter URL for Twelpforce.
Employees respond to customer service questions and suggest products if, for example, someone tweets about wanting to buy a new TV.

Case Studies:The Good, The Bad, and The Ugly
Lessons Learned
Companies must have a social media policy setting for the core standards identified above.
Educate employees on what they can and cannot say as representatives of the company; have a procedure to confirm their understanding; and monitor their communications.
You must be prepared to hear how people feel about your products.
Sometimes less is more.
Consider “advertising” as “engagement.” Have a dialogue; don’t just aggregate what consumers are saying about your products.
Have the ability to edit comments – not necessarily so nothing negative about your products is posted, but so the dialogue remains constructive and audience-friendly (i.e., nothing profane, inappropriate or obscene).
Have a plan in place for damage control.

Looking ForwardThe Role of Marketers
Educate “bloggers” regarding responsibilities
Educate internal corporate audiences regarding responsibilities:
Create a “culture of compliance”
Require disclosure from “bloggers”
“If you choose to review or share this product please be sure to disclose that it was provided to you by the company.”
Monitor to ensure disclosure is happening
Remind those who “forget” to disclose
Determine “cut off” policy for those who do not comply

Looking ForwardThe Role of Bloggers
“Blogger” responsibilities:
Confirm understanding of responsibilities with marketers
Disclose all material connections on relevant platforms
Communicate proactively with marketer to demonstrate compliance

Best PracticesBlog Disclosure
Personal and EditorialBlogs
Disclose any product, service or compensation provided by a marketer
Disclosure requirement:
As part of editorial copy
“I received (product or sample) from (company name)
(Company name) sent me (product or name)

Best PracticesBlog Disclosure
Review blogDisclose any product, service or compensation provided by a marketer
Disclosure requirements: -- As part of editorial copy
“I received (X product or service) from (company X) to review”
“I was paid by (company X) to review”

Best PracticesReview Blogs:Disclosure & Relationships Section
WOMMA strongly recommends creating and prominently posting a “Disclosure and Relationships Statement” on review blogs to fully disclose how the blogger works with companies in accepting and reviewing products – and listing any conflicts of interest that may affect the credibility of their reviews.

Best PracticesComments in Online Discussions
I received (product or sample) from (company name)
I was paid by (company name)
I am an employee or representative of (company name)

Best Practices: Microblogs
Twitter
Must clearly state hash tag within tweet
#spon (sponsored)
#paid (paid)
#samp (sample)
Create link to “Disclosures and Relationships” section on profile

Best PracticesStatus Updates on Social Networks
Social networks:
Disclosure options:
As part of photo or video description (see photo and video sharing sites best practices)
As part of status update
“I received (X product or service) from (company X)
“I was paid by (company X)
Create “Disclosures and Relationships” section on profile

Best PracticesStatus Updates on Social Networks

Best PracticesVideo & Photo Sharing Sites
Video sharing sites
Disclosure options:
As part of video content
“I received (X product or service) from (company X) to review/create this video
“I was paid by (company X) to review/create this video”
As part of video description

Youtube user Jenergizer
“I was contacted by the people at Harajuku Lovers fragrance… they’ve asked me to hold a contest…I’ve created an e-mail address for the contest and the deadline is September 21st to send me 5 pictures of you and your friends that resemble the individual Harajuku dolls.”

Best PracticesVideo & Photo Sharing Sites
Photo sharing sites
As part of photo description
“I received (X product or service) from (company X) to create this
“I was paid by (company X) to create this”

Best PracticesPodcasts
Include as part of the audio content and part of the written description
“I received (product or sample) from (company name)”
“I was paid by (company name)”

“…before we start I just wanted to let everyone know that today’s episode is sponsored by Tim Grace of Apartments.com”
Episode 11:Apartment Marketing gone digital

Tony DiResta Partner in AdvertisingMarketing & Media, Manatt, Phelps & Phillips, LLP  WOMMA General CounselADiResta@manatt.com
Pete Blackshaw EVP of Digital Strategic Services
NM Incite a Nielsen/McKinsey CompanyPete.Blackshaw@nielsen.com
Paul Rand President and CEO
Zócalo Group
President, WOMMAprand@zocalogroup.com
Visit WOMMA online at www.WOMMA.orgVisit the BBB online at www.BBB.org

WOMMA Brands Council
Community: For Brands, By Brands.The WOMMA Brands Council is a learning community where marketers from Brands and Non-Profits share best practice advice on how to use Word of Mouth and Social Media marketing more effectively. Through exclusive webinars and conference calls, the WOMMA Brands Council helps marketers learn what’s working today. Participants discuss and become smarter about core issues facing brand marketers, including: marketing mix integration, measurement, ROI, ethics, and selling programs inside the company.
For membership inquiries or to participate on the Brands Council:
Gary Spangler, Brands Council Leader/WOMMA Board of Directors
eMarketing Manager, DuPont, Gary.spangler@usa.dupont.com
Tarah Remington Brown, Membership Director
Tarah@WOMMA.org
312-853-4400 x. 205
http://WOMMA.org/BrandsCouncil

WOMMA Brands Council
http://WOMMA.org/BrandsCouncil

CBBB Corporate Partnership
Support Self-Regulation by Becoming a Corporate PartnerNational Corporate Partners of the BBB have a core belief and value that trust in the marketplace is essential for the marketplace to flourish. Becoming a Corporate BBB Partner is a tangible demonstration of corporate responsibility to advance trust in the marketplace. Your partnership and financial support provides the necessary foundation for BBB to develop, deliver and administer innovative self-regulation and marketplace education programs that meet the needs of both industry and consumers. consumers.
For membership inquiries:
Kate McGoldrick, Managing Director
Kmcgoldrick@council.bbb.org
http://www.bbb.org/us/partnerships/

WOMMA and the Better Business Bureau Webinar Series Session 2: Striking the Balance Between Legal and Marketing

by Word of Mouth Marketing Association on Aug 10, 2010

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WOMMA and the Better Business Bureau Webinar Series Session 2: Striking the Balance Between Legal and Marketing — Webinar Transcript