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  1. 1. Social Media Disclosure Best Practices in Protecting Consumers and Marketers March 1, 2010
  2. 2. Today’s Presenters Moderator: Paul M. Rand WOMMA President CEO, Zócalo Group Panelists: Gary Spangler WOMMA Board Member eMarketing Manager, DuPont Anthony DiResta WOMMA General Counsel Partner, Manatt, Phelps & Phillips LLP Patrick Thoburn Co-Chair, WOMMA Member Ethics Advisory Panel Co-Founder, Matchstick
  3. 3. Today’s Discussion <ul><li>Introduce the FTC’s Guide to Endorsements & Testimonials </li></ul><ul><li>Explain the role and interplay of WOMMA </li></ul><ul><li>Explore the new role of marketers & bloggers </li></ul><ul><li>Understand the Guide and best practices </li></ul><ul><li>Share resources and how to get involved </li></ul><ul><li>Answer questions or concerns </li></ul>
  4. 4. The FTC’s Guide in Review Key Concepts <ul><li>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 </li></ul><ul><li>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 </li></ul><ul><li>Only “ sponsored ” communications are subject to regulation and transparent disclosure is required for “material connections” </li></ul><ul><li>There is potential liability for advertisers, advertising agencies, and endorsers for misleading and unsubstantiated statements made by the endorser </li></ul><ul><li>Don’t look at the FTC Guides in isolation - - they </li></ul><ul><li>have legal implications in other contexts </li></ul>
  5. 5. Understanding the Guide What is an Endorsement? <ul><li>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 </li></ul><ul><li>Endorsements include: </li></ul><ul><ul><li>Verbal statements </li></ul></ul><ul><ul><li>Demonstrations </li></ul></ul><ul><ul><li>Depictions of the name, signature, likeness or other identifying personal characteristics of an individual </li></ul></ul><ul><ul><li>The name or seal of an organization </li></ul></ul><ul><li>Endorsements do not include: </li></ul><ul><ul><li>Fictional dramatization of a real life situation </li></ul></ul><ul><ul><li>Statements by an identified company spokesperson </li></ul></ul>
  6. 6. Understanding the Guide Work with an Endorsement <ul><li>Must reflect the honest opinions, findings, beliefs, or experience of the endorser </li></ul><ul><li>May not convey any express or implied representation that would be deceptive if made directly by the advertiser </li></ul><ul><li>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 </li></ul><ul><li>Endorsers also may be liable for false or misleading statements made in the course of their endorsements </li></ul>
  7. 7. Understanding the Guide Disclosure of Material Connections <ul><li>The Guides require the disclosure of any “ material connection ” between the advertiser/seller and its endorser </li></ul><ul><ul><li>A “material connection” is information that could impact the weight or credibility a consumer gives to the endorsement </li></ul></ul><ul><ul><li>Disclosure must be clear and prominent </li></ul></ul><ul><ul><li>Language should be easily understood and unambiguous </li></ul></ul><ul><ul><li>Placement must be easily viewed and appear in a readable and noticeable font size/color </li></ul></ul><ul><li>Types of “material connections” </li></ul><ul><ul><li>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) </li></ul></ul><ul><ul><li>Relationship between the advertiser and speaker (e.g., employment) </li></ul></ul>
  8. 8. Understanding the Guide Liability Issues <ul><li>All stakeholders – whether advertisers, brands/companies, ad agencies, and bloggers or other agents – are liable for: </li></ul><ul><ul><li>Their failure to disclose “material connections” and </li></ul></ul><ul><ul><li>The speaker’s making unsubstantiated claims about the products/services of the advertiser or brand </li></ul></ul><ul><li>FTC now mandates that advertisers and brands develop policies that: </li></ul><ul><ul><li>Educate their agents/endorsers about their responsibilities; and </li></ul></ul><ul><ul><li>Monitor the communications/statements/claims by their agents/endorsers. </li></ul></ul>
  9. 9. A Partner Is Needed The Role of WOMMA <ul><li>WOMMA launched Ethics Code in 2005 to provide consumers with insight into ethical standards online </li></ul><ul><li>In early 2009, began working with members and the FTC to submit comments regarding the Guide on behalf of the Word of Mouth industry </li></ul><ul><li>Through WOMMA’s “ Living Ethics ” project and in anticipation of the FTC Guide update, announced changes to Ethics Code re: compensation and transparent disclosure </li></ul><ul><li>New FTC Guidelines publicly noted WOMMA’s work on behalf of the WOM industry, specifically calling attention to the WOMMA Ethics Code </li></ul><ul><li>Today, WOMMA has: </li></ul><ul><ul><li>Active, ongoing involvement with FTC to shape Guidelines </li></ul></ul><ul><ul><li>Advanced knowledge/understanding of the guidelines </li></ul></ul>
  10. 10. Looking Forward The Role of Marketers <ul><li>Educate “bloggers” regarding responsibilities Educate internal corporate audiences regarding responsibilities: </li></ul><ul><ul><li>Create a “ culture of compliance ” </li></ul></ul><ul><li>Require disclosure from “bloggers” </li></ul><ul><ul><li>“ If you choose to review or share this product please be sure to disclose that it was provided to you by the company.” </li></ul></ul><ul><li>Monitor to ensure disclosure is happening </li></ul><ul><ul><li>Remind those who “forget” to disclose </li></ul></ul><ul><ul><li>Determine “cut off” policy for those who do not comply </li></ul></ul>
  11. 11. Looking Forward The Role of Bloggers <ul><li>“ Blogger” responsibilities: </li></ul><ul><ul><li>Confirm understanding of responsibilities with marketers </li></ul></ul><ul><ul><li>Disclose all material connections on relevant platforms </li></ul></ul><ul><ul><li>Communicate proactively with marketer to demonstrate compliance </li></ul></ul>
  12. 12. Best Practices Blog Disclosure <ul><li>Personal and Editorial blogs </li></ul><ul><ul><li>Disclose any product, service or compensation provided by a marketer </li></ul></ul><ul><ul><li>Disclosure requirement: </li></ul></ul><ul><ul><ul><li>As part of editorial copy </li></ul></ul></ul><ul><ul><ul><ul><li>“ I received ( product or sample ) from ( company name ) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>( Company name ) sent me ( product or name ) </li></ul></ul></ul></ul>
  13. 14. Best Practices Blog Disclosure <ul><li>Review blog </li></ul><ul><ul><li>Disclose any product, service or compensation provided by a marketer </li></ul></ul><ul><ul><li>Disclosure requirements: </li></ul></ul><ul><ul><ul><li>As part of editorial copy </li></ul></ul></ul><ul><ul><ul><ul><li>“ I received ( X product or service ) from ( company X ) to review” </li></ul></ul></ul></ul><ul><ul><ul><ul><li>“ I was paid by ( company X ) to review” </li></ul></ul></ul></ul>
  14. 16. Best Practices Review Blogs: Disclosure & Relationships Section <ul><ul><li>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. </li></ul></ul>
  15. 18. Best Practices Comments in Online Discussions <ul><li>I received ( product or sample ) from ( company name ) </li></ul><ul><li>I was paid by ( company name ) </li></ul><ul><li>I am an employee or representative of ( company name ) </li></ul>
  16. 20. Best Practices Microblogs <ul><li>Twitter </li></ul><ul><ul><li>Disclosure requirement: </li></ul></ul><ul><ul><ul><li>Must clearly state hash tag within tweet </li></ul></ul></ul><ul><ul><ul><ul><li>#spon (sponsored) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>#paid (paid) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>#samp (sample) </li></ul></ul></ul></ul><ul><ul><li>Create link to “Disclosures and Relationships” section on profile </li></ul></ul>
  17. 23. Best Practices Status Updates on Social Networks <ul><li>Social networks: </li></ul><ul><ul><li>Disclosure options: </li></ul></ul><ul><ul><ul><li>As part of photo or video description (see photo and video sharing sites best practices) </li></ul></ul></ul><ul><ul><ul><li>As part of status update </li></ul></ul></ul><ul><ul><ul><ul><li>“ I received ( X product or service ) from ( company X ) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>“ I was paid by ( company X ) </li></ul></ul></ul></ul><ul><ul><li>Create “Disclosures and Relationships” section on profile </li></ul></ul>
  18. 24. Best Practices Status Updates on Social Networks
  19. 25. Best Practices Video & Photo Sharing Sites <ul><li>Video sharing sites </li></ul><ul><ul><li>Disclosure options: </li></ul></ul><ul><ul><ul><li>As part of video content </li></ul></ul></ul><ul><ul><ul><ul><li>“ I received ( X product or service ) from ( company X ) to review/create this video </li></ul></ul></ul></ul><ul><ul><ul><ul><li>“ I was paid by ( company X ) to review/create this video” </li></ul></ul></ul></ul><ul><ul><ul><ul><li>As part of video description </li></ul></ul></ul></ul>
  20. 26. <ul><ul><ul><ul><li>Youtube user Jenergizer </li></ul></ul></ul></ul><ul><ul><ul><ul><li>“ 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 21 st to send me 5 pictures of you and your friends that resemble the individual Harajuku dolls.” </li></ul></ul></ul></ul>
  21. 27. Best Practices Video & Photo Sharing Sites <ul><li>Photo sharing sites </li></ul><ul><ul><li>Disclosure requirement: </li></ul></ul><ul><ul><ul><li>As part of photo description </li></ul></ul></ul><ul><ul><ul><ul><li>“ I received ( X product or service ) from ( company X ) to create this </li></ul></ul></ul></ul><ul><ul><ul><ul><li>“ I was paid by ( company X ) to create this” </li></ul></ul></ul></ul>
  22. 29. Best Practices Podcasts <ul><li>Include as part of the audio content and part of the written description </li></ul><ul><ul><li>“ I received ( product or sample ) from ( company name )” </li></ul></ul><ul><ul><li>“ I was paid by ( company name )” </li></ul></ul>
  23. 30. <ul><li>“… before we start I just wanted to let everyone know that today’s episode is sponsored by Tim Grace of” </li></ul><ul><li>episode 11: Apartment Marketing gone digital </li></ul>
  24. 31. Resources Are At Your fingertips <ul><li>Word of Mouth Marketing Association </li></ul><ul><ul><li> </li></ul></ul><ul><li>Guide to Social Media Disclosure </li></ul><ul><ul><li> </li></ul></ul>
  25. 32. <ul><li>Become a member of WOMMA </li></ul><ul><ul><li> </li></ul></ul>Getting Involved
  26. 33. Questions?