This document summarizes key legal developments regarding sweepstakes, contests, disclosures, and social/digital media marketing. It discusses what constitutes consideration and how to structure promotions as sweepstakes or contests. Guidelines are provided for running promotions on platforms like Facebook, Twitter, Pinterest, and using user-generated content. Best practices are outlined for official rules, disclosures, winner notification, global promotions, and applications to support campaigns.
1. Key Legal Developments Affecting
Sweepstakes, Contests, Disclosures &
Digital/Social Media
Presented by Donna DeClemente
2. DDC Marketing Group
American Sweepstakes & Promotion Co
Alliance Sweepstakes Services
www.ddcmarketing.com
www.american-sweeps.com
www.alliancesweeps.com
Blog: Donna’s Promo Talk
Email: ddeclemente@ddcmarketing.com
Twitter: @ddeclemente
Facebook: Donna.DeClemente
LinkedIn: donnadeclemente
Shadow
Izzie
3. This session will address an array of legal
regulations and guidelines
• sweepstakes, giveaways and contests
• social media, digital media
• disclosers and intellectual property
Echo Jack
4. My Daughter, Alex, and her island pets.
Student at Ross University of Veterinary
Medicine
Frankie
Roti
6. What is Consideration?
• A Purchase or Payment of any kind
• Time: No more than 30 minutes max
• The Supreme Court did rule that watching a
30 minute show to find the code or answers in
order to enter isn’t too much time
7. What is Consideration?
• Alternate Method of Entry (AMOE) - If there is
consideration (purchase, payment or time), the
sponsor must offer a way to enter without
purchase/consideration
• Not Consideration:
– Postage
– Visiting retail establishment (but not multiple visits)
– Internet access
– Filling out entry form
8. What is Consideration?
• Social media entry requirements do not usually have
consideration, however…
• Writing about the product or taking a photo or video of
the product may be consideration:
– Take a photo of yourself with the shoes
could be done in a store
– Take a photo of yourself with the shoes
“out & about the town” is consideration
– Dunkin Donuts take a photo of yourself
taking a bite of a donut – can’t return the donut
• Can the participant effectively compete without
actually purchasing the product
9. What is Consideration?
• Degree of Effort Required is a big trend in
social media sweepstakes
• Earn extra entries from different challenges
- Does it requires too much time?
• Bonus entries for sharing/referring – not likely
to be deemed consideration
– But may raise Can/Spam or endorsement issues
10. What is Consideration?
• Do text and data charges constitute Consideration?
- Still no definitive answer
- No regulatory action or challenges
- Class action lawsuits pending
regarding premium text challenges
• Some lawyers still recommend AMOE
– No legal basis since Wi-Fi is regularly available
• Still should always state that data charges may
apply and to consult their providers
11. What is a Contest?
• Judged based on a degree of skill or uniqueness
• Must clearly define
objective judging criteria
• Needs to follow lottery laws
• Purchase may be required only if needed to create a
submission
• You may receive fewer entries for a contest, but
entrants normally are more engaged with the contest
itself—and with your brand
13. User-Generated Contests
• Include specific submission
guidelines defining what you
will and won’t accept
• Clearly communicate that entrant must have the
rights to use any of the submitted content and
that it does not infringe on copyrights.
• Don’t encourage people to submit a video that
will require music without providing royalty-free
music – i.e. a dance contest
14. User-Generated Contests
Voting Contests
Beware of Contests solely
based on public voting
- Lack objective criteria
- Mostly a popularity contest
- Considered a game of chance if no judging
- Vulnerability to voting fraud and bots
- Brands have been moving away from this
15. User-Generated Contests
Voting Contests
• Instead make public voting a part of the total
judging criteria
Example: Judging Criteria:
- 45% public appeal (number of votes)
- 30% creativity and originality
- 25% composition and quality
• Or, use phased judging
- Chose Finalists then open Voting
16. Contest Tips
• Don’t be involved in the contest creation
• Providing samples or templates (balancing act)
• Avoid claiming ownership
- Take a license only for rights you need
• Screen/monitor/filter
• Be specific/avoid ambiguities
• Prohibit all 3rd party content or only infringing
content
• Prohibit all trademarks
• Remember everything is transparent
17. Contest Tips
• Don’t ask people to write an essay about your
product
- Expect low entry rate if you do
• Don’t ask your entrants to get too outlandish
with their submissions - Keep it simple and
real
• Don’t ask entrants to post items that they may
not want to share with the public
- Is it too private or embarrassing?
18. Facebook Updates
• Facebook no longer allows Like Gating
• Can still ask fans to like your page,
but do not make it mandatory
- “Don’t forget to Like our page”
• You can now run a promo on your
FB page vs. a FB app
- difficult to collect data on participants
- difficult to contact winners
19. Facebook Updates
• Still can’t give participant extra entries for
sharing on their timeline
• Can allow a refer-a-friend feature for
an extra entry
- App creates a personalized URL to share
- Friend enters promotion from this URL
- Original participant gains an extra entry
20. • Don’t suggest that Pinterest sponsors
or endorses you or your promotion
• Don’t require people to Pin from a
selection - let them pin what they like
• Don’t make people pin or repin your contest rules
– This is a biggie
• Don’t run a sweepstakes where each pin, repin,
board, like or follow represents an entry
21. • Don’t encourage spammy behavior
– such as asking participants to comment
• Don’t ask people to vote with pins, repins,
boards, or likes
• Don’t overdo it: contests can get old fast.
• Don’t require a minimum number of pins -
One is plenty
22. Twitter Guidelines
• Discourage posting the same Tweet
repeatedly
• Don’t create a sweeps where the most
retweets win
• Ask Users to include an @ reply to ensure all
entries are viewed
23. Google +
Google+ still does not allow you to run any
promotions on their platform
- Only use it as a way to promote
24. FTC Endorsement Guidelines
FTC updated their Endorsement & Testimonial
Guidelines
• Sparked by an investigation into a Pinterest-based
contest conducted by Cole Haan which instructed
participants as follows:
Create a Pinterest board titled “Wandering Sole”
Pin 5 images of shoes from Cole Haan’s Pinterest board
Pin 5 images of participants “favorite places to wander”
Tag all with #WanderingSole
Cole Haan would then judge all entries
Award winner a $1,000 shopping spree
25. FTC Endorsement Guidelines
FTC Concluded the following:
• The act of pinning the images of the advertiser’s product
constituted endorsements
• So the act of pinning as well as tweets, videos, photos, etc. may
constitute endorsements
• Any incentive no matter how minimal may be an endorsement
• Must require disclosure
FTC now recommends:
• Use of sweepstakes title along is not adequate,
• Must also include #Contest or #Sweepstakes or #Entry or similar
designation in hashtag - #WanderingSoleContest
26. FTC Disclosure Guidelines
• FTC also focused on disclosures in traditional
media – 60 warning letters were issued
- Small type size
- Placement at the bottom of the page
- Light type font
- Insufficient contrast
- Placement in large/dense photos
- Insufficient duration on the screen
27. Social Media Content
• Think before you reuse any 3rd party content
– No clear legal guidance
• If you retweet it, post it, like it, you own it and is
that a risk? - Depends on risk tolerance levels
• Who has initiated the conversation?
• Does the profile picture include other people,
minors?
• What is the content?
– Does it include a photo, who’s in it, does it make a
claim you can’t support
28. Social Media Content
• Duane Reade
tweeted a photo of
Katherine Heigl
taken by a
paparazzi with their
bags and were sued
• They made it look
like an
endorsement
29. Social Media Content
On the other
hand, Arby’s
posted a Tweet
with @Pharrell
during the
Grammy’s that
worked
30. Social Media Content
Use of Celebrities
• Any use of celebrity tweets/posts presents a
high risk of a right of publicity violation
• Courts taking an increasingly narrow view of
“commercial use”
• Celebrities are earning big money to tweet
31. Social Media Content
Bud Light Recently apologized for this tweet:
“The perfect beer for removing ‘no’ from your
vocabulary for the night,” followed by the
requisite “#UpForWhatever” hashtag.
32. Official Rules
• All promotions - Giveaways, Sweepstakes,
Contests ….
• Should have official rules that are readily
available to all eligible participants that
clearly set forth the terms and details
• Official Rules are your contract with the public
33. Official Rules
1. No purchase necessary (for games of chance) – clearly
and conspicuously disclosed
2. Void where prohibited, void in (list states that must be
voided/sponsor wishes to void)
3. Sponsor’s official name and address
4. Start and end dates
5. Eligibility – national vs. local, age, also who is not
eligible – Sponsor’s employees, immediate family,
partners, agencies, etc.
6. How to enter – web/blog url, Facebook, Twitter,
hashtag, submission, etc.
34. Official Rules
7. Prize(s) description–ARV of each
- $600 or over must send 1099
8. Drawing date – Winner announcements
9. Info on how to obtain winner’s list
10. If utilizing Facebook as a method of entry:
“This promotion is in no way sponsored endorsed,
administered by, or associated with, Facebook.”
36. Bonding & Registration
• Only applies to Sweepstakes (Games of Chance)
• Consumer promotions only when total prize
value exceeds $5000
• A surety bond to cover prize redemption and
sweeps registration required for NY & FL
• Rhode Island registration only for retail
sweepstakes that prize value exceeds $500
• Quebec requires bonding and registration plus all
communications to be produced in both English
and French-Canadian
37. Global Promotions
• No such thing as an International promo
• Each country has it’s own laws, regulations, tax issues,
registration fees, privacy policies…
• Contests are not as restricted as sweepstakes
• US & Canada can be included together (except
Quebec)
- minor addition to the rules
- winner must answer a mathematical question
38. Applications
Facebook - Create Facebook apps with built-in voting restrictions and
fraud prevention
Twitter - Increase engagement with sharing incentives
Instagram - Use the link in your bio to direct traffic to your Campaigns
Pinterest - Drive traffic to your eCommerce sites. Display custom content
to users in different countries
Website and Blog - Embed Campaigns on your website or blog, or
publish them to the web where they function as landing pages
Shortstack.com
39. Applications
Rafflecopter makes it easy to run a giveaway online
Create & launch a giveaway in minutes
They provide a template for “Terms and Conditions”
- Available for a paid account
40. “The currency today is not money
It is user engagement and their content
But it is full of risks, and we all must be cautious”*
Thank-you
*Quote from Linda Goldstein, Partner, Manatt, Phelps & Phillips, LLP, from the BAA 2014
Annual Marketing Law Conference.