This document discusses the ethical and legal implications of word-of-mouth marketing (WOMM). It outlines common themes regulators emphasize, such as applying the same rules to social media as traditional media. It stresses the importance of transparency, truth, and disclosure in WOMM. Companies are responsible for the communications of employees, partners, and others regarding their brand. Clear policies, training, monitoring, and prioritizing the audience perspective can help companies meet ethical standards in WOMM.

1. The Ethical (& Legal) Implications of WOMM:
What You Don’t Know Could Hurt You

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Sam Ford
Director of Audience Engagement,
Peppercomm
Co-Chair, Word of Mouth Marketing
Association Ethics Committee
@Sam_Ford
sford@peppercomm.com

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My organization, Peppercomm, is a member of the Word of Mouth
Marketing Association (“WOMMA”) and currently am co-chair of its
Ethics Committee My use of the WOMMA name/logo and my
participation here is made possible with the permission of
WOMMA, but the opinions presented here are my own, and not
necessarily those of WOMMA. Please also note that my primary
focus here is on sharing best practices regarding ethics and not
providing legal counsel. I am not a lawyer. You should
independently consult with your own lawyer or advisors for your
organization’s specific legal and regulatory needs.

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Common Regulator Themes
• Social media is subject to the same rules that apply to traditional media
• Establish documented policies and procedures
• Train representatives and make them aware of responsibilities
• Disclose/disclaim to avoid entanglement & adoption
• Monitor and archive all business communications

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Transparency
• Those with material connections should disclose that tie when talking about a
company, its products or services, or its competitors
• Includes employees but also business partners/agencies/vendors
• Also includes third parties the company has engaged with
• Applies to sponsored/paid marketing activities as well
• When in doubt, err on the side of transparency

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Making Necessary Disclosures
• Clear and conspicuous
• Close to each claim made
• Plain language/in ways that you can assume the audience will understand

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Truth & Substantiation
• Have facts to back up any claims made before you start making them
• All those with a material connection to the company who may make such claims
must have accurate information to back it up
• Statements made by external people must reflect their honest opinions (i.e. you
can’t pay or provide goods for review in exchange for only positive reviews)
• Applies to sponsored/paid marketing activities as well
• Don’t amplify mistruths

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Disclose All Material Terms
• When possible, put any qualifying information into the original claim itself
• Otherwise, provide clear and conspicuous disclaimer that lets the audience know
there is other information they need and which directs audience to further
information
• Also includes third parties the company has engaged with
• Applies to sponsored/paid marketing activities as well
• When in doubt, err on the side of transparency

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Responsibilities of Companies/Brands
• Institute company social media policies/guidelines
• Ensure any business partners have similar policies in place
• Educate all employees, agencies, partners, vendors, and external parties you
engage with
• Reasonably monitor for how these parties are communicating about your
company
• Make commercially reasonable efforts to correct situations in which transparency
is lacking

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Celebrity Endorsements

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Reviews
• 19 Companies paid $350K in penalties
• Reviews were found to be fake and misleading
• Brands and agencies are responsible for reviews that are placed by vendors

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Native Advertising
Image is logo of What’s This?! Media

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5 Key Steps to Creating Ethical
Communications
1. Don’t just react to regulation; develop proactive, commonsense policies.
2. Use social media especially as a listening tool.
3. Emphasize internal coordination in your storytelling.
4. Educate partners on proper disclosure, policies, and approaches.
5. Prioritize empathy; look at all your strategies and communications from
the audience’s perspective

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Sam Ford
Director of Audience Engagement,
Peppercomm
Co-Chair, Word of Mouth Marketing
Association Ethics Committee
@Sam_Ford
sford@peppercomm.com