Do you know your flog from your blog? What about legal and ethical issues around privacy, UGC, copyright, incentivisation and more? Advertising compliance team ReACTS give this excellent overview of WOM, social media and the law for WOM UK.

1. Do you know your
blog from your flog?
The benefits and legal risks of
Word of Mouth Marketing
in Social Media
Marina Palomba
Christopher Hackford

2. Word of Mouth Marketing
Many types of marketing:
 Brand Blogging
 Buzz Marketing
 Advocate Marketing
 Referral Programmes
 Conversation Creation
 Viral Marketing

3. Word of Mouth Marketing
Many types of media:
 Blogs
 Social Networks
 Discussion Forums
 Online Video sites
 Social Search sites
 Review sites

4. Word of Mouth Marketing
Some techniques and terminology:
Astroturfing:
“artificially creating the impression of spontaneous,
grassroot behaviour”
Flog:
“promoting a product in a fashion one might find on
a fan site or regular blog entry”
Sock Puppet:
“a fake online identity used to deceive others”

5. Word of Mouth Marketing
Plenty of legal issues involved…

6. Consumer Protection Regulations
Consumer Protection from Unfair Trading
Regulations 2008
“Any act, omission, course of conduct or
representation, commercial communication including
advertising and marketing, by a trader, directly
connected with the promotion, sale or supply of a
product to (or from) a consumer.”
Covers all business to consumer marketing, but not
B2B.

7. Consumer Protection Regulations
The Regulations ban “unfair commercial practices”
and create 5 new types:
1. Misleading actions
2. Misleading omissions
3. Aggressive practices
4. Practices that (i) contravene professional diligence
and (ii) materially distort consumer’s behaviour
5. 31 automatically unfair practices (Schedule 1)

8. Consumer Protection Regulations
Who must comply?
 Advertisers
 Agencies
 Directors and Senior Managers of both the above

9. Consumer Protection Regulations
Rule 22 of Schedule 1:
“falsely claiming or creating the impression that the
trader is not acting for the purposes relating to his
trade, business or craft or profession, or falsely
representing oneself as a consumer”

10. Consumer Protection Regulations
Breach of this rule is automatically unfair and thus a
criminal offence
Fines of up to £5,000 for companies
Fines of up to £5,000 for companies and up to 2
years in prison for consenting or negligent directors
or senior managers

11. Consumer Protection Regulations
How does this apply to Word of Mouth?
 Blogs /Flogs
 Fake profiles on social networking sites
 Brand ambassadors/Advocates
 Street teams
 Reviews

12. Consumer Protection Regulations
How does this apply to Word of Mouth?
Fundamentally important to ensure that the
advocate explains that he or she is acting for the
advertiser

13. Copyright
Particularly relevant to Blogs and Viral
 Ensure that all material is original to the creator and
not copied from other blogs or third party works
 Requires careful instruction to advocates

14. Copyright
User Generated Content
 Inform users about copyright position prior to
submission of content. Failure to do so may
invalidate any disclaimer
 Decide who owns copyright in submitted materials
 Subway v Quiznos

15. Defamation and Offence
Who monitors what is said?
 Blogs
 Discussion Forums
 User Generated Content
 Review sites

16. Moderation
Three types
 Pre-publication
 Post-publication
 Reactive - “Notify and Take Down”
 Copyright infringement
 Report Abuse
Who undertakes the moderation?

17. Moderation and Children
Content aimed at or involving children should be
moderated pre-publication

18. Moderation
A word of warning…
The more moderation undertaken by the advertiser,
the more likely it is that they will be held liable for
posts.
Important to ensure that moderators know what they
are doing.

19. E-commerce and Privacy
Privacy is a serious issue.
 E-mail addresses are personal information
 Personal information is commercially valuable
 Need to comply with Data Protection Act:
Make clear who is collecting data and why?
 Have a proper privacy policy in place
 Comply fully with social networking sites’ policies

20. E-commerce and Privacy
Friend referral schemes
 These can be trickier than you might think
 Not permitted to send unsolicited communications
 Not permitted to encourage others (e.g. by offering
incentives) to send communications
 OK if initial recipient forwards message on of their
own volition

21. Employment Issues
A word of warning….
Providing that they do not masquerade as a
consumer, it is fine to encourage employees to
review, comment or blog about products, but you
need to ensure that the employees do not leak
confidential information.

22. Advertising and Marketing
CAP Code
“advertisements in non-broadcast electronic media,
including online advertisements in paid-for space
(eg banner and pop-up advertisements)”
Includes advertisements posted
onto social networking sites

23. Advertising and Marketing
Extension of CAP Code remit
Proposal to extend remit to cover all online
promotional messages, including those on corporate
websites and third party websites.

24. Brand Reputation –
Where it went wrong
Radio station TalkSport was censured by the ASA
for placing advertising on football blogs that
pretended to be normal postings.
The ads breach CAP Code clauses 7.1 (misleading)
and 22.1 (identifying marketers)

25. Where it went wrong
Wal-marting across America
Walmart fake blogger led to a huge PR fiasco and
embarrassing apologies

26. Where it went wrong
American Express
Fake blog writer told readers to “check out a great
Amex billboard”
Found out to be an Oglivy employee: caused
extensive negative word of mouth across the world

27. Where it went wrong
Consumers hate being conned

28. Where it went wrong
Consumers hate being conned
Sony got attacked for a bogus PSP blog:
“Incredibly insulting to the intelligence of their
customers”

29. Where it went wrong
Consumers hate being conned

30. Where it went wrong

31. Ethics
Code of Ethics and Standards of Conduct for the
Word of Mouth Marketing Association UK
Standard 3 – Disclosure of relationship: A WOMMA member
shall require their representatives involved in a word of mouth
initiative to disclose the material aspects of their commercial
relationship with a marketer, including the specific type of any
remuneration or consideration received.

32. Ethics
The WOMMA Guide to Disclosure in Social
Media Marketing
Clear and Prominent Disclosure
“No matter which platform is used, adequate
disclosures must be clear and prominent. Language
should be easily understood and unambiguous.
Placement of the disclosure must be easily viewed
and not hidden deep in the text or deep on the page.
All disclosures should appear in reasonable font size
and color that is both readable and noticeable to
consumers.”

33. Federal Trade Commission USA
FTC regulations state:
“When there exists a connection between
the endorser and the seller of the advertised
product which might materially affect the
weight or credibility of the endorsement (i.e.,
the connection is not reasonably expected
by the audience) such connection must be
fully disclosed.

34. Summary
 Good advertising does not rely on tricking or
deceiving your target audience
 The consumer is smarter than you think. Marketing
tactics must be genuine and transparent
 These days, everything you do will come under
scrutiny
 Involve your consumers in brand conversation and
give them the tools to get involved.
 Adverse ASA adjudications will not enhance value
of brand
 CPR infringements leave you liable to fines

35. Thank You!
www.advertisingcompliancelaw.com