Brands are eager to harness the power of social media. They hire marketing experts so they can get it “right”, but they often overlook the legal implications of their social media marketing. Doing it “right” involves detailed risk analysis from both a marketing and legal perspective.
Consider the rampant cause marketing we see in the wake of tragedies like Newtown and Hurricane Sandy. Many businesses are promoting their goods/services while offering a percentage of profits to victims. Are they aware that the New York Attorney General has issued “best practices” to promote cause marketing transparency through a series of disclosures? These businesses may be getting it “right” from a marketing perspective, but they may be failing to insulate themselves from legal risk.
Most businesses neglect legal due diligence in social media fall for one of three reasons. First, many brand managers or even general counsels are unaware of the complexities of advertising and marketing law. Second, businesses assume that if their competitor is doing it, it must be okay. Third, brands have not allocated budget or time for a legal check-up. Regardless of the reason, brands face potentially significant financial loss in the face of a challenge from the FTC, a state Attorney-General, a consumer advocacy group, or a class action lawsuit.
The news here is not all bleak, however. It is never too late to become familiar with the risks associated with social media campaigns. The even better news is that it is not difficult to obviate those risks with proper planning. Here are five broad principles to guide any brand launching in social media that will help avoid legal problems.
STEP TWO: Create policies that protect your brand. Your social media team should consist of legal, HR, and marketing personnel. The team should plan your brand’s social media policies for your people and your intellectual property. Policies for people should consider the requirements of the FTC Endorsement and Testimonial Guidelines. They should also guide employees on how to engage in social media in a way that promotes the brand and makes sense for your own corporate culture. There is no one size fits all social media policy. Each company should draft its policies to align with preexisting guidelines for social interaction, email, confidential information, and intellectual property protection. Your policies for intellectual property in social media should outline consistent use of your trademarks, DMCA takedown procedures, and protection of your trade secrets.
STEP THREE: Engage legal counsel in creating a marketing plan. Do you want to invite user-generated content? How will you vet the content before posting? How will you monitor responses to the content? How swiftly can you respond to content or remove it from your pages? As you roll out into the social media space, you may engage customers with a sweepstakes or contest. Have you considered the 50 states’ laws in these areas? (For more discussion of this topic, click here.) Perhaps you will consider using geo-location technology to enable behavioral marketing. Has legal updated your privacy policies to cover these practices? Maybe you are considering a text message campaign to accompany a loyalty program. Have you considered the implications of the FTC’s recent lawsuit of 29 affiliate marketers in connection with text message spamming and deceptive free offers? Bring legal into the discussion early as you plan strategy and your marketing approach. Review the legal paradigms that apply to your marketing efforts. Your legal counsel should support your business goals and help you create meaningful programs with minimal legal risk.
STEP FOUR: Avoid copycat campaigns: Brands frequently look to see what competitors are doing for reality checks and roadmaps. This approach rarely yields positive results. Social media requires fresh content and imagination. Even more importantly, copycat campaigns often expose brands to legal risk. Your competitor may not have considered the legal implications of influencer marketing, misusing intellectual property, or running a sweepstakes. Never assume that your competitor has more resources and therefore must have done legal vetting. Firstly, many brands, even the largest and best funded, rush to market without careful assessment of legal risk. Secondly, even if your competitor has performed a social media legal review, it may have chosen to take on more risk than your brand would be willing to accept. The bottom line is just because your competitor is doing something does not make it legal or an appropriate risk for your company.
STEP FIVE: Focus on intellectual property rather than ROI. The question of when brands will see a return on investment from their social media remains in the forefront of business owners’ minds. Those who are ahead of the curve realize that metrics may be ephemeral with social media, but the long-term benefits of brand recognition are priceless. In 2013, brands have started to understand that the goal is not amassing “likes” or followers. The goal is to interact with customers in a meaningful way via social media that builds loyalty and secondary meaning in the marketplace. If done lawfully, social media campaigns can augment the value of a brand’s trademarks (indeed, trademarks are company assets and can be valued if a company is sold) as well as the bottom line. If done without consideration for legal issues, the public relations and legal fall out can damage a company’s intellectual property and leave it vulnerable to legal challenge.
Information in this article should not be construed as legal advice. You should not take any specific actions based on this article without consulting the author or another attorney.