thinkLA AdU Grad: Legal 2015 Presentation Slides

Presented by Kathyleen A. O’Brien, Dominique Pietz and Todd MumfordApril 21, 2015

7 pm

The Use of Key Marketing Techniques: How to Reduce Legal Risk

Presentation for ThinkLA

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Speakers

Kathyleen A. O'Brien, Partner Reed Smith LLP Tel.: +1 310 734 5268 (Century City, CA) Email: [email protected]

Dominique Pietz, Senior AssociateReed Smith LLP Tel.: +1 310 734 5215 (Century City, CA) Email: [email protected]

Todd Mumford, AssociateReed Smith LLP Tel.: +1 310 734 5260 (Century City, CA) Email: [email protected]

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Topics We Will CoverWhat You Should Know Before Using the Following

Popular Marketing Tools:o Use of Social Mediao User Generated Advertisementso Guerrilla and Viral Marketing

What Can Go Wrong?

What Are The Top Takeaways to Reduce Legal Risk?

Topics

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“In an era of consumer expressions, seek to facilitate and participate with communities, not control them.”

-- Joe TripodiEVP and Chief Marketing

and Commercial OfficerCoca-Cola Company

Social Media

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Social Media

Actively engage fansMonitor the pulseCreate a dialogueTrack analyticsSet the stage for digital leadership

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DiGiorno #WhyIStayed

DiGiorno launched a marketing campaign based on the hashtag #WhyIStayed”

Social Media Gone Wrong

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DiGiorno #WhyIStayed

Unfortunately, #WhyIStayed is a hashtag about domestic violenceDiGiorno deleted the tweet within minutes and issued an apology.“A million apologies. Did not read what the hashtag was about before posting.”


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The Delta Giraffe Gaffe

Delta Airlines attempted to congratulate the US on winning the World Cup Game against Ghana by posting the following tweet:

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The Delta Giraffe Gaffe

Delta’s tweet used the Statute of Liberty to represent the US and a giraffe to symbolize GhanaUnfortunately, giraffes aren’t native to GhanaDelta issued a prompt apology:

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Key Takeaways


Be sensitive to important social and political issues.

Clear all hashtags, twitter handles, etc.

Consider prompt apology and take down for gaffes.

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Social Media Done Right

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Example No. 1: The Doritos Commercial Doritos conducted UGC contest where winning entry was shown during 2008 Super Bowl and winner received $10k prize.

Example No. 2: The GoPro Cool Video Contest where winning entry received $5,000 among other prizes

Example No. 3: The Quiznos v. Subway TV Ad Challenge which solicited user comparisons of Subway and Quiznos sandwiches

Advertiser Solicited UGC

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Winning Entry – Doritos “Crash the Super Bowl” Contest


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GoPro – Cool Video ContestGoPro ran a competition where users could submit a video shot on one of their cameras for a chance to win $5,000, amongst other prizesThe campaign was well-received by consumers and helped to promote the brand


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Subway v. Quiznos – the UGC Wars‘Quiznos v. Subway TV Ad Challenge’Quiznos solicited user generated video entries depicting that Quizno’s sandwiches have more meat than Subway’s sandwiches.Subway took issue with the claims made in the resulting videos and subsequently filed a lawsuit alleging, among other things, that Quiznos engaged in false and misleading advertising in the spot. Doctor’s Associates Inc. v. QIP Holders LLC, 82 U.S.P.Q.2d (BNA) 1603 (D. Conn. April 18, 2007).


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Consumer Generated Video –Quiznos Challenge


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#ImAMetsFanBecause


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#ImAMetsFanBecause


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Legal Challenges

Key TakeawaysNo “free pass” for UGC.Advertisers creating or using UGC must comply with all federal and state laws and guidelines that govern traditional advertising:o UGC must not include false or misleading

statements or omissions. Lanham Act; 15 U.S. C. § 1125(a).

o Advertisers must not engage in unfair or deceptive acts or practices. § 5 FTC Act.

o Advertisers must have a reasonable basis for objective claims. § 5; Federal Trade Commission Act.

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Key Takeaways

UGC used in advertising must comply with laws which govern use of third-party materials and intellectual property.

Any third-party materials used (e.g.,photographs, video, news stories, Websites, music, names, images, likenesses, etc.) protected by copyright, trademark law, and rights of privacy or publicity must be cleared prior to use.

Legal Challenges

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Guerilla and Viral Marketing

Viral and Guerrilla Marketing

“Viral Marketing” uses pre-existing social networks such as Facebook, Twitter, etc. to deliver messages about products or services.“Guerrilla Marketing” uses unconventional or unexpected marketing methods to generate buzz about products or services.Both are methods that seek to enlist consumers to pass along the message.

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Viral Marketing Gone Wrong

The Toyota Matrix “Maniacs”

2009: Toyota began its self-described “terror marketing campaign” Was aimed at the young male purchasers of their youth-targeted Matrix automobile.The campaign invited consumers to nominate their friends to be “victims” of a prank.Participants could choose from a group of fictional characters created to terrorize their friends.

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Viral Marketing Gone Wrong

The Toyota Matrix “Maniacs”

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Viral Marketing Gone Wrong: Toyota Matrix

Amber Duick, one such nominee, received 9 emails from a fictitious character called Sebastian Bowler.

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Ms. Duick filed suit seeking $10 million in damages against Toyota and its advertising agency.Her complaint alleged she became so frightened, she slept with a machete and mace next to her bed and that she became physically ill because she was convinced a disturbed man was on his way to her house.Major issue here: Did Ms. Duick knowingly consent to receive these communications and to participate in this campaign?

Toyota Matrix – The Lawsuit

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Legal and Business Challenges

Key TakeawaysBefore launching an extreme campaign consider the following:

Business challenges:Consider your audience: what is the likely consumer reaction

and the likely impact on your company’s name and reputation in the marketplace?

How will you respond if things go south?

Legal challenges: Could the messaging have a potential negative impact on the

average recipient and prompt reasonable concerns for health, safety, etc?

Have the recipients knowingly consented to participate?

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Guerrilla Marketing: Gap’s Pants Party

Gap attempted to use dating app Tinder to advertise

Gap hoped Tinder’s users would scroll through the potential singles on the app and come across their ad’s message

When a user “liked” their message, they could view a 30% off coupon

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Guerrilla Marketing: Gap’s Pants Party

"We did not approve this campaign and it is not an ad.“ - Tinder

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Key Takeaways From Gap’s Pants Party

Does the campaign trade off the good will of a third party?o Is it in violation of that party’s terms of

use?o Is consent required?

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Guerrilla Marketing: Boston Bomb Scare

Turner Broadcasting System’s Cartoon Network created a bomb scare when it advertised “Aqua Teen Hunger Force” by planting battery-powered LED placards throughout Boston.

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Guerrilla Marketing: Boston Bomb Scare

The LED placards depicted a cartoon character called a “mooninite.”

The placards were mistaken for bombs.

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Consequences to Turner

Turner agreed to pay $2 million in restitution to the city of Boston.

Head of the Cartoon Network was forced to resign.

The independent contractors who Turner’s advertising agency hired to display the LED placards were each sentenced to over 50 hours of community service.

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Key Takeaways From Boston Scare

Does the campaign involve the use of public or private property?o Are permits required?o Is consent required?

Post 9/11 and the Boston Marathon bombings, could a reasonable person possibly interpret the campaign as a threat to public health or safety?

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Testimonials and EndorsementsFTC’s new guidelines apply to endorsements of your company’s products or services by:o Celebritieso Consumerso Employees/representatives

Two questions:o Is the statement or communication “sponsored,”

i.e., Is speaker acting independently or on behalf of an advertiser or its agent?

o Does the statement or communication constitute advertising?

FTC Guidelines

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Must make consumers aware when advertiser uses a paid endorsementRequires disclosure of any “material connections” between advertiser/seller and endorsero Material connection = information that would impact weight

or credibility a consumer gives to endorsemento Must be clear and prominent

Types of material connections:o Consideration given to a speaker or blogger by an

advertiser in the form of benefits or incentivesCash, free products, prizes, special access privileges, commission on the sale of a product

o Relationship between the advertiser and the speaker E.g., employment relationship

Rule of Thumb: When in doubt, disclose affiliation

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Who is liable for failure to disclose?o All stakeholders -- advertisers, brands,

companies, ad agencies, bloggers or others agents can be liable for:

Failure to disclose material connectionSpeaker’s unsubstantiated claims about the products and services of the advertiser or brand

FTC requires advertisers to:o Educate their agents and endorsers about their

responsibilitieso Monitor the communications/ statements/claims

by their agents/endorsers

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What About Bloggers?

Bloggers who offer endorsements must clearly and conspicuously disclose any payments or freebies received from the subjects of their reviews.

This rule applies to third party ad networks paid by advertisers who then pay bloggers and Tweeters on behalf of the advertiser.

Endorser Disclosures

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Katherine Heigl/Duane Reade

Like many other right of publicity statutes, California Code Section 3344 prohibits:

the use of another’s name, voice, signature, photograph, or likeness

On or in products, merchandise, or goods, or advertisements

Without the prior consent of that person


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Develop a strategy for your use of social media:

What do you want to achieve?

How do you plan to use social media to get there?

Up front, determine all the ways your company or client plans to use the content submitted.

Have appropriate protections and response mechanisms in place before you begin.o Includes purchase of appropriate domain names to

protect against negative sites.

What Should You Do Now?

Top Takeaways

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Take Steps to Minimize Legal Risk

Take advantage of the federal laws that were enacted to protect you.

Post a takedown policy to take advantage of the protections of the DMCA.

Be aware that if you use a consumer’s submission to create your own content you have forfeited the protections of the DMCA and the CDA.

Top Takeaways

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Clearly communicate your expectations and requirements to consumers in terms and conditions and at the point of submission.

Make sure your terms and conditions clearly communicate what the consumer is agreeing to.

Make sure your terms and conditions are accepted in a way that is binding.

Monitor content and refuse to post content that violates your terms and conditions.


Top Takeaways

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Implement technological screening methods including filters that screen for profanity and hate messages.

Deal appropriately with minors.

Use appropriate disclaimers.

If you are concerned about the proper use of your company’s trademarks, copyrighted material or other intellectual property, provide pre-cleared content for consumers to use.


Top Takeaways

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thinkLA AdU Grad: Legal 2015 Presentation Slides

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