In a recent article, the blog Social Times identifies seven twitter habits that marketers should avoid so as to not annoy their followers.

Top offenders include:
1. Not using url shorteners
2. Mundane tweets
3. Auto Direct Messages
4. Using so many characters that your followers can’t RT (retweet)

The Federal Trade Commission (“FTC”) adopted final changes to the Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Guides”). First, the revised Guides indicate that a “results not typical” disclaimer is likely not sufficient when an ad highlights a consumer’s experience with a product when such experiences are not typical (e.g., “before” and “after” photos of a woman who claims to have lost 50 pounds in 6 months with the product). Rather, the Guides require advertisers to clearly and conspicuously disclose the results that most consumers can reasonably expect (e.g., “most women who use the product for 6 months lose at least 15 pounds”).

Additionally, the Guides confirm that advertisers who sponsor bloggers must assure that the connection between the company and endorser is disclosed and should establish procedures to advise endorsers of their obligations and monitor the conduct of the endorsers. The Guides also clarified that such obligations only arise when, viewed objectively, the relationship between the advertiser and the speaker is such that the speaker’s statements can be considered sponsored by the advertiser.

Accordingly, individual reviews about the positive benefits of a product are not deemed “endorsements” (and therefore would not require disclosure of the connection between the reviewer and the seller) when they are (a) made by a consumer who purchases the product with his/her own money and writes in his/her personal blog or (b) made by a consumer who received a coupon from a third party (not the company) for a discount or free trial of the product and written in his/her personal blog. However, if a consumer takes part in a service whereby it receives various free products, cash, or other payments from the company and is expected to review the products, the consumer’s positive review would likely be deemed an endorsement and require disclosure of the material connection between the reviewer and the seller, including if she received the products for her review.

Additionally, the Guides provide recommendations with respect to celebrity endorsements. First, celebrity endorsers may be liable for statements about a product which are false or do not represent the celebrities own views, even though the celebrity is reading from a script. Second, advertisers should disclose the connection between a celebrity and a company when the celebrity makes a “plug” about a product or service on a talk show or other social media when it is not obvious that the celebrity is paid to speak about the product or service. Third, advertisers may use endorsements of celebrities only if the advertiser believes that the celebrity continues to subscribe to the views present.

You can view the Guides here.

These materials have been prepared by Winston & Strawn for informational purposes only. These materials do not constitute legal advice and cannot be relied upon by any taxpayer for the purpose of avoiding penalties imposed under the Internal Revenue Code.

The first lawsuit involving the use of Twitter was filed in Chicago last week.

The lawsuit was filed by a realty company in connection with one of its tenant’s tweets. Specifically, the tenant arguably stated “Who said sleeping in a moldy apartment was bad for you? Horizon realty thinks it’s okay.” The realty company sued the tenant for libel. While the fact that the case filed has been widely reported, I would like to discuss its merits.

The first important take-away from this case is that any statement, no matter how short, could be subject to defamation claims which companies need to keep in mind when allowing their employees to use social networking. A good social networking policy should provide guidance and training to employees about the need to be truthful and to disclose that they are blogging on behalf of the company; monitor the employees to confirm compliance; and promptly remove postings that do not comply with policy.

Second, I believe this case may turn on whether Horizon Realty is a public figure. In the landmark case, New York Times v. Sullivan, the U.S. Supreme Court held that some libelous speech is protected by the first amendment. Specifically, public figures who allege libel must prove actual malice in order to recover damages. In Gertz v Robert Welch, Inc., the Supreme Court further defined what constituted a public figure. 418 US 323 (1974). Since Gertz, hundreds of state and federal courts have addressed the issue.

At first blush, I would submit that Horizon Reality may be deemed a public figure, and therefore it must prove actual malice to recover damages against the tenant. In such case, it would be very hard for Horizon Realty to prove the tenant acted with actual malice, and as such the case may be dismissed at the motion to dismiss stage. But, its appears that states have split decisions on whether companies like the realty management here are public figures.

On one hand, a California court found that a real estate developer was a public figure because it participated in a controversy regarding a public ordinance for a building project. Okun v Superior Court of Los Angeles County, 29 Cal 3d 442 (1981). On the other hand, a New York court found that a land sales company was not a public figure for the purposes of discussing a land fraud controversy. Lake Havasu Estates, Inc. v Reader’s Digest Assoc., 441 F Supp 489 (SDNY 1977). Notably, the New York court believed that the land sales company did not seek interviews, nor was it a publicly held company, and was therefore not a public figure.

In this case, one might argue that Horizon Reality is not a public figure (and Horizon should not have to prove actual malice), because it is not a publicly traded company, nor it did not seek interviews or other media attention regarding the quality or fitness of its units. On the other hand, one may argue that Horizon Realty is a public figure (requiring Horizon to prove actual malice), because it is a registered limited liability company in Illinois, subject to similar benefits as publicly traded Illinois corporations.

Notably, Twitter was not a named party to this lawsuit, because it is protected under the safe harbor provisions of the Communications Decency Act (“CDA”). The CDA states that “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” As such, Twitter would not be treated as the party making the statements in connection with this lawsuit, and would likely be protected as an I.S.P.

These materials have been prepared by Winston & Strawn for informational purposes only. These materials do not constitute legal advice and cannot be relied upon by any taxpayer for the purpose of avoiding penalties imposed under the Internal Revenue Code.

The New York Attorney General recently settled with Lifestyle Lift (“Lifestyle”), a cosmetic surgery franchise, over allegations that Lifestyle posted fake customer reviews of its services on its blog and other websites. According to the NY AG, Lifestyle employees were instructed to pose as satisfied consumers and publish positive reviews of Lifestyle’s cosmetic surgery services on various websites, as well as attack posts published by actual consumers that criticized Lifestyle’s services. Lifestyle also created its own websites, which appeared to have been created by independent consumers, to serve as a forum for consumers to share their Lifestyle experiences. In fact, the majority of posts on the website were created by Lifestyle employees and those that were posted by actual consumers were modified by Lifestyle in the company’s favor. In one instance, a fake online journal was created to document a consumer’s experience from first consultation to two-months post-procedure. The journal, which was not created or maintained by one of Lifestyle’s consumers, contained pictures, details such as the names of the consumer’s children and encouraged others to take advantage of Lifestyle’s services.

The AG alleged that publishing consumer reviews without disclosing that the reviews were written and published by Lifestyle and not by consumers constituted deceptive commercial practices, false advertising, and fraudulent and illegal conduct under the New York and federal consumer protection law. Lifestyle’s settlement with the AG’s office includes $300,000.00 in penalties and an agreement that Lifestyle employees will not pose as consumers and Lifestyle will not promote its services online without clearly and conspicuously disclosing that any such comments originate from the company.

Fake blogs and/or blog postings are only appropriate in very limited circumstances, which does not include when a company is making product/service endorsements. Companies should not fictionalize any statements that could be interpreted by the general public as directly representing an actual consumer’s experience with or opinion of the company’s products or services. Companies should either find actual consumers who subscribe to the actual opinion expressed or frame the advertising to clarify that it is the opinion of the company and not any particular consumer.

These materials have been prepared by Winston & Strawn for informational purposes only. These materials do not constitute legal advice and cannot be relied upon by any taxpayer for the purpose of avoiding penalties imposed under the Internal Revenue Code.

It’s always great to hear find blogs by client side marketers.  One such is Dave Knox’s Hard Knox Life.  Dave is currently a Digital Brand Strategist at P&G.  Prior to that, he was a Brand Manager on P&G’s Walmart Team, which means he was in Shopper Marketing.  This is cool because we believe that Shopper Marketing will only increase in importance, particularly for companies that build their brands at retail.

You can follow Dave’s posts on Shopper Marketing here or check out his blog regularly by clicking here.

Oh, and did I mention that P&G is a member of the PMA?