Archive for August, 2009
Drafting Reasonable Social Media Policies
Posted by Rob Newman in Marketing Law, Social Media on August 26th, 2009
The Associated Press and the Southeastern Conference (SEC) have both recently been criticized by the media and bloggers for drafting what many commentators have considered to be restrictive social media policies. Given that most companies still have not created social media policies and more companies will be creating these policies in the future, it is important that the drafters of these policies strive to strike a reasonable balance between protecting the company’s interests and employees’ rights.
In June 2009, the Associated Press’ employees union publicly objected to provisions contained in AP’s new social media guidelines. The guidelines provide that employees should monitor their profile pages to delete any material posted by others that violates AP standards. This policy means that employees will potentially be responsible for the content posted by their friends. The policy also prohibits posting material about the AP’s internal operations on personal web pages, regardless of whether or not such material is confidential. In response to these guidelines, the president of the employees union sharply stated that “parts of the policy seem to be snuffing out peoples’ First Amendment rights of expression by a company that wraps itself in the First Amendment.”
Similarly, on August 10, the SEC amended its ticket policy to restrict fans’ use of mobile social media tools while attending SEC games. Specifically, the legal language on SEC tickets was amended to read “No bearer may produce or disseminate (or aid in producing disseminating) any material or information about the Event, including, but not limited to, any account, description, picture, video, audio, reproduction or other information concerning the event.”
Shortly thereafter, the SEC was criticized throughout the blogosphere and mainstream media for creating what was widely viewed to be an overly restrictive policy. As a result of this backlash, the terms of the tickets were quickly amended on August 18 to read “personal messages and updates of scores or other brief descriptions of the competition throughout the Event are acceptable.” SEC Associate Commissioner Charles Bloom aptly stated that “we probably took traditional media rights language and tried to apply it in a new media world.”
These cases demonstrate that it in creating social media policies, companies should be realistic and not overly broad. Of course, companies should create policies that will afford them protection, but it is advisable that these policies also take into account the realities of social media and the nature of individual use of social media tools. To avoid backlash, companies should take care to vet their policies through all relevant stakeholders prior to implementation and should use straightforward and easy-to-understand language in drafting the policies.
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.
FTC Announces New Fees for Telemarketers Accessing the National Do Not Call Registry
Posted by ekabak in Uncategorized on August 18th, 2009
The FTC has announced new fees starting on October 1, 2009, for telemarketers accessing phone numbers on the National Do Not Call Registry. All telemarketers making calls to consumers in the United States are required to download the numbers on the Do Not Call list to ensure they do not call consumers who have registered their phone numbers. The first five area codes are free, and organizations that are exempt from the Do Not Call rules, such as some charitable organizations, may obtain the entire list for free. Telemarketers must subscribe each year for access to the Registry numbers.
The access fees for fiscal year 2010 (from October 1, 2009 to September 30, 2010) are based on the Do-Not-Call Registry Fee Extension Act of 2007. Under the Act’s provisions, in fiscal year 2010, telemarketers will pay $55 for access to Registry phone numbers in a single area code, up to a maximum charge of $15,058 for all area codes nationwide. Telemarketers will pay $27 per area code for numbers they subscribe to receive during the second half of the 12-month subscription period.
Copies of the documents announcing the fees are available at the FTC website or at PMA.This subject will be covered at the PMA Law Conference , Nov,.5-6. in Chicago http://www.pmalink.org/law/
New study redefines role and impact of in-store sampling
Posted by Rob Fields in Experiential Marketing, Promotion tactics, sampling, Shopper Marketing/Retail on August 13th, 2009
As marketers seek every opportunity to get closer to their consumer either online or offline, a traditional “old school” marketing tactic has been proven to be more effective and affordable than ever believed possible.
A new study called R.I.S.E (Report on In-Store Effectiveness) was commissed by PMA member Promoworks and the In-Store Marketing Institute, and conducted by research firm Knowledge Networks-PDI. Results of the study include:
- In-store sampling works—driving trial and sales. The average cumulative trial for the sampled items was +58% over 20 weeks. Sampled items in multiple categories showed an average +475% cumulative sales lift on the day of event.
- In-store sampling impacts sales in ways never thought possible:
- In-store sampling drives additional repeat purchase. The average cumulative first repeat purchase for sampled products was +11% and +6% for the brand franchise over a 20 week period.
- In-store sampling drives sales for existing products and line extensions. The sales lift for the existing product sampled was +177% for day of event and +57% after a 20 week period. The sales lift for the line extension product sampled was +919% for day of event and +107% after a 20 week period.
- In-store sampling drives brand franchise trial and sales. The sampling was found to have a significant impact for the parent brand of the sampled products with +107% average sales lift on the day of event and +21% average sales lift after a 20 week period. The average cumulative trial for the brand franchise was +19% over a 20 week period.
- In-store sampling delivers new buyers – to the sampled items and to the brand franchise1.The average cumulative new buyers for sample products was +85% and +23% for the brand franchise over a 20 week period.
- In-store sampling increases the average household shopping basket size. As a result of the sampling event the involved consumers’ overall shopping basket expenditure increased +10%, as compared to the average frequent shopper basket in the participating retailer. This suggests sampling contributes to incremental growth and does not cannibalize other items within the brands’ own franchise.
- In-store sampling impacts sales long after the day of event, making it incredibly cost effective. By utilizing frequent shopper data, the actual sales impact of the in-store sampling can now be measured. Over the 20-week period, the sampled items saw an average cumulative sales lift of +74%. In-store sampling’s cost effectiveness when applied to all of sampling’s benefits over time is extraordinary.
Tweetstakes Law: Too Many Tweets for Twitter
Posted by Michael Barkow in Digital Marketing, Marketing Law, Social Media on August 13th, 2009
Moonfruit, a. U.K. based online building tech company, recently launched a 10 day sweepstakes in which participants received an entry each time they sent a twitter containing the hashtag “#Moonfruit.” MacBook Pro computers were awarded as prizes and no limits were placed on how often Hashtag Twitter messages could be sent. Viral buzz was over the top, but Twitter pulled the plug on the seventh day after Moonfruit reached the top of the Twitter Trends list. Manatt partner and PMA board member Linda Goldstein talks about what prompted Twitter’s action and what message it sends to other marketers who might find Twitter an effective vehicle to increase consumer awareness.
What exactly did Moonfruit do that so annoyed Twitter?
Goldstein: Twitter never explained, but user comments suggest that many – far too many – received multiple tweets and re-tweets until some thought they were victims of something akin to user generated spam. And Twitter apparently thought that the highly commercialized use of Twitter must be addressed when the viral activity it spawned threatened to replace most other topics of Twitter traffic. So it removed the Moonfruit tag from its Trends list and the search box that aids Twitter users to hunt for topics of interest.
How did Moonfruit respond?
Goldstein: Surprisingly well. It expressed surprise that its campaign was so successful and that it had no intention to dominate Twitter for 10 days or move aside important subjects like Iran from the agenda. In a candid reply by its marketing director, she admitted that the “campaign could set a dangerous precedent” and could lead to an “abuse by marketers.” She was, however, disappointed Twitter had summarily suppressed the Moonfruit tag without notice. Moonfruit would have gladly worked with Twitter to limit the promotion.
Since the campaign was so successful, up to a point, do you think other marketers will follow suit?
Goldstein: Maybe. Although Twitter could also respond to other commercial campaigns that “abused” the Twitter social network, a marketer could, at least for a while, get a massive viral response to a simple sweepstakes if the prizes were attractive enough. The Mac laptops cost, say $10,000, and for that Moonfruit reaped an astonishing 300 tweets per minute. That’s quite a viral response for comparatively little cost. I expect, however, that Twitter, will soon establish some checks to prevent any comparable highly commercial reoccurrence.
What’s your takeaway from all this?
Goldstein: Twitter certainly has the right to edit hashtags to prevent smut and control user spam. After all, it’s a social network and not an advertising forum. And where, as in the Moonfruit game, unlimited entry translated into an abuse that transcended the sometime unspoken etiquette inherent in social communities, Twitter had to act to prevent marketers from “gaming” its system. On the other hand, it’s the Twitter users who actually propelled the campaign forward, so it’s not the total responsibility of the marketer. I suspect that most established brands, however, will act cautiously and not risk a widespread user backlash by consumers who view Twitter as primarily a channel for social networking. In the meantime, Twitter might establish a policy that either embraces viral marketing campaigns or sets forth some guidelines as to what kind of marketing will be permissible going forward.
Case to watch: Class action suit against NCAA
Posted by Mary Reed in Licensing, Marketing Law, sports on August 6th, 2009
An interesting suit to watch in coming months will be the class action filed in late July against the National Collegiate Athletic Association and its licensing arm, the Collegiate Licensing Co.
The suit, filed in the Northern District of California by a putative class of Division I college football and basketball players, alleges that the NCAA has violated antitrust laws by precluding them from receiving compensation in connection with the sale of merchandise using their images after they have graduated from their institutions. At stake is the right of graduates (not current athletes) to receive compensation when the NCAA licenses products, such as video games, that use their images.
The market for collegiate licensed merchandise currently is $4 billion, and while much of that is not the subject of the suit, the suit does challenge the NCAA’s requirement that student athletes sign a form each year relinquishing in perpetuity the commercial use of their images. The release clause apparently was meant to allow the NCAA to use athlete’s names and images to promote its championship games and other events, activities and programs, but allegedly has been more broadly used by the NCAA without compensation to the players. The case is worth watching for those who license footage and other properties from the NCAA, particularly that of historical interest.
The case was filed by former UCAL basketball star Ed O’Bannon and also requests monetary damages for the class. (O’Bannon v. NCAA, N.D. Cal., No. CV-09-3329, filed 7/21/09).
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.
Will The First Twitter Case Be Dismissed?
Posted by Jason Gordon in Blogging & Podcasting, Digital Marketing, Marketing Law, Social Media on August 6th, 2009
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.
Maine Statute creates issues for Industry in Marketing to Minors
Posted by ekabak in Marketing Law, marketing to children on August 6th, 2009
The Maine governor signed into law on June 2 a new law that, starting September 12, will essentially bring the requirements of COPPA to 13-18 year olds that reside in that state, both in the online and the offline world. Under the new law, it will become an unfair trade practice to collect personal information from children under 18 without first obtaining parental consent. Consent must be “verifiable,” defined as “any reasonable effort, taking into consideration available technology” to ensure that the parent receives prior notice of and authorizes the collection of his or her child’s personal information. The law also makes it an unfair practice to engage in “predatory marketing” to kids under 18, defined as, among other things, using a minor’s personal information to market “a product or service to that minor or promoting any course of action for the minor relating to a product.”
The Maine Attorney General is given authority to enforce the law, with potential civil penalties of $10,000 to $20,000 for the first violation, and $20,000 or more for the second or subsequent violation the law. In addition, the new law provides for a private right of action, with statutory damages of up to $250 for each violation. Many are concerned about this law, in particular the private right of action, and fear that it could have serious impact for those who collect information from teenagers online, those who engage in direct marketing to children under 18 (for example
to teenagers between 13-18), as well as those who collect information offline in Maine from children. Several industry groups have indicated that they will be working to delay implementation of the law, PMA is working closely in this area, but as of this writing, no delay has been announced by the state of Maine.
However, this is an evolving situation and we will report very soon again about the efforts undertaken in this area, and the possibility of revision of the statute and the time frame frames therein contemplated.
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