The Use of Key Marketing Techniques

1. Presented by Kathyleen A. O’Brien, Dominique Pietz and Todd Mumford
April 21, 2015
7 pm
The Use of Key Marketing Techniques: How to
Reduce Legal Risk
Presentation for ThinkLA
© Reed Smith LLP

2. 2
Speakers
Kathyleen A. O'Brien, Partner
Reed Smith LLP
Tel.: +1 310 734 5268 (Century City, CA)
Email: kobrien@reedsmith.com
Dominique Pietz, Senior Associate
Reed Smith LLP
Tel.: +1 310 734 5215 (Century City, CA)
Email: dpietz@reedsmith.com
Todd Mumford, Associate
Reed Smith LLP
Tel.: +1 310 734 5260 (Century City, CA)
Email: tmumford@reedsmith.com
© Reed Smith LLP

3. 3
Topics We Will Cover
What You Should Know Before Using the Following
Popular Marketing Tools:
o Use of Social Media
o User Generated Advertisements
o Guerrilla and Viral Marketing
What Can Go Wrong?
What Are The Top Takeaways to Reduce Legal
Risk?
Topics
© Reed Smith LLP

4. 4
“In an era of consumer expressions,
seek to facilitate and participate with
communities, not control them.”
-- Joe Tripodi
EVP and Chief Marketing
and Commercial Officer
Coca-Cola Company
Social Media
© Reed Smith LLP

5. 5
Social Media
Actively engage
fans
Monitor the pulse
Create a dialogue
Track analytics
Set the stage for
digital leadership
© Reed Smith LLP

6. 6
DiGiorno #WhyIStayed
DiGiorno launched a marketing
campaign based on the hashtag
#WhyIStayed”
Social Media Gone Wrong
© Reed Smith LLP

7. 7
DiGiorno #WhyIStayed
Unfortunately, #WhyIStayed is a
hashtag about domestic violence
DiGiorno deleted the tweet within
minutes and issued an apology.
“A million apologies. Did not read
what the hashtag was about before
posting.”
Social Media Gone Wrong
© Reed Smith LLP

8. 8
Social Media Gone Wrong
The Delta Giraffe Gaffe
Delta Airlines attempted to congratulate the US on
winning the World Cup Game against Ghana by
posting the following tweet:
© Reed Smith LLP

9. 9
Social Media Gone Wrong
The Delta Giraffe Gaffe
Delta’s tweet used the Statute of Liberty to
represent the US and a giraffe to symbolize Ghana
Unfortunately, giraffes aren’t native to Ghana
Delta issued a prompt apology:
© Reed Smith LLP

10. 10
Key Takeaways
Social Media Gone Wrong
Be sensitive to important social and political issues.
Clear all hashtags, twitter handles, etc.
Consider prompt apology and take down for gaffes.
© Reed Smith LLP

11. 11
Social Media Done Right
© Reed Smith LLP

12. 12
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
© Reed Smith LLP

13. 13
Winning Entry – Doritos “Crash the
Super Bowl” Contest
Advertiser Solicited UGC
© Reed Smith LLP

14. 14
GoPro – Cool Video Contest
GoPro ran a competition where users could submit
a video shot on one of their cameras for a chance to
win $5,000, amongst other prizes
The campaign was well-received by consumers and
helped to promote the brand
Advertiser Solicited UGC
© Reed Smith LLP

15. 15
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).
Advertiser Solicited UGC
© Reed Smith LLP

16. 16
Consumer Generated Video –
Quiznos Challenge
Advertiser Solicited UGC
© Reed Smith LLP

17. 17
#ImAMetsFanBecause
Advertiser Solicited UGC
© Reed Smith LLP

18. 18
#ImAMetsFanBecause
Advertiser Solicited UGC
© Reed Smith LLP

19. 19
Legal Challenges
Key Takeaways
No “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.
© Reed Smith LLP

20. 20
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
© Reed Smith LLP

21. 21
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.
© Reed Smith LLP

22. 22
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.
© Reed Smith LLP

23. 23
Viral Marketing Gone Wrong
The Toyota Matrix “Maniacs”
© Reed Smith LLP

24. 24
Viral Marketing Gone Wrong: Toyota Matrix
Amber Duick, one such nominee, received 9
emails from a fictitious character called
Sebastian Bowler.
© Reed Smith LLP

25. 25
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
© Reed Smith LLP

26. 26
Legal and Business Challenges
Key Takeaways
Before 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?
© Reed Smith LLP

27. 27
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
© Reed Smith LLP

28. 28
Guerrilla Marketing: Gap’s Pants Party
"We did not approve this campaign and it is
not an ad.“ - Tinder
© Reed Smith LLP

29. 29
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?
© Reed Smith LLP

30. 30
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.
© Reed Smith LLP

31. 31
Guerrilla Marketing: Boston Bomb Scare
The LED placards
depicted a cartoon
character called a
“mooninite.”
The placards were
mistaken for bombs.
© Reed Smith LLP

32. 32
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.
© Reed Smith LLP

33. 33
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?
© Reed Smith LLP

34. 34
Testimonials and Endorsements
FTC’s new guidelines apply to endorsements of your
company’s products or services by:
o Celebrities
o Consumers
o 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
© Reed Smith LLP

35. 35
Must make consumers aware when advertiser uses a
paid endorsement
Requires disclosure of any “material connections”
between advertiser/seller and endorser
o Material connection = information that would impact weight
or credibility a consumer gives to endorsement
o 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 incentives
Cash, 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
© Reed Smith LLP

36. 36
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 connection
Speaker’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
responsibilities
o Monitor the communications/ statements/claims
by their agents/endorsers
© Reed Smith LLP

37. 37
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
© Reed Smith LLP

38. 38
Katherine Heigl/Duane Reade
Unauthorized Endorsements
© Reed Smith LLP

39. 39
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
Unauthorized Endorsements
© Reed Smith LLP

40. 40
Arby’s/Pharrell
Unauthorized Endorsements
© Reed Smith LLP

41. Arby’s/Pharrell
41
© Reed Smith LLP

42. 42
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
© Reed Smith LLP

43. 43
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
© Reed Smith LLP

44. 44
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.
Take Steps to Minimize Legal Risk
Top Takeaways
© Reed Smith LLP

45. 45
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.
Take Steps to Minimize Legal Risk
Top Takeaways
© Reed Smith LLP

46. Questions?
46
© Reed Smith LLP