Wide World of Advertising Law - Group Legal Services Association

Group Legal Services Association
Solo, Small Firm, and General Practice Section
2014 Annual Conference
May 1-3, 2014, Las Vegas, Nevada
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The Wide World of Advertising Law A Look at Past Disasters and Future Challenges
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Thursday, May 1
12:30 pm - 1:30 pm
Presenter:
Ed Chansky – Greenberg Traurig
Ed Chansky
Shareholder
Intellectual Property & Technology
[email protected]
Direct: 702.599.8016
Las Vegas
3773 Howard Hughes Parkway
Suite 400 North
Las Vegas, NV 89169
T 702.792.3773
F 702.926.4395
Ed practices in the areas of intellectual property (particularly development, selection,
protection and licensing of trademarks worldwide) and advertising, sales promotion, and
trade- regulation law, including charitable promotions, cause-related marketing,
sweepstakes, contests, gift cards, e-commerce, substantiation of advertising claims,
social gaming and social media, and all aspects of unfair or deceptive trade practices in a
wide variety of industries. A trusted advisor to many national companies, Ed is a
frequent speaker at seminars and conferences on advertising and promotion law topics,
including sweepstakes, premium production, coupon and rebate offers, charitable
promotions, social gaming and social media, and has helped shape state legislation
affecting sales promotion matters. He also works with clients on a wide range of contract
and licensing matters, including agency-client agreements in the advertising and sales
promotion industries, software and website development, and other matters affecting
intellectual property, marketing and electronic commerce. For many years, he worked as
a part-time musician (trombone) playing everything from grand opera to rhythm & blues.
Areas of Concentration
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Intellectual property
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Advertising, promotion and sweepstakes
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Cause-related marketing
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Antitrust and trade regulation
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Internet and e-commerce
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Gift Card and Reward Programs
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Social Media
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Contracts and licensing
Professional and Community Involvement
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Director, Promotion Marketing Association (PMA)
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Member, American Bar Association
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Former Member, American Federation of Musicians
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Former Chair, Connecticut Bar Association, Intellectual Property Section
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Past President, Board of Trustees, The Orchestra of New England
Clerkship
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Ruth I. Abrams, Massachusetts Supreme Judicial Court
Articles, Publications & Lectures
Articles
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Author, "For Goodness Sake: Legal Regulation and Best Practices in the Field of
Cause-Related Marketing," NYSBA, Spring/Summer 2010
Publications
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Contributor, Marketing Law Sections of E-Commerce and Internet Law: Treatise
With Forms, Thomson West, 3d, 2012
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Contributor, Promotion and Marketing Law, The PMA Educational Foundation, 7th
Ed., 2011
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Contributor, Consumer Protection Law Developments, ABA Section of Antitrust
Law, 2009
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Author, "When Enough is Too Much: Excess Compensation for Nonprofit Entity
Executives," Willamette Management Associates Insights, Spring 2007
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Author, "Putting a Coin Slot on the Virtual Jukebox: Copyright Protection in the
Post-Napster World," The Connecticut Lawyer, June/July 2001
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Author, "A Practical Guide to Non-Competition Agreements," Promotion Marketing
Association Law & Business Analysis & Planning Report, February 2000
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Author, "Protecting Your Web Rights," Connecticut Law Tribune, July 26, 1999
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Co-Author, Legal Chapter, Sales Promotion Handbook, Dartnell, 1994
Presentations
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Speaker, "Emerging Issues and Enforcement of Cause Marketing Laws," Cause
Marketing Forum, Chicago, IL, May 2012
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Panelist, "Stars on the Strip: An Insider's Guide to Legal Careers in the
Entertainment Industry," ABA Businss Law Section, Las Vegas, NV, March 2012
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Speaker, "Cause Marketing," The Giving Back Fund Fourth Annual Sports and
Entertainment Philanthropy Summit, Las Vegas, NV, April 2012
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Speaker, "Contemporary Issues in Cause Marketing," American Marketing
Association, San Diego, CA, March 2012
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Speaker, "Hot Issues in Social Media Marketing," ABA Consumer Protection Law
Section Tele-Seminar, February 2012
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Speaker, "Doing Good While Doing Well: Ensuring You Compliantly Integrate
Cause Marketing into Your Campaign, American Conference Institute, New York,
NY, January 2012
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Speaker, "Gaming, Gambling and Pretextual Sweepstakes," Promotion Marketing
Association Marketing Law Conference, Chicago, IL, November 2012
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Creator and Moderator, "Courting Disaster: Mock Trial of Promotional Mishaps,"
Promotion Marketing Association Marketing Law Conference, Chicago, IL,
November 2011
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Speaker, "Social Media for Advertising and Other Forms of Promotion," Colorado
Bar Association, Denver, CO, September 2011
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Speaker, "Cool Legal Perspectives on the Hottest New Trends in Cause Marketing,"
Cause Marketing Forum Non-Profit Summit, Chicago, IL, June 2012
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Speaker, "Companies and Causes," American Marketing Association, San
Diego, CA, March 2011
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Speaker, "Contemporary Legal Issues in Cause Marketing," Cause Marketing
Masters Series Teleseminar, Cause Marketing Forum, December 2010
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Speaker, "Cause Marketing: The How-To Session," Promotion Marketing
Association, Chicago, IL, November 2010
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Speaker, "Ethical Issues and Risks in IP Investigations," Nevada Bar Association
Intellectual Property Law Section, November 2010
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Speaker, "Doing Business for the Greater Good: Legal Regulation and Best Practices
in the Burgeoning Field of Cause Marketing," Association of Corporate Counsel
National Conference, San Antonio, TX, October 2010
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Speaker, "Doing Good While Doing Well: Integrity Charity with Sweepstakes,
Contests and Promotions," American Conference Institute, New York, NY,
September 2010
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Speaker, "What Went Wrong? A Review of Major Promotion Law Disasters and
How to Avoid Them," Promotion Marketing Association Law Conference, Chicago,
IL, November 2009
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Speaker, "Building Brands Bigger than Trademarks: The Halo Effect of CauseRelated Marketing," Ohio Association of Intellectual Property Attorneys, Cleveland
and Cincinnati, OH, September 2009
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Speaker, "Cause Marketing in a New Era," Greater>Than Conference, Portland, ME,
July 2009
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Speaker, "User Generated Content," American Conference Institute, National
Advanced Forum on Advertising Law, New York, NY, January 2009
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▪
Speaker, "Tis Certainly Noble, But What is Cause Marketing and How Can it Really
Make a Difference?" Promotion Marketing Association Law Conference, Chicago,
IL, November 2008
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Speaker, "Copyright Liability for Blogs, Social Networks and Other Service
Providers Under U.S. Law," Insight Internet Law Conference, Vancouver, November
2008
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Speaker, "Best Practices for Cause-Related Marketing," Better Business Bureau of
New York, May 2008
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Speaker, "Non-Profit Partnerships - Regulation of Cause Marketing," City Bar of
New York, May 2008
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Speaker, "PR, Cause Marketing, and Corporate Social Responsibility . . . Doing
Good or Driving Deception?" Public Relations Society of America, Los Angeles
Area Chapter and the USC Annenberg School for Communication, February 2008
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Speaker, "Cause Marketing Legal Workshop," Cause Marketing Forum, New York,
NY, Chicago, IL and Los Angeles, CA, 2004-2009
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Speaker, "Legal Regulation of Cause Marketing," American Conference Institute,
Advertisers’ and Marketers’ Regulatory Summit, Washington, D.C. and San
Francisco, CA, 2007
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Speaker, "Taking Apart a Promotion From Top to Bottom," Promotion Marketing
Association Law Conference, Chicago, IL, December 2005
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Speaker, "Has Intellectual Property Lost Its Mind? The Schizophrenic Struggle Over
Copyright in Cyberspace," Connecticut Bar Association, 2005
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Speaker, "A Movie Tie-in Promotion Gone Wrong," Promotion Marketing
Association Law Conference, Chicago, IL, December 2004
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Speaker, "Legal Issues of Charitable Giving," The Conference Board, 13th Annual
Corporate Community Involvement Conference, New York, NY, July 2004
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Speaker, "Keeping Your Marketers Out of Trouble: An Introduction to Advertising
Law," New England Corporate Counsel Association, Waltham, MA, May, 2004
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Speaker, "Shall We Tango? A 7-Step Analysis Whether to File Under the Madrid
Protocol," Westchester Fairfield Corporate Counsel Association, Stamford, CT,
April 2004
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Speaker, "Cause-Related Marketing: The Law of Commercial Co-Venturing,"
Promotion Marketing Association Law Conference, Chicago, IL, December 2003
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Speaker, "The Death of Copyright: Misappropriation, Trespass and Contract as
Grounds to Protect Non-Copyrightable Content," Connecticut Bar Association,
November 2003
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Speaker and Conference Chair, "Mastering Promotion Law Front to Back,"
Promotion Marketing Association Law Conference, Chicago, IL, November 2002
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Speaker, "The Top 10 Things You Need to Know about Copyright and Trademark
Law," Connecticut Bar Association, May 2002
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Speaker, "Introduction to Legal Regulation of Sweepstakes, Contests and Other
Games, Promotion Marketing Association Law Conference," Washington, D.C.,
December 2001
Education
J.D., cum laude, Harvard Law School, 1987
B.A., summa cum laude, Yale University, 1982
Admitted to Practice
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Connecticut
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Nevada
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U.S. District Court for the District of Connecticut
American Bar Association
GPSolo Spring Meeting
May 1, 2014
Aria Resort & Casino
Las Vegas
THE WIDE WORLD OF
ADVERTISING LAW:
A Look at Past Disasters and
Future Challenges
Edward B. Chansky
Greenberg Traurig, LP
3773 Howard Hughes Parkway, Suite 400 North
Las Vegas, NV 89169
702-599-8016
[email protected]
THE WIDE WORLD OF
ADVERSTISING LAW:
A Look at Past Disasters and
Future Challenges
American Bar Association
GPSolo Spring Meeting
May 1, 2014 — Aria Resort & Casino — Las Vegas
Promotion disasters happen for many reasons. Some arise when the structure or terms of the
offer allow for unanticipated action by consumers. Others arise from errors in execution, such as
a misprint. Still others happen through no one’s apparent fault, like when an offer simply proves
more popular than expected. Finally, mistakes simply happen.
Whatever the cause, there is something to be learned from promotions that have gone wrong.
Not just to understand what happened in the promotion, but also to see how the sponsor dealt
with the situation. The response is often the most important fact. Insurance is also something to
consider.
This presentation summarizes a few of the most famous (and not so famous) examples over the
last twenty-five years. The purpose is not to throw stones or make fun of sponsors who ran into
problems. It is to see what happened, why it happened, how the sponsor responded, and what
lessons can be learned to help prevent and respond to future problems.
We will also look briefly at some of the issues advertisers will face in the future, including with
privacy and “Big Data”.
Kraft “Ready to Roll” (1989)
Facts: On June 11, 1989, Kraft ran ads in FSIs in Texas and Illinois. The FSIs included a game
piece with half the picture of a prize -- a Dodge minivan, a bicycle, a skateboard, or a free
package of cheese. To win, a consumer needed to have two matching halves of a prize picture.
Due to a printing error, the FSI game pieces displayed the “rare” right-side images, not the
intended “common” left-side images. As a result, millions of extra “rare” pieces were printed.
The odds of winning a grand prize minivan dropped from one in 15,160,000 to approximately
1:4. The odds of winning any prize became almost 1:1. Eventually, almost 10,000 claims were
submitted for the minivans alone, each minivan worth $17,000.
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Issue: The rules did not expressly address what to do in the event of a misprint, though they
were perfectly clear on the actual number of prizes available and the intended odds of winning
those prizes. The question is whether Kraft was obligated to give prizes to millions of people
due to its unilateral mistake -- consumers with “winning” game pieces initially thought they were
really winners, even though they soon learned about the mistake.
Response: On June 12, 1989, Kraft announced that the game was terminated. (It had been
scheduled to run through October.) On June 16, an advertisement was run under the title “Ouch”
in which Kraft offered to pay $250 to each person holding matching van pieces, and
proportionally lower amounts to people with “winning” game pieces for the other prizes. Claims
had to be submitted to Kraft and postmarked that same day. Everyone submitting a claim would
also be entered into a drawing with quadruple the number of prizes originally offered (4
minivans, 400 bikes, 2,000 skateboards, and 32,000 packages of cheese. The original prize pool
was worth $63,000. The total offered in extra prizes and cash was about $3 million. Alas, this
was not enough to appease the public. The total value of the prizes that “winners” could have
claimed had the game continued to its conclusion as originally planned would have been in the
hundreds of millions or billions of dollars. A class action lawsuit was filed. In re Kraft “Ready
to Roll” Litig., No. 89 CH 5016 (Ill. Cir.Ct., Cook County, filed July 19, 1989). It eventually
settled in August of 1991, reportedly for $10 million in cash and free food coupons.
Analysis. (1) Procedurally. There was much finger-pointing on how the misprint occurred.
Whatever the cause, a careful process of proofreading and requiring multiple, signed approvals
of the final mechanicals before printing might have caught the problem before it occurred.
(2) Substantively. The rules could have included a provision specifying what to do
in the event of a misprint. Today, it is common to include such a rule. It typically says that the
holders of misprinted winning tickets are entitled to enter a drawing for a chance to win the
number of prizes that were originally offered in the rules. Such rules have been upheld by the
courts (See Daily News case below.) Would insurance apply? Whose? What kind?
(3) Responsively. Given the rules in place for the game, what else could Kraft have
done? They had to shut down the game, didn’t they? What if it had been running in a state
where the rules are registered with the state? Could they have ended or changed the game? (See
License Plate Jackpot discussion below.) What do you think about the “Ouch” ad offer? What
else might you have done? Insurance?
Daily News “Scratch n’ Match (2005)
Facts: The Daily News distributed game cards in the paper and also by mail. There was a new
game card each week for 15 weeks (March 6 - June 19). The weekly game card contained 8
grids of numbers, one for each day of the week, and two for Sunday. The numbers were 1-15.
The Daily News would publish 10 numbers each day in the paper. To play, you would scratch
off the 10 boxes (no more than 10 or your card was void) for that day to reveal a dollar amount
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under each of the appropriate boxes in the grid. If three of the dollar amounts matched, you
would win that amount. On Saturday, March 19, the Daily News published its 10 numbers. One
of them was number 13 (a bad omen). It was supposed to be 12. As a result, thousands of
people believed they were entitled to cash prizes, ranging in value up to $100,000.
Issue. Was the Daily News obligated to pay thousands of extra claims, valued at millions of
dollars? The plaintiffs asserted several tort and contract-based claims. The defense focused on
the following provision in the rules:
In the event of printing, production or other error, or the distribution of an irregular game card occurs,
neither the Daily News, LP, D.L. Blair, Inc., their affiliated companies and agents shall not have any
liability. If due to a printing, production or other error, more prizes are claimed than are intended to be
awarded for any prize level per the above, the intended prizes will be awarded in a random drawing from
among all the verified and validated prize claims received for that prize level. In no event will more than
the stated number of prizes be awarded.
Response. The Daily News stood by its rules, even in the face of significant negative publicity.
(The rival New York Post reported heavily on the error and the resulting litigation.) It allowed
anyone with a “winning” game ticket to enter a drawing for a chance at the proper number of
prizes as specified in the rules. Focusing on traditional contract law, the court enforced the rules
as a binding contract. Theories based on negligence, or sympathy for consumers who thought
they had won a prize (despite the clear provisions of the rules and a requirement for all claims to
be validated) were rejected. The relationship with the public was contractual. (Consumers
“accept” the contract by participating in the game.) The sponsor did not violate the contract.
Motion to dismiss the complaint granted. Greenwood v. Daily News, L.P., 4292/05, 2005 Slip
Op. 50885 (U) (June 7, 2005); Diop, et al v. Daily News, 13777/05, 2006 Slip Op. 50671 (U)
(February 27, 2006); Sargent v. N.Y. Daily News, 42 A.D. 3d 491 (2d Dept. 2007).
Analysis. (1) Procedurally. As in Kraft, a more thorough and double-checked process of
confirming the printing mechanicals could have helped.
(2) Substantively. The rules had the necessary protections and ultimately carried the
day, though the court did suggest that had the plaintiffs properly pled theories of intentional or
grossly negligent misconduct, their cause of action might have survived the motion to dismiss.
Query: Would the same be true today under the enhanced pleading requirements required in
Bell Atlantic v. Twombly, 127 S.Ct. 1955 (2007)?
(3) Responsively. The sponsor stood its ground and prevailed. What else might it
have done? Would anything else have made sense? For public relations reasons?
BP “License Plat Jackpot” (1989)
Facts. Each week for eight weeks, in thirteen different states (hmm, 13 again . . . ), a new poster
was posted in gas stations. The poster was different for each state. It displayed 501 actual
license plate numbers issued to cars in that state. Five hundred of the numbers were small. If
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your license plate matched one of those numbers, you could claim a $15 prize. One number was
large. If your license plate matched that number, you could win a new BMW. DMV and Law
enforcement personnel with access to license plate records were not eligible to participate.
Two things immediately went wrong. First, police in many states saw the large numbers and
called the owners of those numbers to alert them to claim their BMW prizes. Second, clever
individuals in some states realized that plates would transfer with the sale the car. These persons
found the owners first (sometimes by legal means, sometimes not), and purchased the cars from
the unsuspecting owners in order to then claim the BMW. One of the clever contestants found
the owner of a car in Alabama using public tax records (legal). He knocked on the owner’s door,
concocted a story about having once owned a similar car and wanting to buy one like it for his
daughter who was going to college, inspected the car, and then negotiated the owner down from
$1,000 to $650 to purchase the car. He then claimed the prize for that week in Alabama.
Issue. The sponsor was upset at how the intent of the game had become subverted by the “Robin
Hood” acts of the police, as well as the sharp practices of the people who were buying cars from
unsuspecting owners. Did the sponsor have to reward the Alabama buyer? And could the
sponsor change the game (registered in Florida) to cure the problem for the later weeks in the
promotion?
Response. The sponsor first changed the format of the posters to list all 501 numbers in the
same size. The big winner was no longer obvious. Instead, all winners had to submit written
forms to claim a prize. The Florida Secretary of State (the appropriate authority at the time)
accepted this change to the rules and the poster, acknowledging that the integrity of the
promotion had been compromised; the sponsor still offered exactly the same prizes and odds to
the public. The sponsor then brought a declaratory judgment action against the Alabama buyer.
The sponsor relied on a provision in the rules saying that prize claims and materials were void “if
not obtained legitimately.” The buyer replied by alleging that the sponsor and its judging agency
were acting in bad faith to deny his prize claim. The trial court granted summary judgment for
the sponsor. The buyer appealed. The Alabama Supreme Court remanded for consideration of
the issue of bad faith, and also expressed doubt whether the buyer did anything wrong, framing
the issue as one of mere non-disclosure by the buyer, not affirmative misstatement. Johnson v.
BP Oil Co., 602 So.2d 885 (Ala. 1992). The sponsor then awarded the car.
Analysis: (1) Procedurally. Was the poster format a good idea in the first place? It created
excitement. But it also created the incentive for unwanted activity. Would the amended version
have solved the problem from the beginning?
(2) Substantively. How many of you knew that a license plate would transfer with
the sale of a car? How about requiring ownership as of the first day of each week? Would there
still be security issues of the numbers getting leaked out early? Would that risk be more
acceptable?
(3) Responsively. What do you think about suing a contestant on such tricky facts
(buyer’s failure to disclose superior knowledge vs. affirmative misstatements to mislead the
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seller)? What else could you do to show your disapproval of the transaction? Award an extra
car to the seller? How about the change made to the posters and rules during the promotion?
Hoover Vacuum Offer (UK 1992)
Facts: In exchange for the purchase of any product costing £100 (about $190 at the time) or
more, consumers could claim two round-trip tickets to the U.S. The value of the tickets far
exceeded the cost of the cheapest vacuum. Sales soared. So the did the redemption rate for
tickets. The sponsor reportedly had relied on very tight deadlines and strict claims procedures to
keep down the redemption rate, along with an expectation that many travelers would pay for
costly “extras” when booking with the travel agent. Those things didn’t happen. People knew a
good thing when they saw it.
Issue: How could Hoover avoid a crushing financial burden from its own offer?
Response: Hoover played hardball as much as possible with every claimant, carefully enforcing
deadlines for claiming flights, refusing claims when chosen travel dates weren’t available, and
setting very short deadlines for selection of alternate dates. It didn’t work. People got angry and
sued. The results in the cases were mixed. Hoover wasn’t denying responsibility to award trips;
it just was making it as hard as possible for consumers to claim their trips. The decisions varied
depending on the specific facts of how a consumer was treated. The bigger issue was the
ultimate award of about 220,000 trips at a reported cost of £48,000,000. The company lost
money. Executives lost jobs. The company (Hoover UK) got sold.
Analysis: (1) Procedurally. Did anyone do the math upfront? There reportedly were warning
signs from an early stage of the promotion offering trips only to Europe. Could the offer have
been terminated before rolling it out to include the U.S.? How do you rescind an offer once it
has been published?
(2) Substantively. The offer was simply too rich. All the tight deadlines and
conditions in the world wouldn’t stop people from getting a good deal. How about contingency
insurance? Would it have been available? Would an underwriter have issued a policy? Would a
refusal to grant coverage have signaled to Hoover that the offer might be flawed?
(3) Responsively. The company honored the contract. But it did so in a strict
manner that won them no points in the court of public opinion. What else could they do? Just
smile while the company went bankrupt? Didn’t this one have to be solved before the problem
got so big?
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KFC Grilled Chicken (2009)
Facts. In some ways like Hoover, the heart of this problem was higher-than-expected
redemption. An online coupon entitled consumers to a free meal of KFC’s new grilled chicken.
The offer was promoted on May 5, 2009, on Oprah Winfrey’s TV show. It was valid for a very
limited time. The coupons were a simple PDF printout. The offer caught on like wildfire. KFC
franchise restaurants were besieged with customers looking for free meals. The demand was too
much. The restaurants quickly ran out of the grilled chicken. The crowds got angry.
Issue. How do you deal with an over-subscribed offer?
Response. KFC quickly shut down the original offer and posted a message on the company web
site offering a rain check. Anyone with a coupon could go to a restaurant, complete a rain check
form, submit it with the coupon, and receive a coupon for the grilled chicken meal at a later date,
plus a free Pepsi as an extra bonus. A TV commercial repeated the same offer. Many were
satisfied. Others weren’t. A multistate class action was filed alleging that the whole promotion
was an elaborate “bait and switch” scheme to get people to come to the restaurants without any
intention by KFC to honor the terms of the coupons, which survived a motion to dismiss, In re
Kentucky Grilled Chicken Coupon Marketing & Sales Practices Litigation, No. 09-C7670 (MDL
2013), N.D. I11, July 8, 2010 (denying motion to dismiss), and was later settled for payment of
$3.99-$15.96 per plaintiff.
Analysis. (1) Could the coupons have been distributed in a different manner that might have
limited the number of them more easily?
(2) Would any limiting terms have been possible on the coupons? Or possibly
making them valid only on different dates? Is “while supplies last” good protection? How much
inventory do you need to have on hand when you offer a premium or gift?
(3) How about the response? Could the company have done anything different?
What advice would you have given?
Pepsi Stuff Harrier Jet (1996)
Facts. The “Pepsi Stuff” promotion offered merchandise in exchange for points. The points
could be collected by purchasing products, and they could also be purchased for 10¢ each. Most
of the merchandise was typical: baseball caps, jackets, etc., for anywhere from 50 to 100 or
1,000 points. A TV commercial lightheartedly showed such items, but also a harrier jet with the
legend “7,000,000 points.” It was intended as a joke. But one claimant took it seriously,
borrowed $700,000 dollars, and submitted a claim for the military plane worth $23 million.
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Issue. Was it a binding offer? Did Pepsi have to deliver the plane? The claimant said it was a
contract. Pepsi said it was merely an advertisement, not a contractual offer, and that it also was
clearly a joke not meant to be taken seriously.
Response. After the claim was submitted, Pepsi first changed the ad to increase the number of
points required for the Harrier jet to 700,000,000. It later added a super that said “Just kidding.”
But Pepsi stood its ground, denying the claim on grounds there was no contract, and that no one
could take the joke ad seriously. Summary judgment for defendant on grounds that (a) there was
no contract, just an ad, (b) the ad was clearly a joke, and (c) the statute of frauds was not satisfied
because this contract for goods over $500 was not in writing signed by both parties. Leonard v.
Pepsico, Inc., 88 F.Supp. 2d 116 (S.D.N.Y. 1999).
Analysis. (1) Is it a good idea to joke about the terms of an offer? Maybe about something else
in the ad? How clear does the joke have to be?
(2) When does an advertisement become an “offer”? What’s the difference? How
about the statute of frauds?
(3) Do you think the ad was clearly enough a “joke”?
Malibu Rum and Chipotle Mexican Grill
Both promotions highlight cautionary issues for user generated content (UGC).
In Malibu, the sponsors announced the winner before the contest was officially over. New
videos got posted alleging fraud and conspiracy. No legal actions followed, but the
embarrassment was significant. Moral: Follow your own rules carefully, they are a contract that
will be construed against you, the party who drafted them. Also, from a PR perspective, entrants
are passionate about their UGC!
In Chipotle, photos and/or videos were required to contain only original content and no material
owned by third parties. The sponsor assigned a person to review the entries before allowing
them to be posted on the web site. The reviewer didn’t always recognize persons in the
submissions, even though some were quite famous (albeit to a different age group). Moral:
Multiple sets of eyes (representing different cultural and/or demographic perspectives) are
important. Set up a thorough review procedure and stick to it.
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Privacy & Data Security
- The New Frontier Target and Niemen Marcus recently made headlines as the victims of data-security breaches.
Even though third parties broke into their systems, however, the merchants may wind up paying
the price, both in terms of bad publicity and also theoretically under various theories of
negligence for not implementing adequate data-security practices. Lawsuits over the adequacy
of data protection are definitely something marketers need to keep an eye on going forward.
For now, the act of gathering sensitive data – and the frequent lack of transparency for
consumers – is where much of the debate currently is raging for marketers.
Privacy law in the U.S. remains largely based on the principal of informed consent rather than
government-imposed restrictions (except in a few cases for sensitive financial, health and childrelated data). But the growing complexity of “Big Data,” plus often hard-to-understand (or even
find) privacy policies and opt outs (if they even work) are concerns being addressed by the FTC,
state governments, and industry.
See the reports and guidelines in the materials for best practices for privacy relating to mobile
apps, behavioral tracking, and the “internet of things” to catch a glimpse of where the law is
heading.
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