Service of Experts

June 28th, 2012

Categories: Experts, Lawyers, Legal Advice, Retail, Specialists

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Terri Seligman, Partner, Frankfurt Kurnit Klein & Selz

For marketers and investors, keeping up with social media is reminiscent of staying on top of breakfast orders at a busy truck stop: Organized mayhem. Lawyers in the industry are faced with constantly changing precedents, waiting day-to-day for judicial decisions that could send a client’s project back to the drawing boards even if it’s timed to amplify an imminent product or service launch.

The web and worlds of Facebook and Twitter may seem enormous, anonymous and therefore safe for loosey-goosey interpretations of the law. Wrong. These highways are stomping grounds of the Federal Trade Commission (FTC], state Attorneys General, the Food and Drug Administration and other regulatory agencies and self-regulatory agencies on the lookout for false advertising and product claims.

With mega high jinks missed by some regulatory agencies, such as the Securities and Exchange Commission, [remember Bernie Madoff?], I am amazed how thoroughly the FTC and other agencies patrol and scour the blogosphere, Facebook, Twitter, Pinterest and other social media venues.

terriseligman1I learned more about this recently when New York Women in Communications asked an expert, Terri Seligman, [photos above and right] to share an overview of social media and the law. Seligman is a partner in the advertising, marketing and public relations group of the New York City law firm Frankfurt Kurnit Klein & Selz.

Disclosure is the key for staying on the right side of the law in this Wild West. The questions: how much and how often, about what and when?

terriseligmanwindows-005smallSeligman told us about a fashion retailer who invited bloggers to an “exclusive blogger preview” of spring fashions. They left with bags filled with new products and gift cards worth from $50 to $500. PR execs and marketers have produced such events to generate publicity for eons. So why did the FTC investigate the company?

Seligman explained that some of the bloggers wrote about the fashions but didn’t indicate in their copy that they’d been given the items they reviewed or bought them with gift cards. This placed what the law calls a “material connection” between the fashion chain and the bloggers, a relationship which must be disclosed.

terriseligmanwindows-001smallBut the government closed the investigation without bringing a formal action against the retailer. The FTC was satisfied that the retailer had implemented appropriate procedures for these programs, including having a formal social media policy and posting a wall poster in the event space asking the bloggers to make clear in their posts where they got the products they reviewed. Seligman suggested that to avoid complications in similar instances, a company should take additional measures to reiterate the admonition so that bloggers make their relationship clear. Hearing her, I would suggest that a client of mine note this request in follow-up emails and in press materials prepared for bloggers.

Further, it’s a company’s job to keep its eye on what “its” bloggers write and to ask for appropriate adjustments in copy as necessary.

How and when should a blogger disclose a material connection? Early and often, according to Seligman. The FTC expects the relationship be front and center on even the shortest communications such as 140 character tweets. Seligman suggests the writer use typical hashtag disclosures such as “#paid” or “#spon” on Twitter and to repeat the connection on every Facebook and blog post.

Holly, a friend

Holly, a friend

What does the FTC consider an endorsement that a blogger must disclose? Seligman cited the FTC’s example of a blogger who wrote about a dog food that improved her dog’s fur. If she received and reviewed the free dog food as part of a network marketing program, the shiny fur claim is an endorsement. It’s not an endorsement if the blogger bought the food or got it with a coupon as part of a loyalty program.

There’s far more to learn such as how much monitoring of blogs is a company with a social media program expected to do and what should a company ask bloggers to agree to? Seligman can tell you, and if you’re lucky, you can catch up with her when she speaks again–she addresses organizations all over the country. Meanwhile you can keep up on her law firm’s ad/marketing law alerts at www.fkks.com.

You probably hire a CPA for taxes, a photographer/videographer to cover events and maybe you’ll add social media lawyer for appropriate campaigns. It’s no time for crossed fingers, guesses or guidance from a generalist when your media strategy involves bloggers to review and promote products, sponsored endorsements, contests and sweepstakes run through twitter and the like. What other experts can’t you live without?

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10 Responses to “Service of Experts”

  1. Mervyn Kaufman Said:

    For years, my wife and I have worked with a lawyer/accountant (he must
    be a CPA) at tax time each year, but now that we no longer own
    property, our lives are simpler. We should be able to handle our own
    income taxes…except that both the multi-page form and the language
    it contains are so fraught that I can’t imagine wading through it
    successfully. Nor do I fancy being summoned to a tax audit because I
    filled in a line or two incorrectly. Alas, though, I am not confident
    that Congress (or any Congress, for that matter) will be able to
    simplify the procedure enough to make it possible for me—and
    anyone—to be able to file tax returns easily.

  2. Jeanne Byington Said:

    Mervyn,

    There’s a lobby for everything and everyone and no doubt, accountants/CPAs have theirs. Why would they want to make it simple for people to file a tax return, putting some of them out of business? In fact, I wager accounting is one of the healthiest businesses around these days. If only I could count.

    I haven’t sent packages abroad lately but the last time I did, I found the language on customs forms daunting. Goodness knows who wrote them–I hope that THEY understood what they mean to ask for because the average citizen almost needs a translator.

  3. Hester Craddock Said:

    Preferring the warmth and security of a few good friends and my family, I have chosen not expose myself to the benefits/risks of so called social media. However, I have no doubt that those using this vehicle commercially would be well advised to have an arsenal of experts at their beck and call.

    As Mr. Kaufmann so aptly points out, the public is increasingly the victim of creeping expertise dependence. If we want to sell something, we can’t just do it; if we want to pay our taxes we can’t just pay them; and if we get set sick, we can’t just call a doctor– and thanks to the Supreme Court, it will soon become almost impossible to find a competent one that won’t cost an arm and a leg. In fact, we can’t even die without a bunch of experts being involved.

    A long time ago, a Connecticut farmer in my family was one of the first settlers in Addison County, Vermont, then a wilderness. He was smart, worked hard, and felt responsible for his neighbors’ well-being. They elected him judge of the County Court twenty-six straight years, not because he knew the law – he wasn’t even a lawyer and had never been near a college –, but because he was fair and had common sense.

    It is strongly tempting to believe as I do that we would all be better off if we had far fewer experts. Far more people should be doing productive things with their lives like growing and making things instead of charging fees.

  4. Jeanne Byington Said:

    Yikes Hester,

    That’s what I’ve done much of my life–charge fees or my bosses have done so when I worked for other agencies [though obviously not when I worked for magazines]. You might say that I charged fees even in my first jobs–as babysitter.

    I admire and am envious of those with skills, which is why I am a craft fair/art show junkie and am lucky enough to also represent one of the best producers in the industry where I get to learn more about talented and gifted artisans and artists. But even some of them should call on experts at times, such as website designers and platforms–virtual and real–that help expose their work to larger audiences.

    Do you grow your own vegetables? I tried for years and had to rely on rain–but not too much– during the week and vegetable predators to hate the kind I planted. It didn’t work. My crops were pathetic.

    Meanwhile, I can relax [a bit] when I turn to an expert I trust. Doesn’t mean I leave my brains out of a project–I’m too hands on for that. Chances are the outcome is better when an expert advises and shares his/her experience. I do not like to work with an expert who does precisely what I ask for, who provides no value added counsel. Who needs that?

  5. Martha Takayama Said:

    I understand the concerns over truthfulness in indicating the relationship between a blogger and anything that might seem like an endorsement or paid advertisement in the form of a posting. I do agree that in view of all the subtleties of the manner in which these issues are analyzed it is wise to seek expert advice.

    However fashion magazines in particular seem to contain reviews and editorial coverage in a positive fashion of products in direct proportion to the amount of paid advertising of the same in any given issue. I don’t recall ever being made aware of this relationship formally in any text. Why is this permissible and why is blogging suddenly subject to such scrutiny for conflict of interest?

  6. Jeanne Byington Said:

    What a great question Martha! I don’t know the answer as I don’t do fashion PR. I will see if Terri has an answer.

  7. Lucrezia Said:

    The world would be much better off if there were no experts, most of whom are self appointed or have managed to amass a coterie to spread the word about their guru.

    Scientists are the exception, but interestingly enough, they rarely refer to themselves as such. Guess they’re too busy looking for answers to important questions.

  8. Jeanne Byington Said:

    Lucrezia,

    Terri Seligman didn’t call herself an expert, I did, first because she knows a tremendous amount about a subject [many are unaware of] and second because she was the first to participate in New York Women in Communications’ “Ask the Expert” series.

    It’s just a word.

    If I needed a lawyer to close a business deal I wouldn’t want an intellectual property or real estate lawyer. Doctors the same.

    Life is so complicated today that unfortunately we need the help of experts–not self-proclaimed gurus!

  9. Terri Seligman Said:

    Jeanne – I’m really too crazed right now to compose a thoughtful response. But you (or Martha) may want to get the answer straight from the horse’s mouth, i.e., the FTC.
    See http://business.ftc.gov/documents/bus71-ftcs-revised-endorsement-guideswhat-people-are-asking/

    Here’s a snippet from that page that addresses the question pretty directly:

    “Do the Guides hold online reviewers to a higher standard than reviewers for paper-and-ink publications?
    No. The Guides apply across the board. The issue is – and always has been – whether the audience understands the reviewer’s relationship to the company whose products are being reviewed. If the audience gets the relationship, a disclosure isn’t needed. For a review in a newspaper, on TV, or on a website with similar content, it’s usually clear to the audience that the reviewer didn’t buy the product being reviewed. It’s the reviewer’s job to write his or her opinion and no one thinks they bought the product – for example, a book or movie ticket – themselves. But on a personal blog, a social networking page, or in similar media, the reader may not expect the reviewer to have a relationship with the company whose products are mentioned. Disclosure of that relationship helps readers decide how much weight to give the review.”

  10. Jeanne Byington Said:

    Terri,

    Crazed or no, that is a very helpful answer.

    Like Martha, however, I am skeptical about the practice and wonder if because it’s new, social media is under special scrutiny.

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