Today's Class- Law!

Sometimes it just seems too easy. Give the people what they want by allowing them to actually make it. While reading an article published by Adotas.com on March 17, 2008, I began to question the success and legality of consumer generated marketing. "Consumer-Generated Content Got You BURNED?" by advertising attorney Gonzalo E. Mon, examines the laws surrounding promotions and contests in which consumer generated content is involved.

The article takes a look at Doritos and two of their successful contests that they have run in recent years. In these contests consumers submitted content for a chance to be featured in a Super Bowl commercial. The success of these contests made other products and companies begin to start their own consumer generated promotions. These types of promotions generate great publicity because people are talking about it, visiting the websites, and essentially turning it into a viral marketing campaign. However, not all companies did as well as Doritos and some even ended up in lawsuits. Some marketers fear that they may put to much power in the hands of consumers. The more control the people have the less control the company has. Whichever side you take, there are a few guidelines that must be followed to avoid a legal problem.

The article then goes on to discuss the laws surrounding promotions and contests. A few things I didn't know that I found interesting-

• All 50 states prohibit companies from running chance-based promotions in which consumers are required to spend a cent to participate.

• Although it may be lawful in most states to require a purchase or payment for a skill-contest, there are a number of states with broadly worded statutes (those are state laws- yay I learned something in Legal Environment of Business- thanks Gwen!) that could restrict a requirement.

And then a few helpful hints from the author-

• Evaluate all laws before offering any promotion in which consumers are required to pay money or purchase a product.
• In a contest, it is important to ensure winners are selected on the basis of skill- not chance. This may be easy if the sponsor of the contest selects the winner but can pose a problem when the public votes. Many people vote for their friends, thus throwing off the results.
• To help relieve this problem, Mon suggests to combine public voting with an internal judging process to ensure the fairness.
  
• You can also limit the number of times people can vote to eliminate fraud.
• HUGE THING- Make sure there is a good set of disclosures in the contest rules and advertisements.
  
• Sponsors of consumer generated contests should also clearly state that entrants may not submit content that contains any elements that violate a third party's copyrights or trademarks.
  
• In some cases, screening submissions may be helpful.
• Remove content immediately if consumers post infringing content.

The article also discusses a current news story involving competitors Subway and Quiznos. Subway is attempting to hold Quiznos liable for statements made by consumers, "notwithstanding the protections offered by the Communications Decency Act (CDA)", because Quiznos allegedly encouraged the statements. The CDA grants Internet service providers safety for publishing false or defamatory material as long as that material was provided by another party.

Although I am not a lawyer, and lawyers are probably not reading my blog, I still feel that these issues are important to be aware of. Consumer generated marketing can be a huge success for your brand- IF you do it correctly and legally. Just be aware of existing laws and don't let the public have so much control that you as the company lose control of your brand. That's all for today class- thanks for reading and stay tuned because next time we are discussing environmentally friendly coupons!