CHAPTER 7

Legal and Regulatory Issues

Singer and songwriter Rihanna tweeted “Listening to ANTI” to her more than 55 million fans. Included with the tweet was a photo of Rihanna wearing Dolce and Gabbana gold jewel-encrusted headphones. The image was retweeted over 175,000 times and received over 284,000 likes. The headphones, which retailed for $9,000, sold out within 24 hours (Wouk 2016). On December 12, 2016, model Hailey Baldwin shared with her 10+ million Instagram followers a photo of her and four famous friends relaxing on a yacht with the message, “work is tough.” The image was part of a promotional campaign for the infamous Fyre Festival—a music festival to be hosted in the Bahamas (Allan and Wood 2020). On the same day, in a collaborative endeavor, approximately 60 celebrity models and influencers posted an orange firelike square to their personal Instagram pages, effectively flooding social media channels (Karp 2017). Bella Hadid’s orange square Instagram post (12.8 million followers) was accompanied by the message “CAN’T wait for #fyrefestival,” a series of emoticons, and a link to the Fyre Festival website. Festival organizers report that this combined effort generated over 300 million social media impressions within a couple of days (Abadi 2019).

Engaging celebrities in sharing positive word of mouth (WOM) with their legions of fans is a popular strategy offline and now online. Marketers are knocking on the virtual doors of A-, B-, C-, and even D-list celebrities to solicit their help in spreading positive WOM. One can only imagine the jubilation in the marketing department of Dolce and Gabbana after the success of Rihanna’s tweet. Equally excited were the organizers of the Fyre Festival.

Celebrity support for a brand can be priceless. It can not only increase brand exposure, but it may also increase sales. However, their support is not always free. In fact, celebrity endorsement often comes with a hefty price tag. Celebrities understand the potential influence they have over fans and they expect to be handsomely compensated. The cost of employing a celebrity to share positive social WOM (sWOM) varies based on their social status and their number of followers. Some celebrities charge as little as $1,000 a tweet, but big names demand and receive more. A post from MMA fighter Conor McGregor costs $169,000. If you can afford a little more, you may want to consider entrepreneur and reality TV star Khloe Kardashian, who commands $598,000 for a single post. Popstar and actor Selena Gomez will often only commit to one sponsored Instagram post per month. But that post could set you back $886,000 (Olya 2021). But what are small-to-medium-size businesses with limited marketing budgets to do? How can they spread positive sWOM?

The answer lies, at least in part, in their ability to harness the influence of noncelebrity influencers (see Chapter 5) and everyday social media users including employees. However, companies face a fine line between encouraging influencers and consumers to share positive sWOM and incentivizing them. And, if that line is crossed, you may find yourself in some legal hot water. This chapter will examine the Federal Trade Commission’s (FTC’s) Endorsement Guidelines and what they mean for marketers who want to embrace and encourage sWOM. We will also discuss the importance of and process of creating a social media policy.

Social Influencer Examples

The best way to begin our discussion on legal and regulatory issues is to offer some examples, each of which highlights a different way in which everyday consumers and social influencers can help spread positive information about brands:

Despite the appeal of these sWOM strategies, each of them suffers from a similar legal problem. To the average social media user, these social media messages (tweets, pins, posts) may appear organic—independent evaluations or support for a product or brand. However, these messages were not created and posted independently. Each of these was a planned marketing promotion, in which the brand or appointed agency incentivized social influencers to engage in sWOM. In other words, a material connection existed between the individual who posted the message and the company, and this relationship was not disclosed to the public. In orchestrating and sharing these posts on social media, the brand and the participating social media users failed to adhere to FTC’s Endorsement Guidelines. Under Act 5 of FTC’s Endorsement Guidelines, these social messages are misleading and potentially deceptive. Such practices can lead to enforcement action by the FTC and substantial fines. So, who is the FTC, what is the extent of their power, how do they determine of if an action is deceptive, and what are the guidelines that you need to follow?

The FTC and Social Media

The FTC is a bipartisan federal agency with the broad responsibility of promoting competition while protecting consumers from acts and practices that may cause them harm. One practice that the FTC monitors is deceptive advertising (Federal Trade Commission 2016a). Here, the FTC’s duty is to enforce truth-in-advertising laws—federal laws that say advertising “must be truthful, not misleading, and when appropriate, backed by scientific research” (Federal Trade Commission 2016b).

An analysis of deception first begins with determining whether a representation, omission, or practice is likely to mislead the consumer. Most deception involves written or oral misrepresentations, or omissions of material information, such as failure to disclose a material connection between an endorser and a brand. The FTC need not determine that consumers are misled to conclude that an act or practice is deceptive (Burkhalter, Wood, and Tryce 2014). The key is “likely to mislead.” The second element is that the representation, omission, or practice must be likely to mislead reasonable consumers under the circumstances. The FTC will evaluate the entire advertisement or transaction, to decide how a reasonable consumer is likely to respond (Dingle 1983). The FTC holds that “reasonable consumers may be less skeptical of personal opinion (i.e., endorsements) than of advertising claims” (Petty and Andrews 2008, 12). Nonetheless, “reasonable consumer” is difficult to define and often leads to protracted litigation (Burkhalter, Wood, and Tryce 2014). The third element is materiality. A representation, omission, or practice must be a material one for deception to occur (F.T.C v. Transnet Wireless Corp 2007). A material representation, omission, or practice is the one that is likely to impact a consumer’s decision-making related to a product (Burkhalter, Wood, and Tryce 2014).

In addition to enforcing these laws, the FTC also educates businesses on how to comply with the law. Educational resources are typically in the form of published guides. One of the guides published by the FTC specifically addresses the use of testimonials and endorsements in advertising. Before we go any further, we should note that the FTC uses the terms “endorsement” and “testimonials” interchangeably for the purpose of enforcing the FTC Act (Federal Trade Commission 2008). The FTC literature that references social media also utilizes the term “advocate” when referring to individuals who deliver endorsements through social media. To keep things simple from this point forward, we will use the term “endorsement” when referring to the act of voicing approval for a brand and “endorser” when referring to those social media users (consumers, social influencers, and celebrities) who are responsible for these social media posts.

The FTC’s Guide to Testimonial and Endorsements was first published in 1975. The purpose of this guide was to ensure that advertising messages were clear and truthful. The growing use of social media for endorsements forced the FTC to revisit these guidelines, and in 2009, a substantially revised version of the guides was published. The need for revision was based on the fact that, on social media, it is difficult to determine whether a relationship exists between the individual posting the message and the brand they have mentioned. In traditional advertising (i.e., television, radio, print), the consumer can readily identify an endorsement message and the endorser’s association with a particular brand. For example, when British actress Keira Knightley appears in a TV commercial or magazine advertisement for Chanel perfume, we understand that she is being paid to appear in these advertising messages. However, when this endorsement appears on social media, it is difficult for consumers to determine if the posting is consumer-generated earned media. In other words, it is difficult to tell if the message was posted by the endorser, independent of the brand, or if the endorser posted it in consideration for some form of payment. The endorsement confusion on social media can be attributed to an individual’s personal account being used to send the message. When an endorsement is shared from a personal account, the typical consumer may not be aware that a relationship, referred to by the FTC as a “material connection,” exists between the marketer and the person who posted the online message—the endorser. The ability to distinguish between an authentic uncompensated endorsement and a paid one may even be more difficult when the influencer is not a celebrity or, unbeknownst to the reader, an employee of the company.

When to Disclose—Material Connection

The key to determining if and when disclosure is required is the presence or absence of a material connection.

Material connections may be defined as any connection between an advocate [endorser] and a marketer that could affect the credibility consumers give to that advocate’s statements. Important examples of ‘material connections’ may include; (i) consideration (benefits or incentives such as monetary compensation, loaner products, free products or services, in-kind gifts, special access privileges, affiliate commissions, discounts, gift cards, sweepstakes entries or nonmonetary incentives) provided by a marketer to an advocate, or (ii) a relationship between a marketer and an advocate (such as an employment relationship) (WOMMA 2012).

The following may help improve your understanding of what constitutes a material connection:

Imagine that you follow a fashion blog. In one blog post (e.g., tweet, status update, or blog entry), your favorite blogger writes a positive review of a particular item of clothing. You, the reader, may feel inclined to take this blogger’s opinion into consideration when deciding to purchase the item. What if you were told that she was paid to discuss and endorse the item, would this alter how you view her recommendation? This incidence occurred with the Lord & Taylor example presented early in this chapter. The department store paid 50 bloggers between $1,000 and $4,000 to promote a particular paisley print dress. Bloggers posted a photograph of themselves wearing the dress on Instagram and other social media sites. These posts reached 11.4 million individual Instagram users over two days and amassed 328,000 brand engagements (Federal Trade Commission 2016c). The dress quickly sold out. A material connection existed between the marketer and the endorser in the form of monetary compensation (Beck 2015a). The social media users who were responsible for sharing sWOM failed to disclose their connection with the band they were endorsing.

In the Fyre Festival example, the event organizers compensated the models and social media influencers for their efforts, but none of them communicated this to their followers. Subsequently, a class action suit was filed against the organizers and 100 “Jane Does” (influencers) for negligent misrepresentation, fraud, breach of contract, and for failing to provide the promised experience (Sass 2017).

The FTC asserts that consumers have the right to know who is behind these sponsored messages, particularly if they could influence their purchase decisions (WOMMA 2014). According to the FTC, regardless of the type of message (e.g., visual or text), each of these sWOM messages was misleading and potentially deceptive.

When a Disclosure Is Not Required?

There are a few scenarios when a material connection does not exist, and therefore, disclosure is not required. The first is when a consumer mentions a product that he or she paid for himself or herself. If the consumer posts about an item he or she purchased and is not being compensated for that post, then a material connection, as defined by the FTC, does not exist (Federal Trade Commission 2013a).

Another instance when it is not necessary to disclose is when the posting is made from the brand’s official account, as was the case with the Sour Patch Kids promotion. Logan Paul, who was recruited for the campaign, was a well-known social media influencer among teenagers. A material connection exists because Paul was financially compensated for his participation in the promotion. But, because Paul posted some of his Snapchat videos from the official Sour Patch Kids account, it is not necessary for him to disclose his material connection. Paul did, however, also post from his personal account. It is necessary to disclose the connection on the posts from his personal account. The FTC contends that one cannot assume that consumers would have seen his posts on the official account and would have been aware of the fact that he was a paid endorser (Federal Trade Commission 2015).

Another common scenario is when a company gives out free samples of a product to consumers, one of whom decides to write a favorable review or comment on social media. Once again a material connection does not exist because the company gave these samples free of charge to many consumers, without any expectation of a favorable endorsement. The focus of the FTC’s Guides is when the company pays or gives something of value to a consumer in return for a favorable mention on social media (Federal Trade Commission 2013a).

Who Is Responsible?

The FTC Guidelines themselves do not have the force of law. However, any practice that is deemed to be inconsistent with or in violation of the guides may result in law enforcement actions. The FTC can and does conduct investigations and has the power to bring cases involving such endorsements under Section 5 of the FTC Act (Unfair or Deceptive Acts or Practices) (Federal Trade Commission 2015). This raises the question, “In the instance of a violation of the FTC Act, who exactly is responsible, the company or the endorser?” If law enforcement is required, the primary focus will be on advertisers, their ad agencies, and public relations company involved. However, the account holder or endorser could also be held accountable (Federal Trade Commission 2013a). For that reason, both brand marketers and endorsers need to be aware of these guidelines. Brand marketers should monitor all posts made by endorsers to ensure that each contains a clear and conspicuous disclosure. Until recently, the cases investigated by the FTC have not resulted in fines. Instead, a series of conditions were imposed on each company. Common conditions include the development of an internal compliance system, submission of regular reports to the FTC to demonstrate compliance—a process to educate social influencers on the guidelines—and a requirement to cut off payments to those social endorsers who fail to comply. These conditions can be and have been imposed on some companies for as much as 20 years (Coffee 2016; Roberts 2016). However, in the case of Teami, in 2018, the FTC had warned the company about the placement of their disclosures. Failure to address this led the FTC to impose a $15.2 million judgment against the company in 2020. The judgment was partially suspended due to the company’s financial condition. In place, a $1 million fine was imposed and warning letters were sent to all of the endorsers (Williams 2020). It appears that the “honeymoon period” when companies were given a warning for their indiscretions is over.

The FTC’s Endorsement Guidelines for Clear and Conspicuous Disclosures

The FTC’s 2009 Guide to Endorsements and Testimonials focuses primarily on when to make disclosures (material connections). In 2013, the FTC released the .Com Disclosures report with updated guidance that now included how to make effective disclosures (WOMMA 2014). Both documents help businesses and endorsers avoid deceptive acts and advocate for clear and conspicuous disclosures. Whereas there is no set formula for creating a clear and conspicuous disclosure, the .Com Disclosures report does provide some guiding principles for marketers to ensure that disclosures are communicated effectively (see Figure 7.1). In evaluating whether a particular disclosure is clear and conspicuous, the FTC offers the following considerations:

Figure 7.1 Guidelines for clear and conspicuous disclosures

Placement and proximity: A disclosure is deemed to be more effective if it is placed as close as possible to the claim it qualifies. For example, if the endorsement is in the form of a tweet or status update on Facebook, the disclosure can be placed at the beginning or the end of the message. Pop-ups, which are blocked on many, but not all (e.g., blogs) social platforms, should be avoided. If the endorsement appears on a blog or personal website, it should be placed on the same page and as close as possible to the claim. If the disclosure is lengthy or the consumer has to scroll down to read it, then the consumer should be alerted via text or through visual cues (e.g., “see below for important information about this post/message”). Hyperlinks disclosures should be avoided for two reasons. First, a hyperlink is likely to take a consumer away from the claim, and therefore, disregards the requirement for proximity. Second, the consumer is often not informed on why it is important for him or her to click on the link. Hyperlinking a single word (e.g., “disclaimer” or “details”) or phrase (e.g., “terms and conditions” or “more information”) within the text may not be effective. These approaches may not alert the consumer to the nature of the information and its significance. As a result, motivation to and the likelihood of clicking on the link and being exposed to the disclosure are reduced. However, on space-constrained platforms, where it is necessary but impossible to include a lengthy disclosure, a hyperlinked disclosure may be used. The hyperlinked disclosure needs to be clearly labeled, using an easy-to-understand language and be sufficiently prominent, so that that it is obvious, unavoidable, and conveys the importance of the information to which it leads (e.g., “Brand Relationship Statement”) (Federal Trade Commission 2013b). Asterisks (*) or other symbols by themselves may not be effective. In summary, hyperlinked disclosures should only be used as an absolute last resort. If the disclosure can be placed in close proximity to the claim, it should be.

Prominence: Each disclosure should be prominently displayed. That is, it should be noticeable to the consumer. The disclosure should be in a font size at least as large as the message. If the platform permits it, the disclosure can be presented in a contrasting color to make the disclosure more noticeable. The disclosure should not be buried in any lengthy text where it may go unnoticed. In the Teami example, endorsers posted a picture of themselves on Instagram holding the product and boasted about the wonderful results the tea had on their well-being. In many cases, these endorsers did include a disclosure (e.g., #teamipartner). However, given the length of the text on their post and the characteristics of the Instagram platform, consumers would have needed to click on the “more” button to read the entire narrative and disclosure. The placement, proximity, and prominence of the disclosure did not meet the FTC guidelines. This could have been easily avoided by placing the disclosure earlier in the posting.

Distracting factors: If the message contains distracting factors such as graphics, sound, text, and so on, the consumer may not notice the disclosure. Therefore, extreme care should be used when adding these features to the message. Avoid all distracting factors.

Repetition: Repetition makes it more likely that a consumer will notice and understand a disclosure. Repetition is particularly important if there are multiple entry points to a website, blog, or video. Consumers must be exposed to the entire disclosure, not just a portion of it. It is insufficient to endorse a product multiple times but only be exposed to a disclosure once. If a consumer is going to be exposed to repeated claims or endorsements, then the disclosure too should be repeated.

Multimedia: In the case where the endorser uses audio claims (e.g., in a video or podcast), then the disclosure should also be offered in an audio format. Video and text disclaimers should be displayed for a sufficient duration for consumers to notice, read, and understand them.

Language: The disclaimer should be simple, straightforward, and presented in a clear language and syntax. Endorsers need to avoid the use of legalese or technical jargon.

Commonly Used Method of Disclosure

The requirement for understandable language seems relatively simple and straightforward—you need to communicate your material connection in layman’s terms. This may be as simple as stating verbally or in text “I received XXXXX for this post,” “This post was paid for by XYZ,” or “Paid for by XYZ.” This language may be appropriate for platforms that do not have message length constraints (e.g., blogs, YouTube), but they are problematic on sites that limit the length or duration of each message. Therefore, marketers need to be creative in crafting succinct endorsed messages (e.g., #PaidAd = 7 characters or #PaidPost = 9 characters).

The FTC offers some strategies to overcome this problem. The FTC suggests that in space-constrained messages, disclosing a material connect may be achieved by using abbreviations such as “Ad” for advertisement and “Paid” for a paid message or post. This is a common strategy on Twitter. See Figure 7.2 for an example of a tweet created to promote the Snickers candy bar. Notice that the inclusion of the “ad” but also consider the placement of the disclosure. Is there a possibility that this could go unnoticed?

Figure 7.2 Twitter disclosure 1

The FTC acknowledges that short-form disclosures may not be adequate for all readers, as some may not understand the meaning of these abbreviations (Federal Trade Commission 2013b). An academic study of 167 Twitter users confirmed that consumers do, in fact, have difficulty understanding the intended meaning of popular disclosures. In this study, researchers examined three commonly used short-form disclosures: Ad (short for advertisement), Spon (short for sponsorship), and Samp (short for sample), and two long-form disclosures—Paid and Endorser. The findings of the study revealed that of the three short-form disclosures, “Ad” was the easiest for consumers to understand. For the long-form disclosures, “Endorser” was the most effective in communicating a material connection between the individual posting the tweet and the brand mentioned in the message. The researchers concluded that full words (e.g., “sponsored”) are preferable to abbreviations (e.g., “Spon”). In the case of long-form disclosures, such as “Paid,” the researchers recommend changing this to “Paid Ad” (Burkhalter, Wood, and Tryce 2014). “Contest” and “Sweepstakes” are other commonly used disclosures when an endorser posts a message in return for entry into a draw.

In addition to using abbreviations, another common strategy is the inclusion of hashtags to attempt to draw the consumers’ attention to the fact that the word (e.g., Ad) is not part of the actual message. For example, it is not uncommon to see #Ad or #Sponsored included in a social post. See Figure 7.3 for an example. In this instance, the endorser has used #ad. But once again, do you think that this may go unnoticed?

Whereas this may be effective in some social media platforms, there are other platforms where hashtags are used in abundance, making it easy for the disclosure to get lost in the post. In such instances, the disclosure may not meet the FTC’s guideline of being prominent. A good example of this is Instagram, where due to the liberal 2,200 character limit, hashtags are used extensively. How quickly can you spot the disclosure in Figure 7.4?

Figure 7.3 Twitter disclosure 2

Figure 7.4 Instagram disclosure

Figure 7.5 Twitter disclosure in caps with parentheses

Even in the Twitter example offered in Figures 7.2 and 7.3, it could be argued that the disclosure is not prominent and may be overlooked. For platforms where there is a strong likelihood that consumers will miss the disclosure, and may not be able to understand, it may be appropriate to create a disclosure using full words, place the disclosure at the beginning of the message, and to use an additional strategy to draw attention to it (e.g., all capital letters or asterisks). See Figures 7.5 and 7.6 for examples. In Figure 7.5, the endorser has posted the disclosure in all caps surrounded in parenthesis. The disclosure is longer, making it easier to understand. Its placement at the beginning of the message helps to draw attention to it. In Figure 7.6, we see a similar approach, except for this time, instead of parentheses, attention is drawn to by the addition of asterisks.

Figure 7.6 Facebook disclosure in caps with asterisks

Figure 7.7 Disclosure as part of the message

Another strategy is to rewrite the message so that the disclosure is included as part of the endorsement copy (Figure 7.7).

Industry Regulations

In addition to the FTC Guidelines for Clear and Conspicuous Disclosures, businesses need to follow guidelines that apply to their industry and profession. There are many highly regulated industries and professions for which there are specific guidelines regarding the use of social media in general and the online endorsements specifically. These include, but are not limited to, the banking and finance, medical, pharmaceutical, and health care industries (Lagu et al. 2008). In 2019 Evolus, the manufacturer of Jeuveau, a rival to Botox, hosted an event in Cancun, Mexico. The company flew top plastic surgeons and cosmetic dermatologists to the Ritz-Carlton to attend an “advisory board meeting.” The doctors were treated to lavish dinners, poolside drinks, and gifts. More than a dozen doctors posted positive reviews of the product on their social media using the company preferred hashtag #newtox. Some of these doctors had over 180,000 followers (Thomas 2019). None of them disclosed that Evolus had paid for the trip. Evolus contended that these posts were not in violation of the FTC rules as “doctors were compensated only for their medical advice.” The FTC disagreed. These doctors were treated to a free trip and gifts and thereby a material connection exists. The absence of disclosures aside, the all-expenses-paid weekend “carried echoes of an earlier, anything-goes era of pharmaceutical marketing that the industry largely abandoned after a series of scandals and billion-dollar fines.” In addition to the policing of the promotion of medical products by the FTC, the FDA (Federal Drug Administration) also requires that all endorsements of products must include at least one approved use of the drug, the generic name of the drug, and all risks associated with using the drug (The Fashion Law 2019).

Employees on Social Media

So far, we have offered examples of celebrities, everyday consumers, and social influencers to endorse brands on social media. You may be wondering, what about employees? If a business encourages employees to talk about the company or individual brands on social media, or has implemented an employee advocacy program, do they need to include a disclosure? The answer to this depends if they are using the official brand account or their personal account. If employees are discussing the company on the company’s official account, they do not need to disclose. However, if they are discussing the company on their personal account, they do need to disclose their connection. There is a material connection between the employee and the company, and not all of the people who see the post from the personal account may be aware of that connection. Even if an employee is answering a question on social media, he or she must disclose his or her connection with the brand (Federal Trade Commission 2013a).

Another commonly asked question is, “What if my employee has his or her place of occupation listed in the bio of his or her Twitter or the About section of Facebook. Is it still necessary to disclose?” To answer this, simply ask yourself, “Do I know the names of the employers for all of my Facebook friends and Twitter followers?” (Answer: You don’t). Therefore, disclosing a material connection in the biographical section of any social media account is an insufficient method of disclosure. Think about what it would take to read an employment disclosure found in a bio. A consumer would have to click on the endorser’s name, which, through a hyperlink, will take him or her to the endorser’s home page where the bio or about sections are located. Most consumers will not take this extra step. As such, the employee endorser should disclose his or her material connection in each post (Federal Trade Commission 2013a). An alternative strategy is to have the employee create a separate account for work purposes with the name of the brand incorporated in the account name or handle, for example, “@DaveFromDell.” In the case of LinkedIn, the name of the employer appears alongside the endorser’s name. However, this does not guarantee that the consumer will read this information, as it may not meet the guidelines for prominence, placement, and proximity. Also, many employees list the parent company name on LinkedIn. The reader may not be familiar with the parent company, and therefore, may not realize that a relationship exists between the endorser and the brand (Federal Trade Commission 2013a). For example, not many people know Sun Capital Partners Inc. is the owner of Boston Markets (restaurant), Hannah Anderson (apparel), and Flamingo Horticulture (consumer goods). The method of the disclosure can vary depending on the social media platform on which it appears (e.g., “Disclosure: I work for XYZ,” XYZ employee), but it needs to meet the requirements for clear and conspicuous disclosures (Castillo 2014).

Platform-Specific Templates

Some social media platforms have created a selection of branded content tools to help businesses build connections, develop partnerships with influencers, and support the FTC’s efforts to ensure adequate disclosure of material connections. For example, Instagram encourages content creators (e.g., influencers) to convert their account to a creator or business account, providing them with access to various tools to help them promote brands. One of these tools helps communicate that a paid partnership exists between the individual and the brand mentioned in their post. When the creator creates a post and tags the brand, the words “Paid Partnership with (brand name)” will appear at the top of the post. See Figure 7.8 for an example. Instagram’s sister platform Facebook offers a similar feature. At the time of publication, other popular social media platforms such as Twitter and Snapchat did not provide this feature. Instagram and Facebook’s inclusion of this branded content tool is undoubtedly a step in the right direction in facilitating transparency. However, it is not a perfect solution. These tools do not currently meet all of the FTC guidelines for clear and conspicuous disclosures. Even though the “Paid Partnership” disclosure is prominent and in easy-to-understand language, it may not pass the placement and proximity test. The disclosure appears at the top of the post rather than close to the claim/endorsement. Readers tend to ignore the top of posts. For this reason, we recommend that content creators include a disclosure close to the content in addition to using this tool (Davies 2020). See the text included in Figure 7.8 (“I teamed up with my friends @chobani …”).

Figure 7.8 Instagram Paid Sponsored Post from account @codyrigsby

Commonly Asked Questions

Admittedly, understanding and adhering to the FTC Guidelines is easier said than done. Also, social media continually presents new problems and situations that test our understanding of these important rules. To help ease you into FTC compliance, following are the answers to some additional commonly asked questions.

Material Connection and Compensation

Q: “Is there a monetary threshold for disclosing a relationship? What if we (the business, for example, a coffee shop) are only offering a ‘token of appreciation’ for an online recommendation or endorsement, such as a free cup of coffee or a dollar-off coupon?”

A: When it comes to material connections, there is no monetary threshold. The key is whether the likelihood that the “token of appreciation” will affect the weight and credibility of the endorsement. One might argue that a cup of coffee is not such a sufficient weight to influence a consumer, but a month’s supply of free coffee may be viewed differently (Beck 2015c). It is both easier and in everyone’s best interest to adopt a consistent practice and habit of disclosing on each platform, regardless of the actual or perceived value of the incentive.

Q: “For a material connection to exist, does there have to a monetary value attached to the incentive? For example, what if I move a customer to the top of a waiting list, invite him or her to a product launch event, seat him or her at a better table in my restaurant?”

A: There does not need to be a financial arrangement for a material connection to exist. In this case, the incentive is a special access privilege. The FTC states that if the customer is offered privileges in return for social media mentions, then yes, there is a material connection, and it should be disclosed (Federal Trade Commission 2013a). Remember, an incentive with no financial value may still affect the credibility of an endorsement (Federal Trade Commission 2013).

Q: “If I offer my customers a discount on a future purchase, or offer to enter them into a draw to win a prize, do they need to disclose?”

A: The customer is still being incentivized to post, and therefore, a material connection exists, and a disclosure should be included. Similar to “tokens of appreciation,” the value of this incentive will determine the importance of the disclosure. The greater the incentive, the greater the importance of the disclosure, and the more likely a business and endorser will come under scrutiny for failing to disclose. For instance, a significant discount or entry into a draw to win a substantial item is more likely to be questioned than one where the discount or prize is very small (Federal Trade Commission 2013a). The challenge here lies at the interpretation of “significant” and “substantial.”

Endorsers/Advocates/Influencers

Q: “I have a well-known spokesperson (noncelebrity) who endorses my product in print ads. Does he or she now need to start disclosing when he or she endorses us through his or her Twitter and Facebook accounts?”

A: The answer to this depends on whether his or her social media followers are aware that he or she already endorses your product. If there is a chance that his or her followers are unaware, then yes, he or she would need to disclose his or her connection in each of his or her posts (Beck 2015c).

Q: “What if the person who endorses my product is a well-known celebrity and has appeared in some traditional advertisements (TV, print, and so on)? If he or she starts mentioning us on social media, does he or she need to disclose?”

A: If the celebrity is a known endorser of your product, then it may not be necessary to disclose the connection when posting on social media. However, if a significant number of the people who follow his or her social media accounts do not know that he or she is an endorser, then he or she will need to disclose (Federal Trade Commission 2013a). Take, for example, a celebrity who is a spokesperson for a regional business appearing only in regional TV and print advertisements. Knowledge of his or her affiliation with the business may be geographically confined to areas where these advertisements air. His or her social media followers may be more geographically disbursed.

Remember, just because some consumers may be aware of the connection between the endorser and the brand does not mean that all consumers are (Federal Trade Commission 2015). An act is considered deceptive if it leads to “a significant minority” (Federal Trade Commission 2015).

Q: I am an influencer, and I often post about products that I paid for and those that I received as a free sample. Do I need to state that how I got the product in my posting?

A: If you are paid for it or the company gave out free samples to a number of its customers, you do not need to state that. The FTC is only concerned about sponsored endorsements—where an arrangement/understanding exists between you and the company that you will mention the product in return for giving you something of value (Federal Trade Commission 2013).

Q: What if I return the product after I have finished using it? Is a disclosure still required?

A: That may depend on the product and how long you had to use it. Take, for instance, having access to a new car for a weekend or an inexpensive home appliance for a month. In both cases, your posting might affect the credibility your readers give to your recommendation. It is safer to disclose (Federal Trade Commission 2017).

Q: I often get products sent to me as “gifts” from various companies. I am under no obligation to post about them on my social media. But if I do post, is a disclosure required?

A: If a reader is likely to think differently about your post knowing that you were given the item for free, you should disclose. Given that it is unlikely that you will know your reviews impact on all those who see it, it would be wise to include a disclosure (Federal Trade Commission 2017).

Q: Do I have to post something about the product for it to be considered an endorsement?

A: Posting a picture or a video could convey that you approve of a product. Words/text is not necessary. Images alone can represent approval. If you have a relationship with the company, then you need to disclose it (Federal Trade Commission 2017).

Q: If I post a picture of myself on Instagram and tag the brand of clothing I am wearing, do I need to disclose?

A: Tagging a brand is considered an endorsement. Don’t assume that because you have tagged the brand, your followers will interpret this to mean that you have a relationship with the brand. They may not. If you have a relationship with the brand, then you must disclose that in your posting. If there is no relationship, then a disclosure is not necessary (Federal Trade Commission 2017).

Q: What if I simply “like” a posting on Facebook or share a link on Twitter?

A: Utilizing the features available on individual platforms such as emoticons, likes, shares, retweets, and links may convey your endorsement. Utilizing these features may be perceived as deceptive if you have a relationship with the company. If you have entered into a relationship with the company then you need to include a disclosure. Advertisers shouldn’t encourage endorsements using these features and influencers should avoid using them (Federal Trade Commission 2017).

Employee Endorsements

Q: Can I recommend or mention products/services that my company offers on my personal social media accounts? My family and friends know who I work for and the name of the company is listed in my bio.

A: First, you cannot assume that all of your followers know the name of your employer. You cannot assume that all of your followers have or will read the contents of your bio. Therefore, you should disclose this relationship. A simple way to do this is by incorporating the disclosure into the message. For example, “the company I work for has a great new product …”

Q: Can I “like” or “share” some of my company’s posts with my social networks without including a disclosure?

A: Similar to a previous example (under influencers) utilizing the features available on individual platforms such as emoticons, likes, shares, retweets, and links may convey your endorsement. As an employee, you have a material connection with the company. Utilizing these features may be perceived as deceptive if you have not disclosed your relationship with your followers. Employers shouldn’t encourage employees to use these features and employees should avoid using them (Federal Trade Commission 2017).

Q: Is “#employee” an acceptable form of disclosure?

A: Not all followers may understand what is meant by #employee or how it relates to the message. A better way of disclosing your relationship is with “#ABC_ employee” or “employee of ABC” (Federal Trade Commission 2017).

How to Disclosure

Q: “Do I need to hire a lawyer to write these disclosures?”

A: If your disclosure is written in clear, easy-to-understand language and avoids legalese and technical jargon, then you do not need a lawyer (Federal Trade Commission 2013a).

Q: “What are some of the phrases we can use to disclose a material connection?”

A: The type and length of the phrase will vary depending on the platform. Aim for disclosures that include full words rather than abbreviations. Disclosures can be presented in all capital letters, contrasting colors, or accompanied by symbols (e.g., #, ***) to draw attention to them.

Q: “I cannot fit a message and disclosure in a Tweet, what do I do?”

A: If there is not enough room, then you should rewrite your message, so that you can include a disclosure. Character or space limitations are not a valid excuse for excluding a disclosure (Beck 2015c). Furthermore, disclosures must be present on all messages, regardless of the device (e.g., computer, tablet, cell phone) used by the intended audience (WOMMA 2014).

Q: What if my message is long and truncated so that you have to click on “more” to read the entire message and see the disclosure?

A: Truncating a long message is a common practice in many platforms including Instagram. If this is the case, the disclosure should appear at the beginning of the message. Followers should not have to click on “more” to locate the disclosure (Federal Trade Commission 2017).

Q: Can I include a hyperlink or button that says something like “Disclosure” or “Legal” which will take the follower to a different location where the disclosure is explained in full?

A: No. Hyperlinks do not meet the FTC guideline proximity. It also does not convey the importance of the information. There is no guarantee that the follower will click on the link and read the disclosure (Federal Trade Commission 2017).

Q: “What if the social media posts are posted in another language. What language should the disclosure be in?”

A: The disclosure is to be presented in the same language as the endorsement (Federal Trade Commission 2013a).

Q: “What is the best way to disclose in a video?”

A: It is advisable to have the disclosure at the beginning of the video. The disclosure can be communicated verbally and appear on the screen in text. It is important that the text disclosure is visible long enough for the viewer to read it in its entirety. When posting videos to platforms such as YouTube, care should be taken to ensure that the disclosure is not obstructed by advertisements. For long videos or even live streams, where viewers can enter and exit a video at any time, it is necessary to include multiple disclosures throughout the video or stream (Federal Trade Commission 2013a). Avoid including the disclosure in the video description as it can be easily missed.

Q: “Do all types of social media posts promoting a brand need include a disclosure? What if the post is a photo or a video without any text, do these need a disclosure?”

A: Positive sentiment and endorsement for a product can be communicated in many ways, including through a simple photograph. Take, for example, the case of Jason Peterson. Peterson, an advertising executive, was reportedly given a first-class ticket to Iceland and $15,000 in cash in return for sharing four images of Dom Perignon with his 300,000+ Instagram followers. In another example, freelance photographer Alina Tsvor shared a photograph of her flight with Chicago Helicopter Experience with her 55,000+ Instagram followers in return for free helicopter rides for her and her friends. In both of these cases, the advocates relied on images to communicate their endorsement. Disclosures should have been included (Mann 2014).

Q: How do I disclose on Snapchat, Instagram Stories, or TikTok?

A: Superimpose the disclosure over the image/video. To ensure the disclosure meets FTC requirements, consider how long the disclosure appears on the screen—how long will it take to read? How much competing text is there—is your disclosure free of distracting factors? How large is the text font and how well does it contrast against the image—is it prominent? Avoid using audio-only disclosures as people often use these platforms without sound (Federal Trade Commission 2017).

Q: Can we incorporate the company name into the disclosure (e.g., #StarbucksAd)?

A: Don’t assume that people will understand the significance of the “ad” particularly when combined with another word. “Starbucks Ad” would be better; “Starbucks Advertisement” is even better. Furthermore, the disclosure component of the hashtag (Ad) may go unnoticed particularly if there is more than one hashtag in the posting. Disclosures must be easy to notice (prominent, free of distracting factors).

Q: “Do product reviews that appear on my company website or websites such as Yelp need to include disclosures?”

A: That depends on whether or not there is a material connection between the consumer posting the review and the brand he or she is referencing. If the reviewer received a benefit or incentive for writing the review, then yes, a disclosure is necessary. If no benefit or incentive was offered then, no material connection exists and the reviewer does not need to disclose (Federal Trade Commission 2013a).

Q: “When an endorser posts on the brand’s official account, does he or she need to disclose?”

A: If the post only appears on the official brand account, then the answer is no. However, if he or she is also posting from his or her personal account, then yes, he or she needs to disclose. Alternatively, he or she can create a separate social media account for these posts where the brand name is incorporated in the account name or handle. For example “@ JoeFromPepsi.”

The importance of complying with the FTC and industry guidelines for sWOM cannot be understated. Your company needs to ensure that all employees and endorsers understand the importance of and appropriate method of disclosure. This information is often documented in your company’s social media policy.

Social Media Policy

The first step to mitigating risk is to develop and implement a social media policy. The next part of this chapter will offer a framework for developing a policy. In the interest of full disclosure, we are not lawyers, and therefore, we recommend that when preparing your policy, you consult your legal department. The framework presented here is offered as a general guide and may need to be modified to fit your company.

What Is a Social Media Policy and Why Do We Need One?

A social media policy is a code of conduct developed and approved by senior management. The purpose of a social media policy is to communicate how the company views social media, and how they will use it in a business context. Guidelines contained within the policy provide direction on how to use social media. These guidelines are often created based on a set of best practices. They protect the company, company employees, and their clients from public relations and legal crises and help the company present and maintain a positive and consistent brand identity. A well-written set of guidelines should also empower employees, providing them with the confidence they need to utilize social media effectively. For the most part, a social media policy is about educating employees to simply use common sense when using social media.

A typical policy will, at a minimum, include information on the social platforms the company has approved for business use, who is authorized to speak on behalf of the company, what content may or may not be posted, how to share content, and general rules of engagement. The following section offers some guidelines on developing a policy.

Developing a Social Media Policy and Guidelines

Step 1: What Is Your Purpose?

The first step is to determine your purpose for using social media. Is social media to be used purely as a marketing communications tool—a tool to inform, persuade, and build relationships with existing and potential consumers—or does it serve a larger purpose? Do you want it to be integrated into multiple functional areas (e.g., HR, purchasing, sales)? Are you striving to be a social business (see Chapter 3)? Clearly articulating your purpose for using social media is like planning a road trip. First, you decide where it is you want to go—why are you using social media? Then, you plan the best way of getting there and what resources and tools you will need (e.g., what platforms you will need, who will use them, what they need to know)? Without a clear purpose, you are likely to develop an ineffective policy. Common reasons for using social media in a business setting include but are not limited to:

1. Increasing brand awareness

2. Strengthening the brand’s reputation

3. Sharing and amplifying stories of success with external audiences

4. Building and strengthening relationships with existing and prospective consumers

5. Listening to and learning from consumers (i.e., marketing research)

6. Engaging with vendors

7. Improving customer service

8. Increasing conversions (i.e., sales, lead generation)

9. Recruiting and retaining high-quality employees

10. Fostering pride among employees

It is likely that your company will have more than one purpose. Articulating your purpose and putting it down on paper will help you to identify appropriate social media platforms and content for your policy.

Step 2: Examine Your Company Culture

The next step, examining your company culture, begins by revisiting your company mission and values. Let these guide your policy-development process. Take, for instance, the Coca-Cola Company’s mission: “To refresh the world; To inspire moments of optimism and happiness; To create value and make a difference.” The Coca-Cola Company’s values include leadership, collaboration, integrity, accountability, passion, diversity, and quality (The Coca-Cola Company 2016a). Their social media policy, which is available in company’s website, embraces the corporate mission and values, encouraging employees to “Have fun, but be smart.” To “use sound judgment and common sense,” to “adhere to the Company’s values” (The Coca-Cola Company 2016b).

Next, consider who will be using social media and the beliefs about social media that exist within your company. Do you have executive buy-in? How do your employees feel about social media? What social media platforms do they use? Are you creating an employee advocacy program? Do you plan to use social influencers? The answers to these questions will help you to determine how detailed your policy will need to be, the amount of education and training required, and who you should invite to be a member of your social media advisory board.

Step 3: Create a Social Media Advisory Board—A Center of Excellence

A Social Media Advisory Board, or if you are looking for a name with little more pizzazz, a Social Media Center of Excellence, is a group of individuals whose purpose is to craft the social media policy and appropriate guidelines. Charlene Li, CEO and Principal Analyst at Altimeter Group, a research and strategic consulting company, contends that the Center of Excellence is a company’s moral compass. The center collectively decides which platforms the company will use, creates policies on how to use these platforms, identifies best practices, and provides training for employees and any third party who may be posting on behalf of the company (e.g., social influencers), and ensures that the brand voice is appropriate and consistent (Hootsuite University 2013). The center should also sample social media posts within and across each of the company’s social media accounts to ensure that the content, language, and tone is consistent with the company’s brand personality and brand voice.

The size and composition of your company’s center should be based on your purpose for using social media (Step 1). For instance, if you are only using social media for marketing purposes, the large majority of your center will comprise marketing employees. If you are a social business, then your center should include representatives from all areas of your business (i.e., HR, Finance, Marketing, and so on). Even if your purpose is restricted to a particular business function, such as marketing, it is wise to have additional representation. An outsider may offer a different perspective, play “devil’s advocate,” and reduce the occurrence of group-think. A center may also include experts (industry and social media) as well as consumers. You may decide to include a member of your legal team to navigate potential legal landmines. However, it is important to remember that legal team is a participant in the process, not the sole driver. If you choose not to add a member of your legal team to your center, you will still need them to review your policy prior to implementation. Above all, when forming your center, it is important to recruit “social-media-friendly” people. Seek out the “social media evangelists,” those individuals who see the value in social media and who will become internal advocates for the policy.

During the early stages of policy development, the center may need to meet on a regular basis. Once the policy has been developed and employees trained, meetings may be less frequent. The work undertaken by the center will also evolve over time. When the policy is first introduced, the center may work as a centralized body, vetting planned social media activities and monitoring online activities. As the workforce becomes more skilled, the approval and monitoring process may become decentralized. The center may only need to meet a few times a year to review and update policies. We recommend meeting at least twice a year.

Step 4: Research

Once the Center of Excellence has been formed, the next step is to conduct research. The research phase involves reviewing existing business policies, researching best practices, identifying potential laws and regulations, and benchmarking against other companies. It is advisable to create a centralized system for posting and sharing information collected. An internal website, Google Documents, or Dropbox folder are all suitable options.

Review Existing Policies

The first step is to determine if there are existing policies in place that address the use of social media in the workplace for business or personal purposes (e.g., HR policies). If policies exist, the center needs to decide whether the existing policies can be amended or whether new policies are required. As social media is integrated into multiple functional areas; it is likely that existing policies will need to be updated. For example, if a business decides to use social media as a recruiting tool, current human resources policies are likely to be impacted and will need to be updated. The new social media policy crafted by the center may reference the use of social media for recruiting; however, the recruiting policies that reside in HR may be silent on social media or offer conflicting guidelines. For this reason, it is advisable to review all the existing policies to determine those that need to be updated so as to avoid conflicting policies.

Best Practices

Social media platforms are constantly in a state of flux. Platforms such as Facebook frequently update their interface and news-feed algorithms to enhance user experience (and maximize revenue). The manner and purpose behind consumers’ use of social media also change over time.

Best practices can be categorized into two areas: rules of engagement and platform approach. Rules of engagement are appropriate behaviors for social posting and engaging with consumers on social media. The mission and values of the business will guide the creation of these approved behaviors, as will the rules of professional communication etiquette. To illustrate, some of Best Buy’s values are respect, humility, and integrity (Best Buy 2020). Best Buy’s social media policy and guidelines call on employees to be smart, respectful, and human. Employees are required to disclose their affiliation with Best Buy, act responsibility and ethically, and to honor differences (Best Buy Social Media Policy 2020). Rules of engagement can also be formulated from a variety of external sources including industry and consumer expectations, published research, social media experts, professional and industry organizations (e.g., WOMMA. org), and societal expectations.

Platform approach refers to appropriate methods of communicating and engagement on specific social media platforms. Approaches to using specific platforms can be general (what type of content can be posted on which platform) or specific (the best days of the week and times of the day to post). Similar to rules of engagement, these approaches are formulated from a variety of sources, including an analysis of those activities that generate the greatest level of engagement of the company’s account (views, positive comments, likes, shares, downloads, and so on) and published research reports (academic, industry, and organizational). Please note that companies often publish an abridged version of their social policy and guidelines on the company website. It is unlikely that this public version of the policy will include how the company will approach each platform. A more detailed document containing guidelines for how employees should use specific platforms may exist offline.

Laws and Regulations

Federal and state laws, as well as industry regulations, may apply to social media. The majority of these fall into three categories: intellectual property, employment-related issues, and marketing activities. A policy will, at a minimum, provide a statement requiring that employees comply with government laws and industry regulations. A list of these laws and regulations is often included. A more robust policy will include details of or links to a detailed description of each law and regulation, with instructions and guidelines to ensure compliance. The closer a company moves toward being a social business, the greater the number of laws and regulations to which the company, their employees, and third parties must comply. Remember to address the FTC guidelines for disclosure of material connections. The Social Media Center of Excellence should seek legal advice on laws and regulations that apply to their industry and social media activities.

Your company is also bound to the terms of service for each social media platform (Facebook, Twitter, and so on) that you use. As such, platform-specific terms of service and policies should be reviewed in advance to identify any potential obstacles (Smith and Russell 2016).

Benchmarking

The task of developing a social media policy and guidelines can, at first, appear overwhelming. But there is no need to reinvent the wheel. There are many examples of comprehensive, well-written social media policies available online. Begin by contacting industry associations for sample policies and guidelines. Next, research competitors to identify the breadth and depth of their social policies and guidelines. Finally, it may be helpful to review the policies of leading corporations, such as IBM, Microsoft, The Coca-Cola Company, Intel, and Adidas, which are available on each company’s website. Keep in mind, the policies and guidelines available online may be an abridged version.

Step 5: Draft a Document and Distribute for Feedback

Drafting a policy is like writing a book. It takes time and multiple drafts to get it right. The first draft may be quite lengthy. Do not worry, remember, it is easier to reduce the size of a document than it is to add to it later. Keep the document simple. Use simple, easy-to-understand language. To reduce the need for frequent updates, try to avoid including information that may outdate quickly. Keep lengthy paragraphs to a minimum and use bullet points to emphasize key points. A draft of the policy should be submitted to your company’s attorney and senior management for feedback and final approval. If the final document is large, consider developing an abridged version for easy daily reference.

The Social Media Policy: What to Include

The following is a brief overview of each section in a typical social media policy.

Policy Statement

Begin by stating the policy. In your policy statement, you should include whom the policy applies to (scope) and the reason for the policy (purpose). If appropriate, you can link the policy to the company’s mission and values.

Approved Platforms

This section will list the social media platforms that the company has approved for official business purposes. These terms of services and policies of each platform should be vetted by the legal department before adoption.

Account Status

There are two categories of accounts, official accounts and unofficial accounts. Official accounts are those accounts approved, created, and managed by the company. A list of and links to all official accounts should be included in the policy document.

Unofficial accounts are created by employees, individual departments, and consumers. These accounts may include your company name or logo but were not vetted by the company, and the content that is being posted to these accounts is not being monitored. To the average consumer, these unofficial accounts may look like authorized accounts. For that reason, your company needs to decide the manner in which they handle these accounts. The policy document should clearly state how the company will address unofficial accounts.

There are three options for managing unofficial accounts.

1. Independence: Allow the account to exist and independently operate. You should carefully consider this option. By allowing these accounts to operate independently, your company has little to no control over the content. This could have negative implications for your company.

2. Compliance: Contact the account holder and encourage him or her to apply for official account status. In this case, the company will allow the account to remain as long as the account administrator abides by the company’s social media guidelines. In return, the company may offer to list the page on the company website and will grant the account administrator permission to use company images and logos. Transitioning an unofficial account to become an official account may be a viable option if the account has a large following and has achieved positive results. Someone within the company will need to be responsible for monitoring the account to ensure continued compliance with company guidelines. If the account holder declines your offer to make their account official or does not respond to your request, you may decide to move to option three—termination.

3. Termination: Contact the account administrator and request that he or she remove all company intellectual property (logos, trademarks, and so on). Also, request that they must clearly indicate on the account (in the bio or account description) that this is an unofficial account and that all posts are made by a specific individual (and include his name). If the account holder fails to comply, you may want to issue a cease and desist letter. You should also file an unauthorized trademark use report with the specific platform.

Legal Issues

The policy document should, at a minimum, include a statement requiring that employees comply with federal and state laws and industry regulations. A list of these laws and regulations should be included. An additional step is to include details of or links to detailed descriptions of each law and regulation along with instructions and guidelines to ensure compliance.

Account Access

The policy document should indicate who is permitted to post on behalf of the company. If employees are required to complete training before being granted permission to post, then this should also be stated.

Account Ownership

There may be instances in which an employee creates a social media account that is granted “official account” status, yet the account was created with the employee’s work e-mail address (e.g., [email protected]), rather than using an administrative e-mail address (e.g., [email protected]). Common sense would dictate that once the account receives an official status that the e-mail address associated with the account would be updated. If this slips through the cracks, it may be worthwhile to include a statement that states that all accounts that have been granted official status are the property of the company. That way, if an employee leaves the company, the account ownership (login) will transfer to the company.

Brand Voice

In Chapter 3, we discussed the importance of humanizing your brand. To convey this personality, you need to develop a brand voice. Brand voice is how that personality is portrayed through communication. Creating a brand voice begins by reviewing the mission of your company to help you identify the appropriate language and tone to use in your social communications. Regarding language choice, you need to decide whether you want your posts to be written using simple or complex words, should the message be serious or fun, and should you include or avoid the use of technical jargon. Another factor related to language choice is the need to establish a consistent message tone. What is the appropriate tone that reflects your brand personality? Is it direct, personal, scientific, fun, sassy, humble, and so on? Communication is certainly not just about word choices. You must also consider the appropriate type of photographs and video. Visual components of the message must be aligned with the brand voice and accurately reflect the brand’s personality. In Chapter 3, we offered the example of Taco Bell. Taco Bell’s brand voice is humorous and wacky. The Taco Bell Facebook page recently contained a post titled “This just happened: I got engaged to a Doritos Locos Tacos.” Accompanying the announcement was a picture of a high school student dressed in a suit proposing to a taco. On Twitter, the company posts visuals, which include funny taco gifs, and pictures of taco t-shirts, all of which support the company’s brand voice. Your company may want to add a brand voice style guide as an appendix to your policy.

Best Practices: Rules of Engagement

When educating employees on how to engage with followers on social media, it helps if you include both specific directions and examples. Following are some suggested, although generic, guidelines that companies may adopt. Please note that depending on the expectations of your figure industry, your company and the laws and regulations that apply to a company may decide to elaborate on each item.

Know the Rules

Before posting content to a company account, make sure that you have read and that you understand the company’s social media policy. Ensure that you are familiar with federal, state, and industry laws and regulations.

Be Yourself

Social media is a great communication and community-building tool—a place where you and your audience can share information, engage with one another, and build and maintain relationships. Write in the first person and allow your personality to show.

Be Respectful

At all times, post meaningful and respectful comments. Do not post negative comments or engage in negative conversations about competing companies. Resist the urge to respond to negative posts. Your engagement needs to be focused and professional, and should aim to add value.

Be Transparent

Be transparent about your affiliation with the company and avoid misrepresentation. If you are endorsing the company or one of their products, ensure that you include a disclosure that meets the FTC Guidelines. If you make a mistake (e.g., share inaccurate information), you need to admit it. Be upfront and quick with your correction.

Maintain Confidentiality

Do not discuss confidential or proprietary information on social media. Do not discuss or disclose business partnerships or employee information on social media.

Respect Proprietary Content

Be respectful of proprietary information and content. Do not use copyrighted materials (print, media, or any other digital files) and intellectual property without first gaining permission from the owner. Also, give credit to the source of this content in your postings.

Best Practices: Platform Approach

People are motivated to use different social media outlets for different purposes. For example, Facebook is popular for communicating with family and friends, whereas LinkedIn is more appropriate for communicating with the company and industry associates. Furthermore, each platform has its nuances that will impact how information is shared. If your company decides to restrict specific communications to particular platforms or has a preference for how that information is presented, then this should be outlined for employees. Platform approach guidelines may be appropriate when a large percentage of the workforce is permitted to post to and engage with consumers on social media. Walmart is an example of a company that offers separate guidelines for Twitter, Facebook, and Instagram (Wal-Mart Stores, Inc. 2016).

Policy Enforcement

In addition to providing rules of engagement, it is also important to explain to employees the consequences of failing to adhere to the policy or follow the guidelines. The severity of the punishment will largely depend on the infraction, ranging from a warning to termination. It is up to your company to decide on the appropriate punishment for a specific infraction. Your human resources and legal department can assist in crafting a statement for inclusion in the document.

Introducing the Policy

Once the policy has been approved by the legal department and senior management, it is ready to be presented to employees and relevant third parties. The manner in which the policy is introduced to the workforce is a function of the size and culture of the company, geographic disbursement of employees, and how social-media-savvy your employees are. The obvious place to introduce the policy and guidelines is during new employee orientation. For existing employees, an alternative strategy will be required. For a small business, a short in-person information and training session may be sufficient. For larger organizations with a more disbursed workforce, a more creative approach may be required. One suggestion is to create a short educational video (Tung 2014). Another alternative is to offer training through a series of webinars.

Whereas a four-minute video or a brief in-person information session may be sufficient for providing a general overview of the policy and guidelines, a lengthier, more detailed training session may be required for those employees authorized to post on behalf of the company (e.g., employee advocates). As an example, the computer and technology company Dell requires employees to undergo a certification process before being granted permission to post on behalf of the company. Dell created their own Social Media and Communications University (SMaC U—pronounced “smack you”) to train Dell employees on the best way to use social media.

Regardless of the method of delivery—in-person, webinar, or video—the best way to develop an informed and skilled social media workforce is not just to tell them what to do, but to show them how to do it. Employees should, in a controlled environment, be given the opportunity to put it into practice what they have learned. A sound training session will use stories and examples to help employees understand the rules. It will also present them with some common scenarios to which they are asked to apply the guidelines they have learned.

To ensure FTC compliance, training should also be provided to endorsers. It is a brand’s responsibility to educate and train all those who represent the brand online. As part of the endorser recruitment process, you should inform all potential endorsers that they are required to disclose their connection with the company in each and every post. You may even want to go as far as specifying the methods of disclosure that you would like them to use. To ensure compliance, you can inform endorsers that the incentive is contingent upon the disclosure being included. You also need to systematically monitor posts to ensure compliance. There should be scheduled review times and consequences for noncompliance.

When outsourcing this activity to an advertising agency, public relations company, or any third party, you should confirm that they will be following and enforcing the FTC Guidelines. Ask for regular reports to verify compliance. Outsourcing your promotional activity to an outside agency will not absolve you of your responsibility to abide by the FTC Act. Refresher training may be required periodically to keep abreast with any changes to the FTC Guides.

Periodic Review

The final step of the process is to periodically review both the policy and guidelines to ensure that they are current. It is also important to revisit the legal aspects of social media. As updates are made, refresher training for all employees will be required. Even if there have been no changes to the policy or guidelines, it is advisable to offer a brief refresher training, perhaps once a year. A short video may be an effective approach.

Copyright on Social Media

We would be remiss if we did not discuss copyright as it applies to social media, particularly ownership of photographs and videos. It is not uncommon or surprising that businesses like to reshare consumer-generated content on their page. Consumer-generated content is often viewed as more authentic and can be more persuasive than company-created content. Posting consumer content on the business’s official account allows for a continuous stream of fresh content at a minimal cost. The challenge is that this content does not belong to the company. It belongs to the consumer and is therefore subject to copyright. Breaching copyright can result in legal action against the business. Here are two examples to illustrate a breach of copyright.

1. Shereen Way posted a photo on Instagram of her four-year-old daughter wearing a pair of pink Crocs sandals. Crocs took the picture from Instagram and featured it in a website gallery of user-generated photographs before asking for Ms. Way’s permission. Eventually, the company did seek her permission—which she did not give. Fortunately for the Crocs company, Ms. Way did not pursue legal action (Murabayashi 2015).

2. On the 2013 anniversary of the September 11 attacks, Fox News personality Jeanie Pirro posted a status update on her Facebook page. The post was Thomas Franklin’s famous photograph of New York City firefighters raising the American flag over the rubble of the World Trade Center on September 11, 2001. Included with the post was the hashtag #NeverForget. The photo owners, North Jersey Media Group, filed a lawsuit against Pirro (Zara 2015). Fox News Network LLC was later added to the suit. In 2016, Fox News and North Jersey Media Group settled (“Fox News, North Jersey Media Group End Lawsuits Through Settlement” 2016).

Image copyright implies image ownership. It is a form of legal protection automatically given to a creator when an image is snapped, saved, or drawn. It applies to photographs, digital art, maps, charts, and paintings. The copyright owner is the individual who takes a picture, records a video, or creates the art. It is not the person who owns the camera or the account owner where the item appears. When a photographer is commissioned, they often retain ownership of the item(s) but permit their client to use them according to the terms laid out in the agreement. If the business uses the content in a manner outside of the agreement, it may breach copyright.

In the case of consumer-generated posts, a company interested in using or sharing an image must seek permission from the copyright holder. If a person took the picture and posted it to their account, they are the copyright owner. But if the photo is taken by one person and posted to another person’s page, then permission needs to be sought from the owner of the image, not the account owner. Just because an image is shared on a public account does not mean that image is in the public domain and therefore free to be used. Gaining permission and assigning credit to the image owner are imperative on social media. So what should a business do if they identify a photograph (or other artwork) posted on public social media and want to share that item on their business page? First, if sharing is allowed on the platform, it’s typically OK to share images within the platform. Retweets, reshares, repins, or posts shared to an Instagram story automatically credit the creator. By using the share button, the owner of the account is added to the posting. For example, if you find a post from a consumer on Facebook that you would like to share with your network, check if the “Share” button is enabled. If it is, when you share it with your network, the original owner’s name will be included in the post, giving them credit. If the “Share” button is not enabled or the platform you are using has no built-in feature that allows reposting, it’s necessary to ask for permission. Reach out to the account owner via direct message or post in the comments section to obtain permission. But be sure to confirm that the account owner is also the owner of the image. Assuming approval is granted, credit the owner by tagging them in the post (e.g., source: @username). Another strategy is to encourage people to post their photos with a branded hashtag. For example, Airbnb asks customers to post pictures of their accommodations on social media along with the hashtag #airbnb. If the company sees a photo they would like to use, Airbnb leaves a comment in the posting asking the account owner to go to a link where they can read and agree to its terms of use. Consumers reply with #AirbnbPhoto to confirm that the company can use the image (Canning 2019).

Conclusion

When we decided to write this book, it was not our intention to provide a comprehensive guide to sWOM. If that were the case, this book would be titled “The Complete Guide to Social Word of Mouth (sWOM).” The reality is that social media is a moving target. As social media grows and evolves and social consumers change the way in which they use social so too will your strategies. The fluid nature of social media makes it challenging to write a book that will stand the test of time, at least for a few years. Instead, we wrote this book to provide you an understanding of sWOM and how you can use it within your company. We included examples of how other companies have embraced social media and sWOM to make connections, enhance their relationships with consumers, create their brand voice and build their brand identity. Although this is the end of our book, it certainly is not the end of your education on sWOM. Indeed, this is only the start of what is sure to be an interesting and hopefully rewarding direction for your company. We hope that this book has provided you with a sound foundation on sWOM and the motivation to begin this important journey. If it has, we encourage you to spread the word. #Share.

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