Social Media: Commercial Opportunities and Threats

Social Media: Commercial
Opportunities and Threats
The Internet plays a key role in how consumers purchase products and services. With
over 110 billion minutes spent on social network and blog sites per month, social media
platforms have become an integral part of how people communicate and connect, and
are key places for companies to attract and consolidate their customer base.
Social media has transformed consumer activity in recent years and has created challenges
as well as many opportunities for every business. The prevalence of social media sites
means that businesses need to think creatively about how to market, advertise and protect
their brands. A targeted social media strategy should form an integral part of any business
marketing strategy – even if the strategy is not to engage. Have you got a strategy?
What is social media?
There are many different types of social media platforms which each utilise different
technologies to engage the user and which can be used by companies to advertise,
gather feedback and/or offer customer support.
“Worldwide over 2 billion videos
are viewed a day”
“YouTube is the #2 search
engine in the world”
BusinessInsider.com –
November 2010
MicroBlogs/Blogs – Plurk,
Wordpress, Typepad, Technorati, Tumblr
“Visitors who view
product videos are 85%
more likely to buy than
visitors who do not”
Internet Retailer – April 2010
Livecasting /Streams – Twitter, Presently,
Ustream.tv, Kyte, Vokle, Yammer
“In 2009 31%
of new car
buyers used
YouTube Net
ratings”
‘Gearshift III’ –
October 2009
Youtube Fact Sheet – January 2011
Social Networks – Facebook, Myspace,
LinkedIn, Ning
Location/Reviews –Tripadvisor, Amazon, Epinions
Video – Youtube, Hulu, Boxee
“1 in 13
people on
the planet
actively use
Facebook”
BBC News –
July 2010
“The UK has 26 million
Facebook users”
The Telegraph – July 2010
Pictures – Flickr, iMemories, Windows
Phone 7 App
Wiki/Questions – Quora, Yahoo, Answers.com,
Wikia, Wikispace, Askville
Virtual Worlds – Second Life, World
of Warcraft, Entropia
“Approximately 20% of all tweets contain
reference to a product or brand”
“90 million
tweets are
uploaded
per day”
Techcrunch.com
– September
2010
“There are
over 175
million
registered
twitter users.”
TG Daily –
November 2010
“In 2010 social
video advertising
campaigns
generated over 2.7
billion views”
Visible Measures Blog –
December 2010
The Telegraph – February 2010
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Engaging with Social Media
If a social media strategy is going to form a significant part of a company’s advertising and
promotional strategy, negotiating a deal with the social media platform may be the preferred
approach, but is rarely the reality. Businesses often find themselves having to sign up to the
standard terms and conditions of the social media site as the large social media platforms
are often unwilling to negotiate bespoke agreements. Businesses using a third party site for
corporate purposes should ensure they read the small print carefully.
• Standard terms may grant the social media platform a broad licence to use a
company’s intellectual property, for example, copyright materials or trade marks
which are posted on the site.
Intellectual
Property
• B
e alert to standard terms which take a licence over user data which may
include comments users post on your areas of the site. Standard terms may
restrict the company’s ability to use these comments.
• T
he social platform may stipulate that it has the right to create applications
or software that offer similar or competing features and services to any such
software a company uploads to its site.
Privacy and
Consumer
Data
• C
ompanies wishing to use the personal data of social media users should
ensure that adequate consent has been obtained and a clear privacy policy
is in place to ensure that any use of personal data is compliant with data
protection legislation and the platform’s privacy policy. The use of “friends”
or “followers” data on social media platforms can be particularly problematic
from a data protection perspective.
• S
ome social media platforms may prevent you from using any user data you
obtain through their sites for advertising purposes, even when a user has
consented to its use.
• It is important to remember that information is still “personal data” and
subject to data protection legislation even if it is publicly available on a social
networking site.
• S
ocial media sites may have strict prohibitions on commercial advertising,
marketing or promotions. Any commercial advertising activity requires the
platform’s consent.
Advertising
and
Promotions
• S
ome terms of use may state that the social media site can use companies’
ads and any related content and information for the site’s own marketing and
promotional purposes without consent.
• T
here is unlikely to be any exclusivity. Companies signing up to standard
terms should consider if they are comfortable that there is no protection
against its competitor’s ads being displayed alongside the company’s pages
on a social media site.
It is possible to engage with users on sites without entering into a direct
contract with social media platforms.
Possible
Alternatives
Option 1: Create a page or profile on the appropriate platform, bearing in mind
what IP rights you may be utilising, and then link this through to your own brand
websites where the majority of publishing or advertising can occur.
Option 2: Enter into sponsorship deals or a partnership with another party who
has a strong presence on social media platforms and who is willing to contract
with the platform and comply with the required advertising/promotional guidelines.
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The Good and The Bad
The Good
Speed
Cost
• Social media profiles are relatively quick and easy to set up.
• Companies can correspond with consumers much faster.
• Social media advertising can have an immediate impact on your brand.
• You can turbo-charge your customer service.
• Advertising is relatively inexpensive.
• Social media profiles have low maintenance costs.
Interaction
• Social media allows companies to engage directly with the consumer in
innovative ways.
• Users have more engagement with the brand i.e. like; follow; re-tweet; Digg.
• You can learn more about your customer through direct feedback and
consumer profile information.
Viral effect
• Social media enables consumers to promote your brand independently.
• Key online drivers for brand trust are recommendations from friends,
families and online reviews in the social media space.
• Social media sites enable brands to target a global audience with one advert.
The Bad
Control
• Companies cannot control their message in the same way as through
traditional forms of advertising.
• There is exposure to brand damage through uncontrolled online conversation.
Competitor
advertising
• Companies cannot demand brand exclusivity. Many will not prevent
competitors advertising alongside brand pages, profiles or occupying
the same advertising space.
User terms
• The standard user terms are heavily weighted in favour of social media sites.
Free Traffic
• Social media sites generate revenue from users linking through to their
site. Your brand content contributes to this and yet revenue obtained
from trading off a brand name is not shared.
Hash Tags
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• Certain platforms enable competitors to buy tags associated with
competitors’ names to direct traffic to their own brand.
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Employee Engagement
Social media sites often blur the lines between the professional and personal. Employees can be
brand ambassadors and a powerful tool on social media networks. Every company should create
and implement clear social media guidelines for their employees engaging in social media.
What is your strategy...
Who owns the rights and content of a social media page that you asked an ex-employee to create
to promote your company whilst they were in employment? Would this change if the employee
had created the site independently but trades off your company name?
How can you minimise the risk of employees damaging your brand image or taking advantage of
brand association whilst encouraging them to collaborate and engage virtually?
Policies
• Have you got up-to-date computer use policies that are in line with
developing trends?
• What policies are in place if an employee’s online behaviour on either
professional and/or private social media accounts damages the brand image?
• Can you take ownership of an employee’s social media account when they
leave your employment?
•W
ho owns the content of blogs or social media accounts which capitalise on
your brand association? You? Your employee? The social media site?
Ownership
• What are the different courses of action when the social media content is
generated during the course of employment for a company owned account as
opposed to when content is uploaded onto an employee’s personal account
with some content generated: at home; during work and/or as a result of work
resources/connections?
• Can employees befriend professional contacts through their personal social
media accounts?
Access
• Do you monitor your employees’ usage of professional and/or personal social
media sites and the content they upload? If so, is this stated in contracts of
employment and do your actions comply with the data protection legislation?
Confidentiality
• Are employees clearly restricted from discussing workplace incidents and
confidential information on social media sites both through professional
and private social media accounts?
• Are employees restricted from using your logos or trade marks in personal
postings on social media sites?
Copyright
• Are employees restricted from associating themselves with your company
brand in their own personal profiles?
• Who owns the work created during the course of employment that is uploaded
onto social media sites – whether for work purposes or otherwise?
Liability
Termination
• Are you aware you can be found vicariously liable for any discriminatory
comments your employees may upload onto company sites?
• What can you do if past or present employees publish disparaging
remarks about the company on social media accounts?
5
Risks and Regulations
• Companies can be liable for material published by their employees on blogs
and social networks.
• M
oderating user-generated content can indirectly result in a company exposing
itself to liability for defamatory or infringing content hosted on their website.
• If you want to use social media platforms to run competitions, make sure you comply
with the laws on gambling, competition and promotions.
• C
ompanies can face liability for misleading or deceptive advertising on social media
sites. Ensure any online advertising or brand promotion that is paid-for content or
incentivised in any way, such as a promotional endorsement, is clearly identified as
such so as not to mislead consumers.
• B
e aware of legal risks associated with using an employee’s or prospective employee’s
online profiles as selection criteria or for background checks.
“Social media is just a buzzword until you come
up with a plan.”
Unknown
“Social media is like a snowball rolling down the
hill. It’s picking up speed.”
Jeff Antaya, chief marketing officer of Plante Moran
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Case Study 1:
When there is no strategy
Case Study 2:
When strategy fails
A trilogy of songs uploaded onto YouTube,
by American musician David Carroll,
documenting the repeated poor customer
service he had received from United
Airlines after his guitar was broken during
baggage handling was reported to have
contributed to a 10% fall in the airline’s
stock price (costing stockholders $180
million) which occurred within four days of
his first video being posted on YouTube.
In 2009 Honda created a Facebook fan page
and uploaded photos for its new Crosstour
model in order to generate online buzz.
However the fan page was overrun with
negative comments about the new design,
with one “fan” being overly positive about
it. When it emerged that this “fan” was a
Honda product manager it sparked very
angry responses from other online users and
negative press for Honda.
Case Study 3:
When a strategy shines
Starbucks is often described as the most engaging social media brand – having almost 20 million
fans on Facebook, 1.3 millions followers on Twitter and nearly 9,000 subscribers on YouTube. Its
holistic approach to social media engagement, “My Starbucks Idea” and its blog “Ideas in Action”
are three aspects of Starbucks’ social media strategy that commentators attribute to its success.
“A brand is no longer what we tell the consumer
it is – it is what consumers tell each other it is.”
Scott Cook
“Twitter is like a tragically hip New York night club.
But the experience can be loud and crowded.”
Bob Warfield, CEO of Helpstream
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Key Contacts
Clive Gringras
Geraldine Proudler
Iain Stansfield
+44 (0) 20 7067 3540
geraldine.proudler@olswang.com
Head of Advertising
& Marketing Services
+44 (0) 20 7067 3195
iain.stansfield@olswang.com
Patricia Cappuyns
Sarah Wright
Viola Bensinger
+32 2 235 0302
patricia.cappuyns@olswang.com
+44 (0) 20 7067 3217
sarah.wright@olswang.com
Media, Communications
& Technology, Berlin
+49 (0) 30 700 171 150
viola.bensinger@olswang.com
Christine De Keersmaeker
Blanca Escribano
Elle Todd
Media, Communications
& Technology, Madrid
+34 911 871 924
blanca.escribano@olswang.com
Media, Communications
& Technology
+44 (0) 20 7067 3182
elle.todd@olswang.com
Ashley Hurst
Victoria Gaskell
Anna Soilleux
Head of Internet
& E-Commerce
+44 (0) 20 7067 3189
clive.gringras@olswang.com
Intellectual Property
Intellectual Property
IP and Media, Communications
& Technology, Brussels
+32 2 235 0307
c.dekeersmaeker@olswang.com
Media Litigation
+44 (0) 20 7067 3486
ashley.hurst@olswang.com
Berlin Brussels London
Madrid Munich Paris
Thames Valley Head of Media Litigation
Media, Communications
& Technology
+44 (0) 20 7067 3230
victoria.gaskell@olswang.com
+49 (0) 30 700 171 100
+32 2 647 4772
+44 (0) 20 7067 3000
+34 91 187 1920
+49 89 203 031 300
+33 1 70 91 87 20
+44 (0) 20 7067 3000
Media, Communications
& Technology
+44 (0) 20 7067 3765
anna.soilleux@olswang.com
www.olswang.com