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Social media is not going away. Once thought of as trend, sites like MySpace, Facebook and now Twitter have seeped into our everyday lives.

According to the “Social Media Reality Check” conducted by CNW Group and Leger Marketing in 2009, nearly 50 per cent of users surveyed said they access social media tools once a day. It was also reported that over 60 per cent use social media to research products before purchasing, and one-quarter of users said they feel better about an organization that is engaged in social media.
So what does that mean for companies? If you are not online, you may be losing customers.

“Social media certainly is no longer a fad, probably never was a fad,” said Brian Fraser, partner at Gowling Lafleur Henderson LLP and presenter at the 16th Annual Conference on Advertising and Marketing Law.

“We, as lawyers and certainly as advertisers, need to understand social media and we need to get our heads around all the issues that relate to it.”

From intellectual property rights to privacy concerns, from compliance with a third-party site’s terms of use to disclosure issues — protecting a company’s legal rights when dealing with social media marketing can be difficult to navigate if you’re in unfamiliar territory.
One way to ensure a company’s safety when dealing with legal issues surrounding social media is to ensure a corporate policy is in place before the site goes live, said Ruth Rapoport, assistant general counsel at Unilever Canada Inc.

According to Rapoport, a corporate policy should speak about the planning process of an internet marketing campaign, especially in terms of who in the company has to be involved with the initiative.

“You have to identify in the policy the person who is going to be responsible for its compliance,” she said. “You also have to designate somebody who is going to be responsible for circulating the policy within the company.”

Other issues that need to be addressed in the policy include who will communicate with the users of the site or social media page; who will be monitoring the site and what type of monitoring is needed; how to ensure the content is in compliance with the law and any third-party site’s terms of use; and the IP and privacy rights of the users.

“Also, as with all policies, you want to make sure that relevant people are consulted and that you get the sign-off needed.

“I’ve seen teams work for months and months on policies and forget to consult people who really should have been consulted or they don’t get approval so the policy disappears.”

Rapoport also suggests having a “decision tree” in place, saying it’s a very useful tool when working with social media.

A decision tree gives the site moderator guidance on how to deal with certain situations. For example, if a user posts a comments that contravenes the company’s posting policy, the decision tree would direct the moderator to remove the content.

“It also will identify those cases when [the moderator] would have to go back and run something by legal or corporate communications before giving a response.”

The moderator also needs to be properly trained to not only deal with issues that may arise, but also understand the company’s key messages to ensure branding continuity.

The moderator has “to use the exact language,” said Rapoport. “So you have to impress this on people who are going to be moderating your site or you can get into trouble.”

Moderators are also an important element in terms of ensuring the site’s overall success.

“Somebody has to make sure the site is doing what you want it to do,” she said. “And more importantly, that people are actually paying attention, because it really doesn’t help to have a lot of time, money and effort into something that nobody’s paying attention to.”

Using a third-party site can be enticing for a company looking to promote a brand, product or initiative, especially based on the sheer volume of users and accessibility of sites like Twitter and Facebook.

Viral marketing really takes advantage of the functionality of social media tools to attract high traffic to a company’s site or social media profile.

“What viral marketing does is harness the strongest consumer triggers — it’s the personal recommendation,” said Kelly Moffatt, a partner at Osler, Hoskin & Harcourt LLP and conference presenter.

“The goal of the viral marketing campaign is to create a message, send that message out to part of your target market and then make that message so compelling that your target market feels compelled to forward it on….It really just captures people’s interest so they really do a lot of the marketing for you.”

Viral marketing is based on the idea of rapid multiplication — someone tells two friends, they each tell two friends, and so on.
But, said co-presenter Catherine Bates of Heenan Blaikie LLP, “a tweet isn’t just telling one friend, it’s telling 50, 100, or maybe 1,000.”

Social media tools are “an instantaneous first step that has the potential to go even further on a hugely exponential basis,” said Bates.
But viral marketing really comes with a unique set of legal risks due to its unpredictable nature. The goal of legal counsel is to make sure the necessary steps have been taken to manage and anticipate potential risk associated with these types of campaigns.
One specific risk, especially when dealing with third-party sites, is loss of control of the message, said Moffatt.

“The internet makes it so easy for [users] to forward your message, but it also makes it a lot easier for them to tweak [it],” she said. “So really that creates a risk that both your message and the audience to which it’s going to be delivered is going to become inconsistent or get a bit off-track with what the marketers’ original objectives were.”

Bates agrees, adding, “Once the message has been created, whether you created it or your consumers did, it’s going out there and you don’t know what it’s going to be associated with, how it’s going to be presented or in what context.”

Another issue that may arise when dealing with third-party sites is loss of control over who sees the message, which can expose an advertiser to legal liability.

“Ultimately, if something successfully goes viral, the hope of viral is that it goes to everyone, so you can’t control whose hands the message will arrive,” Bates said. “This raises questions in terms of regulated products, for example, advertising to children.”

Bates points to Québec’s Consumer Protection Act which prohibits commercial advertising to children under the age of 13. She also points to the Canadian Marketing Association’s code of ethics and their special considerations in marketing to children and teens.
“Once it leaves the hands of the advertiser, whose hands will that be forwarded to raises questions as to what the ultimate obligations are of the advertiser up the chain.”

According to Bates, taking steps to show best intentions on the part of the advertiser can help to limit fallout if the content does land in the wrong inbox. Giving guidance to consumers, such as asking them only to forward the message to their friends over the age of majority, is one simple way of demonstrating best intentions.

Loss of control of the medium is also an issue when dealing with third-party platforms, since advertisers really are at the mercy of their terms and conditions.

“Anytime you want to run a promotion on someone else’s platform, you have to be aware that they have control over that platform and they can decide to shut you down,” added Bates. “Sometime that risk may be worth it, sometimes it may not.”

Moffatt suggests that sponsors host contests or other types of marketing campaigns on their own website and use social networking tools to drive traffic to that site, “as opposed to doing it all within the Facebook platform, which obviously leaves you much more susceptible and much more at the mercy of their terms and conditions, policies and decisions.”

User generated content in any internet marketing context can also cause issue in terms of ownership and potential liability.

According to Fraser, “If it’s the advertiser who is soliciting and facilitating comments, it’s unlikely that the advertiser can avoid liability for the content by saying ‘these representations are just made by the consumer — they’re not connected with us.’ That’s particularly true if the site is being moderated.”

Internet marketing campaigns of any type are time consuming and can be costly for the company looking to utilize these tools, especially given the current market conditions.

A successful campaign means ensuring potential legal issues are addressed early in the planning process.

Ultimately, cutting edge technology can lead to cutting edge, exciting and innovative marketing ideas, but user beware — especially in the wild west of social networking.

Details that protect a campaign sponsor can seem straightforward, said Bates, “but in the rush from concept to execution things can be lost along the way.”