ReactS : Advertising Lawyers & Attorneys : Reed Smith Law Firm : Marketing Regulations, Product Placement

It comes as no surprise that the Office of Fair Trading, (OFT) has confirmed that on line marketing and PR practices that do not disclose the fact they include paid for promotions are deceptive and a breach of the Consumer Protection regulations, (CPRs). ReACTS has been advising marketers to beware for some time about such practices, and the issue is covered in our Ad Guide on Social Media.

The latest announcement comes as the OFT investigated a company called Handpicked Media and found that it had broken rules of disclosure by purchasing  blogposts and tweets for sponsored promotions without disclosing the fact clearly. While the OFT may not wish to instigate a clamp down on this sort of activity itself  but the ruling underlines clearly the law in this area and strengthens the hand of the ASA when it takes over self regulation of promotional messages on the Internet in March 2011.

In its press release The OFT's has now stated unequivocally that  " We expect on line advertising and marketing campaigns to be transparent so consumers can clearly tell when blogs, posts and microblogs have been published in return for payment or payment in kind. We expect this to include promotions for products and services as well as editorial content.'

There are hundreds of sponsored blogs, tweets, viral films, and use of brand ambassadors which hide the fact that these individuals are being paid to comment on products and services. Being transparent is crucial to protect the reputation of your brand and ensure compliance with the law.  

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This month Apple starts to roll out its iAd mobile ad network in Europe. The service will go live in the UK first, with launches in France and Germany early next year and other countries throughout 2011. European launch partners will include Renault, Nespresso, Citi and Evian. iAd will offer advertising inside apps initially on the iPhone and iPod Touch with plans to incorporate the iPad in the future.

iAd launched in the US earlier this year and Apple estimates 21% of the total US mobile ad spend for the second half of the year will be spent on iAd campaigns. The Wall Street Journal has painted a more downbeat forecast. It claims that only 2 of the 17 launch partners in the US (Nissan and Unilever) managed to run campaigns in July, with only three more running campaigns in August. Some of perceived reasons behind such a low initial take up is the cost of approx “£600,000 plus per campaign” and, Apple’s “tight control on the creative aspects of ad-making”. These requirements mean only the most “determined and richest brands” can afford an iAd campaign. Agencies and brands have called for the cost of a campaign to be reduced to around £100k and for more tracking data to be provided. Currently “you have to trust the data Apple send you”. It remains to be seen whether Apple will loosen their control or if their rivals will be able to capitalise on this. Google’s AdMob and Millenial Media are believed to have adopted a more flexible approach, varied their prices to brands and allowed advertisers to run “test campaigns”.

Despite these teething issues, iAd has received positive feedback from Nissan, who reportedly spent $1m on a campaign for the Leaf, their new electric car. The company claimed their iAd campaign had “five times the clicking through rate of their normal online campaign”. Only time will tell if iAd will dominate the mobile ad market. However, as brands and agencies embrace this growing market it is essential that they ensure that their campaigns are delivered effectively and efficiently.

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At last, common sense has triumphed with the Information Commissioner's Office (ICO) issuing a press release confirming that the Data Protection Act 1998 does not prevent family and friends from taking photographs at school concerts or plays this Christmas, but that doesn't mean little Johnny can appear in the next sweetie ad!

The ICO emphasised that photographs simply taken for the family album were exempt from data protection laws. The revised guidance for schools and local authorities gives advice on taking photographs in educational institutions, and explains that the Act is unlikely to apply in most situations where photographs are taken by parents in schools. What advertisers need to realise is that while the UK does not have image rights as such, therefore allowing the use of people's image in advertising without consent in certain circumstances, the use of children's images in a commercial context is extremely risky and unwise. This advice may seem like common sense too but image rights and 'rights to publicity' are a complex legal area.

For information on the use of celebrities and ordinary folk as well, please see our Guide.

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Ordinary Joes, footballers and even members of the clergy have all got themselves in hot water when making comments on Social Media sites. Twitter is on course to have 200 million users by the end of 2010. There are currently over 50 million tweets of 140 characters or less each day. However, as multinational corporations, advertisers and members of the public embrace this service, a note of caution should be sounded. Paul Chambers’ lawyers are currently preparing an appeal following his conviction for “menace”, after he tweeted “Cr*p! Robin Hood airport is closed. You've got a week and a bit to get your sh*t together otherwise I'm blowing the airport sky high!!”. Paul has maintained this tweet was simply a joke but to date this ‘joke’ has led to a criminal conviction, with fines and costs of approximately £3,000 (or around £22 per character). Footballer Darren Bent landed himself with a fine of £80,000 from his then employer Tottenham Hotspur FC by posting a tweet directed at the club’s chairman to “stop f**king around” regarding his transfer to another club.

However, social media faux pas are not just confined to Twitter. A Church of England Bishop was suspended recently and forced to apologise for making disparaging remarks about the impending Royal nuptials on his Facebook account. The Rt Rev Pete Broadhurst posted comments chastising the “nauseating tosh” surrounding the announcement of Prince William and Kate Middleton’s forthcoming nuptials. He also referred to the couple as “shallow celebrities”, complained the Royal Family was surrounded by “broken marriages and philanderers” and compared the marriage between Prince Charles and the late Princess Diana as a “disaster in slow motion between Big Ears and the Porcelain Doll”. The Bishop has since issued an apology expressing his “sincere regrets for the distress caused” by his remarks and was suspended from his post.

These events demonstrate the risks for companies with a presence online. Companies simply must have a detailed social media policy in place and train their staff in order to prevent their employees making damaging comments about the brand. An applauded example of a Social Media policy can be found here, but beware, even this did not prevent one of the biggest online reputational scandals of recent years. 

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Does the  Bribery Act, which comes into force next April 2011, mean the end of corporate hospitality? If so it will certainly hit the media industries harder than most, and yet the ad world has yet to really get to grips with the implications of this new legislation.

It is not that the industry is corrupt or based on back handers but simply that the media world flourishes in environments of congeniality and entertainment. However it seems the days when Lord Bell, (the famous MD of Saatchi and Saatchi in the 1970s), boasted of spending hundreds on caviar for his clients at one lunch alone, may be unwise in the future. While the Act is not intended to stop a free lunch the penalties for infringing one of the four offences are severe, and likely to focus the minds of any board of directors.  There  will be the possibility of a maximum jail term for bribery by an individual of 10 years and a company convicted of failing to prevent bribery could receive an unlimited fine.

Draft guidance published by the Ministry of Justice in September has only made matters worse. The Guide suggests  that all businesses will have to keep records of the hospitality staff receive and hand out.

The Telegraph described the proposals as an 'administrative nightmare'. While intended to focus on bribes to foreign officials the Act also applies to all British businesses, small or large. There is enormous criticism of the Guidance and calls for clarifications have been made prior to the Act coming into force in April.

Reed Smith support PACT (the Producers Alliance for Cinema and Television) in its call for the MoJ to clarify when a payment may be in the public interest, for example when paying a bribe in a foreign country to gain access to areas needed to carry out investigative journalism. PACT even point out that in some circumstances lives depend on bribes to get hournalists and film makers out of difficult and frequently dangerous situations. However other times the reality is more mundane but equally valid, filming in some jurisdictions will just not happen unless the 'local wheels of business' are oiled sufficiently. Try shooting an ad in some parts of India for example.

So what does the Act cover?
 

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