September 29, 2011
Advertising is everywhere these days. On an airport escalator last week, I saw an illustrated gecko urging me to save on car insurance. There’s advertising on the moving escalator handrails?! With the increasing amount of media to which we are subjected, traditional advertising is becoming diluted. Dietary supplement manufacturers and marketers must find a way to cut through all the noise if they want to compete for consumer dollars. What to do?
Studies have shown that reviews and endorsements may have a significant impact on consumer purchasing decisions. Simply put, we buy stuff our friends like and recommend. That may explain the trend of “CrowdSourcing” product marketing, using online tools like social media, blogs, message boards, and video testimonials. People are encouraged (sometimes compensated) to share their experiences, provide feedback, “like it”, etc. More consumers are relying on the recommendations of family and friends (and sometimes people they don’t even know) when buying products.
The potential for abuse is tremendous. How can consumers trust that all this commentary is genuine and truthful? Surreptitious paid endorsements and overzealous affiliates can affect the credibility of the supplements industry by casting doubt on all of those rosy customer “reviews” (a subject for next week’s post).
But what if the news isn’t good and your product or company is ripped on a message board? Freedom of Speech: People can say whatever they want, right? As with many legal questions, the answer is “maybe.” There is a distinction in defamation law between opinions and facts. The former is protected speech, whereas the latter can be actionable. It’s necessary to evaluate whether a defamatory statement is fact or opinion. Opinions, even if negative, are protected speech and generally don’t give rise to defamation.
What do you do if there is a bona fide defamatory statement about your product or company on a message board? Can you sue the website owner? In most cases, the answer is “no.” Section 230 of the Communications Decency Act instructs that website operators are not liable for publishing defamatory statements posted by someone else. Generally you must confront the authors themselves. Fear not… even anonymous online authors can be identified. An IP address and a subpoena is often all that is necessary to obtain the “anonymous” author’s contact information.
Social media and referral-based marketing can be wonderfully effective when used properly. However, care must be taken to manage and monitor the process. The laws and regulations concerning endorsements and defamation in the online world are full of interesting twists. If you feel your company’s reputation is being tarnished online, contact an attorney.
If you have an interesting story about how social media or online commentary has affected your business (good or bad), let’s hear it. Please comment below.
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