Maintaining Authenticity

By Brian Socolow

At the recent Action Sports Conference, the issue of “authenticity” was the subject of a lot discussion. For marketers of action sports, authenticity means running a targeted and consistent marketing campaign that shows you are serious about action sports, that you’re a veteran in the realm (yet not just another cog in the corporate machine), and that you’re not trying to be cool just to get into a new business. The idea behind authenticity is that action sports fans and customers will connect most with companies that convey this message convincingly and stick with it.

So how can marketers and their teams successfully convey a message of authenticity? From a lawyer’s perspective, a marketing campaign that promotes authenticity involves three facets: protecting your brand and trademark, using blogging as an effective marketing tool, and maintaining control over user-generated content.

First, action sports marketers must vigilantly protect their IP rights, especially their trademarks. Whether its Hurley, Oakley or Burton, iconic brands are recognizable because of distinctive names and logos. To ensure that trademarks are protected and maintain their distinctiveness, companies should register their trademarks, use them in a consistent way on products and in advertisements, and monitor the marketplace and Web for any unauthorized usage. Marketers also need to avoid potential dilution or tarnishment of their trademark, which can occur if a third party uses the trademark, or a similar trademark, in a manner than weakens the trademark’s distinctive quality or that casts it in an unflattering light (for example, by being associated with inferior products or services).

If a trademark is licensed, license agreements should include guidelines for usage, strict quality control of products and rights to stop infringers. All licensees should be appropriately and consistently monitored so that the strength of a trademark is protected. For example, licensee monitoring is important to ensure that the licensee is only selling licensed goods in the permitted geographical area, and that a licensee’s use of a trademark in advertising is also within the parameters of the license agreement. And trademark owners should be selective about entering into licensing agreements or their logo could easily end up on products that are shoddy or that stray too far from their core brand. For example, it might make sense for manufacturers of helmets and protective gear to license their trademark on sunglasses, but granting a license for use on an iTouch case may risk letting the brand drift off its course.

The importance of blogs to action sports marketing also makes it crucial to ensure that bloggers—whether employees, customers, or just fans—blogging on behalf of a brand stick to the message of authenticity. Marketers should establish clear blogging guidelines for what content is allowed, how such content may be conveyed, and should also give bloggers the necessary training and guidance for staying on message in a way that’s consistent with the overall marketing message of authenticity. And of course, the revised Guides Concerning the Use of Endorsements and Testimonials issued by the Federal Trade Commission (link: http://groupynetwork.com/tools/legal/blogger-beware-using-endorsements-and-testimonials-the-right-way/) must always be followed to avoid any allegations of deceptive or unsubstantiated advertising.

The FTC revised the guides to address the increased use of social media marketing, and recent FTC enforcement actions indicate that the FTC is increasingly monitoring how marketers use bloggers and blogs. In January 2010, the FTC investigated Ann Taylor LOFT for holding a marketing event where bloggers received gifts. The FTC decided not to recommend any enforcement action against the retailer, partly because the retailer had an established policy of telling bloggers to disclose any gifts when reviewing its products. Finally, in August 2010, the FTC entered into a consent order with a public relations firm whose employee bloggers allegedly posted positive reviews on the iTunes website about a video game without revealing that they were employees (link: http://www.ftc.gov/opa/2010/08/reverb.shtm). Among the lessons learned from this recent FTC activity are that the FTC is more likely to assert claims against marketers rather than individual bloggers, and that marketers are ultimately responsible for the online behavior of their employees and the marketing messages communicated via blog posts.

The FTC is not the only enforcer – public opinion can reflect negatively on a marketing campaign that uses blogging in deceptive ways. John Mackey, the CEO of Whole Foods, learned this the hard way. In 2007, an antitrust investigation of Whole Foods revealed that Mackey had posted anonymous comments on a blog criticizing a competitor and speculating that the competitor’s share price would plummet. This angered Whole Foods customers and led to an informal investigation by the Securities and Exchange Commission. The bottom line is that if you’re trying to convey a message of authenticity, make sure your bloggers are authentic and not pretending to be someone else.

Finally, marketers often risk losing control of the tone and content of an “authentic” message when they invite fans and customers to submit user-generated content via the Web. The Chevy Tahoe SUV video contest is a good example of viral marketing gone awry. General Motors ran a contest, inviting consumers to create their own commercial about the Tahoe, and provided high-quality video clips of the Tahoe in different terrains, just like you see in car commercials. Some environmental activists used the contest and the GM video clips to make commercials accusing GM of creating vehicles with low gas mileage that contribute to global warming. Some of these commercials were widely distributed on the Internet, some were posted on the contest site, and a few are still on YouTube. To avoid a similar scenario, marketers should have strong terms of use for websites and clear rules for contests that solicit user-generated content. The terms of use and rules should specify the types of acceptable user-generated content and give marketers the right to remove any content for any reason at any time. Marketers should also screen all content before letting it post publicly, since once user-generated content goes public, its viral potential increases the risk of uncontrolled distribution, and of harm to the brand and the carefully-crafted marketing message of authenticity

(c) 2010 Loeb & Loeb LLP

Brian R. Socolow (bsocolow@loeb.com) is a partner in Loeb & Loeb LLP’s sports practice. He represents individuals and organizations in the sports industry in contracts, intellectual property and related matters.

Suggested Reading:

1. Using Behavioral Targeting to Reach Fans: New Laws on the Horizon
2. Blogger Beware: Using Endorsements and Testimonials the Right Way