Posts Tagged: Promotion

How About Some Updates?

You may or may not have heard of some recent developments in the promotion world.  If you haven’t, great, let me be the first to tell you.  If you have, my update is better.

Endorsements/Influencers

Back in the 1940s, a sociologist named Paul Lazerfield introduced the psychology behind the efficacy of influencers with his theory called “two-step flow of communication,” finding that ideas flow from mass media to “opinion leaders” who distill and pass along information to “opinion followers” with more limited knowledge. Today, this two-step “flow” of communication has become a deluge.  As a result, the FTC and social media sites are taking pains to corral it.

Instagram posted in June a “Why Transparency Matters” blog introducing its upcoming “Paid partnership with” tag for posts and stories.  Is it required?  We don’t know.  Instagram promises to release an official policy on enforcement “in the upcoming months.” (more…)

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Guidance From Commercial Co-Venture Caselaw: A Unicorn of a Topic

There are not many court decisions concerning commercial co-ventures.  In fact, there are perhaps five.  This is far less than the number of decisions involving unicorns (seriously).  Nevertheless, these few court decisions provide some guidance on how a court may look at claims involving alleged violation of commercial co-venture laws.  Let’s take a look:

Attorney General v. Bach, 81 Mass. App. Ct. 1126 (2012):  Company sold tickets to a “show house” with proceeds to go to charity.  No contract with charity.  No registration (note: MA).  Show not a big hit.  Company went under.  Unknown if donation actually made.  Two years later, MA attorney general brought action against the owner personally.   Court found owner violated CCV laws.  Permanent injunction issued precluding owner from failing to comply with the act. (more…)

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“You Are [NOT] a Winner” Consent Order Entered Against Printer/Mailer of Deceptive Prize Notifications

On February 9, 2017, a consent order was entered in favor of the FTC against the general manager of a company engaged to procure printing and mailing of deceptive prize notifications.  The individual got laminated for $800,000 (subject to reduction).

The lesson: anyone involved with deceptive prize/sweepstakes/contests mailings could get in serious trouble.

According to the Complaint, the sponsor, using the aforementioned company, mailed hundreds of thousands of personalized cash prize notifications announcing that the recipients had won a cash prize of $943,543.54.  (NB: maybe a million dollars outright seemed too suspicious?)

Of course, the offer was made to sound juicy: “YOU HAVE WON A CASH PRIZE! … Your name was identified among a tiny percentage of ALL eligible individuals.  The fact that you have won a cash prize must be thrilling and somewhat overwhelming.”

Of course, they targeted the elderly.  Of course, they asked for a “fee” of $25 to collect the prize.  Of course, people complied.  And of course, they didn’t get the cash prize.

Why go after the printer/mailer?  The sponsor gave him the electronic templates of the prize notifications, the outer envelopes and the return envelopes, and instructed him on the quantities to print, who to mail them too, and when to mail them.  (He may have done some editing too.)  He then arranged for the notices to be printed and mailed out.  According to the FTC this was enough to be in on the scheme. (more…)

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2016: The Year in Review

In case you missed it, here are some notable items from 2016 concerning sweepstakes, contests, and related promotional matters:

Influencers, Native Advertising, and Endorsements

2016 kicked off with reaction to the FTC’s new Native Advertising Rules which seek more transparency in sponsored stories/advertising.

In March, in its first enforcement action, the FTC cracked down on Lord & Taylor for paying “influencers” to attract social media attention to its Paisley Asymmetrical Dress.  The FTC issued a number of directives, including making the influencers aware of their participation, and making disclosure of the relationship unavoidable.

In May, the National Advertising Division (NAD), a self-regulatory industry, issued a decision concerning native advertising appearing in People.com under the “Stuff We Love” section.  The NAD determined that disclosure of the sponsorship must be made before you get to the stuff page.

In July, the FTC charged Warner Bros. with making inadequate disclosures in videos of influencers playing a new video game.  The FTC didn’t like that the sponsorship disclosure was in a collapsed box below the video and needed to be in a place where consumers will find it.

In October, in an effort to comply with the FTC Rule, YouTube introduced a new feature allowing visible text on a video for the first few seconds with the label stating “Includes paid promotion”

The take:  Consumers and the FTC don’t particularly like “influencers” or hidden ads, so be conspicuous. (more…)

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Condemnation, Litigation, Regulation, Legislation, Congratulation – Are NFL Ratings Down because of The Daily Fantasy Sports Crackdown?

 

Sports Illustrated recently had an article listing their experts’ take on why NFL TV ratings are down an overall 11% from last year.  Number 7 on their top 10 list was the Daily Fantasy Sports (DFS) bans.  Should the past year of condemnation, litigation, regulation and legislation lead to congratulation to aggressive state attorneys general and legislators for this downturn?  Perhaps.  But to the delight of the NFL (and ESPN, CBS and NBC), most states are now saying “Give Peace A Chance.”

First, DFS were flying under the radar and gradually creating a buzz.  Then, DFS exploded last year spurring increased NFL interest and TV viewership.  Because of this popularity, many legislatures took an interest and decided they had to investigate this (new) phenomena.  A number of state attorneys general issued formal opinions condemning DFS and some filed lawsuits against DFS operators.  Now, the dust is starting to clear, and it appears that most states are recognizing that DFS is a form of legal contest. (more…)

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Big Blue Fans Win Big Red Steaks: Promotions That Go Better (?) Than Expected

On Saturday (October 8), the University of Michigan eleven beat Rutgers by the lopsided score of 78-0. I don’t know if the Wolverines were fed red meat before the game, but the fans in Ann Arbor are sure lining up for some at the local Ruth’s Chris Steakhouse. Prior to the game, the restaurant posted on its Facebook page that from Sunday through Thursday it will offer a discount to match the winning point differential. The original post did not mention a cap, but was subsequently edited to limit the discount to 50% off the bill, excluding alcohol. A post after the game, indicated that the restaurant was booked through Thursday.

The timing of the additional restrictions may be problematic, but regardless, Ruth’s Chris Ann Arbor may have gotten more than it bargained for. There’s always that sweet spot that promotors are looking for to generate traffic without breaking the bank, and thanks to an historic performance by Big Blue, it’s possible that Ruth’s Chris Ann Arbor’s promotion could put it in the red. (more…)

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