Session Description: This session un-muddies the murky waters of the FTC’s ever-changing focus, the proliferation of IP-related lawsuits, and the legal ambiguity regarding many forms of Internet-based marketing. The panel consisted of:

• Bennet Kelley, Founder, Internet Law Center
• Pete Wellborn, Managing Member, Wellborn, Wallace, & Woodard, LLC

I did like this session more than the FTC related session I attended at the last affiliate summit.  It was put together with the affiliate industry really in mind, though it captured my interest for being not entirely affiliate related.

Bullet Point Review!

• Truth, proof, & fairness – everything we talk about today can be summed up with this.
• Misleading – common violations, disclaimers, & disclosures, demonstrations, refund policies, ads directed at children, environmental claims.
• Unfair ads – causes or is likely to cause injury that is:
  • substantial AND
  • not outweighed by other benefits AND
  • not reasonably avoidable
• Who is liable?
  • Seller (manufacturer or provider)
  • Ad Agencies
  • Site Designers
  • Affiliates
  • Individuals (personally involved)
    • “Negligence Standard” – knew or should have known that the ad included false or deceptive claims.
    • Exert as much control over people as you possibly can because you don’t want to find yourself peripherally liable.
• Other FTC Enforced Laws
  • Franchise & Business Opp Rule
  • MLM Pyramid Scheme Rules Laws
  • Truth in Lending Act
  • Fair Credit Billing Act
  • Fair Credit Reporting Act
  • Equal Credit
  • 900 #s
• Rules of Thumb
  • Truth
  • Consumer point-of-view
  • Proof
  • Careful: disclaimers/disclosures – rules have dramatically changed.
  • Careful: endorsement claims
• Testimonials & Endorsements
  • Celebrities
    • 1st – Accurate
    • 2nd – With Permission (”right of publicity”)
  • General Considerations
    • Honest opinion/belief of endorser
    • Same claim-standard as seller
    • Endorsers must continue in belief
    • Statements must be presented in context
  • Consumer Endorsements
    • You cannot get away with “results not typical” anymore.
    • Claims must be representative
    • Claims must be substantial
    • or Claims can be disclaimed (MAYBE)
    • Same claim-standard as seller
    • “Actual Consumer” must be just that
  • Expert Endorsements
    • Must be true
    • Must be a real expert in the correct field
  • Organization Endorsements
    • True collective judgment opinion
    • Must be true “expert” opinion
  • Material Connections
    • This is where the FTC is trying to go after the “mommy blogger” crowd
    • Connection between endorser and seller that might materially affect the weight or credibility of the endorsement must be fully disclosed (very gray area in terms of HOW)
    • Rule often applies where endorser is not celebrity or well-known expert
    • “Connection” may be money or publicity
      • Applies to blogs & flogs (fake blogs)
      • Walmarting Across America was a fake blog made by Walmart to generate publicity.
      • Absolutely forbidden by the rules of the FTC
      • They don’t want to have a chilling effect on guerilla or creative marketing campaigns, but at some point it has to be disclosed that it’s marketing or advertising.
• “Free” Stuff
  • “Free” means free
  • “Regular price” means same price, on the same quality, quantity, and service level at which the seller has sold the product in that geographic market or trade area for a reasonable substantial period of time
  • Ad must be clean

Points brought up during the Q&A

• In the context of an agency, how can you transfer liability of claims to the client?
  • Have a bullet proof contract
  • Make sure your agreement has a provision that you’ll periodically monitor any celebrity or expert endorsements to ensure accuracy

They read through the presentation rather fast so my notes are probably incomplete.  Luckily, the presentation was made available!  I had to leave during the Q&A portion to get back to the booth, so I probably missed some good stuff caught on video, so I’ll add that here in the next few weeks.  Here’s the presentation:

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Monday January 18th

Day 2 of Affiliate Summit for me started off a bit rocky.  I was far from hung over, but I awoke with the familiar feeling of an impending migraine.  I decided that, despite the morning keynote by Dr. Robert Cialdini not being recorded, I’d have to skip it in favor of some more quiet time before the storm to dispel the headache on the horizon.  Luckily it worked and I went down just at the end of the keynote to catch up with some folks to get the cliff’s notes version of the keynote and to find my first morning appointment.  Luckily, the staff were handing out little cheat sheet cards with the main bullet points from the keynote, which I got and took note of.

I mentioned I had a meeting.  I learned a valuable lesson at this conference – don’t just research what the person you’re meeting with does, research what they look like!  We’d decided to meet in outside the theater after the keynote, and man was that a bad idea.  A sea of unfamiliar faces and I have no idea what this guy looks like!  I hang around for about 15 minutes, trying to find someone who looks like they’re also looking for someone, to no avail.  I check my watch and decide that I have to move on in order to get to the session I wanted to go to.  So now I know that next time I have to meet with someone, I’m either going to meet them somewhere not so busy or snoop on their Facebook profile to see what they look like!

My first session of the day was Product Datafeeds: The Next Level, which by nature was dry, but sill interesting.  Scott Jangro did a great job as moderator and I did my best as a student.  I figured that I know the basics about datafeeds, but moving on in my career to a company that provides a coupon feed, I better learn more!  A full review of that will come later today.

After lunch, I did some time working in the For Me to Coupon booth in the expo hall.  I’m glad that I did some homework about the basics of the company before standing in the booth, because we certainly didn’t have a whole lot of downtime to chit chat.  People were coming by nonstop asking questions about the service, which is awesome.  I was put to the test many times on my knowledge, and thankfully only had to defer to Forrest & Nate a few times for questions I had no clue about.  But it was also a great opportunity to learn more nitty gritty stuff about the service when more technical affiliates stopped by with really detailed developer questions.  A great introduction to my new job!

I ducked away from the booth for some rejuvenation time in the blogger lounge, then on to the Oprah, Flogs and FTC: Hot Topics 2010 session.  It was interesting, but frustrated me that the presenter went through a LOT of good information in his presentation much too fast.  I’m incredibly happy though that the presentation has been uploaded to SlideShare, so when I post my recap of that, it’ll have the presentation link!

Before the activity for the evening I had a lovely few drinks with Heather Smith, Julie Vazquez, Lori Herren, & Joe Vaughn from Izea.  After playing with the Microsoft Surface table in the iBar, we moved our operation over to the All American Bar & Grill for the 20 cent chicken wings!  It’s the Rio’s 20th anniversary, so they had all sorts of deals like that.  About 60 wings, a basket of fries, and a few sodas all came in under $30!  I learned a TON more about Izea and their products sitting with two insiders and Joe, a sales manager from Izea.

After dinner, it was time for our evening activity, one of my favorite activities hands down anywhere – TRIVIAL PURSUIT!  They set up the Wii  on a large screen and popped in the game.  I was happily chosen 3rd or 4th for Team Missy Ward and we proceeded to kick ass.  Of course, another team came from behind in an upset win, but it was a TON of fun playing the game.  I know this is a game I’ll have to get for my wii.  It was good times, and everyone who played & stuck around until the end was generously given a complimentary Gold Pass for Affiliate Summit East 2010, which we’ll be using to bring Dominic along! 

For a normal, sane person, trivia’s end at midnight would have been the end of the evening, but oh no.  Now it was time to wander over to McFadden’s Restaurant & Saloon for a party once again thrown by the folks at GTO Management in conjunction with MakeBeer.net.  Coopers Brew makes some fine beer and their affiliate program is for the home brew kits that they sell, which are handy for the home brewer.  It was  a great time with displays of male competition and a punching bag game.  A few heads hit it and then headed off to another club, but I was done for the night around 2am so I headed back to the room to get some sleep before my early meeting!

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Session Description: Hear from regulators and industry insiders on critical legal issues facing affiliate marketers today, including advertising practices, affiliate liability, and enforcement priorities. The panel consisted of:

• Jeffrey Greenbaum, Partner, Frankfurt Kurnit Klein & Selz PC (Twitter @jeffgreenbaum) (Moderator)
• Leonard Gordon, Director, Northeast Region, Federal Trade Commission
• David Graff, General Counsel and Sr. Vice-President, Corporate Development, Epic Advertising
• Peter Marinello, Director, Electronic Retailing Self Regulation Program, Council of Better Business Bureaus

With all the talk about disclosure going on lately, I thought this session would be a great chance to learn more about how the FTC expects to enforce the over-zealous disclosure they’re now talking about requiring.  I was disappointed that there was no mention of it until the end of the session and that no one asked about it before I had to leave.  The session went long and I had to run to get to GeekCast Live.  It was definitely a wealth of information; I just wish Jeffrey hadn’t talked and gone through his slides so fast!

Bullet Point Review!

• Affiliates need to be careful about the types of endorsements they use.
• Affiliates can get into trouble using celebrity pictures and trademarks.
• Epic Advertising does their research to make sure testimonials used are legitimate and documented.
• There’s no silver bullet.
• Noncompliance is more lack of attention to detail than maliciousness.
• Even if a celebrity endorsement is true, you need their explicit consent to use it.
• What is Advertising?
  • Traditional Media
  • Company Sites
  • Public Relations
  • Spokespeople
  • Branded Content
  • Viral Videos
  • Product Placement
  • Review Sites
  • Facebook Pages
  • Blogs
  • Tweets
• What Rules Apply?
  • Federal
  • State
  • Local
• Deception
  • Tell the truth and don’t mislead.
  • Keep your promises.
  • You’re responsible for express and implied claims.
  • You must have prior substantiation to back up your claims.
• FTCv. CVS Pharmacy Case
  • Accused of misrepresenting how they were protecting customer privacy.
  • Found that discarded customer information was thrown into dumpsters behind the stores that were accessible by anyone.
  • Held accountable.
• Disclosures
  • Is qualifying information necessary to prevent a claim from being misleading?
  • Disclosure must be “clear and conspicuous”.
  • Mouse type probably won’t do the truck.
  • Is the disclosure in close proximity to the claim?
  • Disclosures are judged by a performance standard.
• No pre-checked boxes.
• Disclosures must be separate from terms and conditions.
• Endorsements
  • Must be real.
  • Honest, unbiased opinions.
  • Accurately reflect performance.
    • You can’t use an endorser to make a claim that you couldn’t make yourself.
  • Subject to FTCreview.
  • “Results Not Typical”
• Unfairness is about harm, not about deception.
• ERSP is a self-regulating body.
• No real punitive damages; can only recommend changes to be made.
• Clinically proven claims have to be reliable and competent evidence.
• Clinical Testing Data
  • Independently conducted (double blind study, placebo controlled).
  • Adequate sample size.
  • Conducted over a reasonable period of time.
  • Statistically significant results (95% confidence level).
  • Claims = data.
• Affiliate has the responsibility to confirm that the claims are true.
  • There are some obviously questionable categories of offers that should always be questions before run, like nutritional supplements, weight loss, etc.
  • You as an affiliate can be held individually liable for damaged in a lawsuit.
• FTC has two responsibilities – consumer protection and anti-trust.
• The Obama administration has put pressure on the FTC to look to protect consumers heavily affected by the economic downturn.
  • Extra scrutiny of loans, mortgage, jobs, debt consolidation advertising.
• Be careful when marketing to children as the rules are becoming more strict.
• Is it okay to collect data when a consumer consents?
  • Consumers don’t understand terms and conditions – the FTC thinks it’s borderline absurd to think that they do.
• Disclaimers should be written with the same panache as the ads themselves.
• Terms need to be crystal clear.
• Consumers don’t understand how online ads work.
• FTC doing more research of “green” ads and hope to publish more guidelines soon regarding claim standards.
• FTC is expecting to be partnering with the FDA more to regulate health and safety advertising.

I talked to another attendee of the session, Rebecca Madigan from the PMA, who said the session went on for about another 15 minutes after I just had to leave to get to my next speaking engagement on time.  I hope she posts more about the session somewhere!  Jeffrey, Peter, and David all had their own presentations, but the only one on SlideShare is Peter’s.  Here’s the presentation:

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