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Posted: February 05, 2013

The top six social media promotion mistakes

Avoid these common legal pitfalls

Kazuyo Morita and Anna Miller

Social media promotions can be lucrative.

Last year, a European airline company British Midland International (BMI) ran a sweepstakes on Pinterest, offering the chance to win a pair of round-trip tickets from any BMI destination in the world. This campaign, which ran for seven weeks, received more than 3,000 entries in the first two weeks, and resulted in half a million social media impressions in the first week alone.  

This story is proof that sweepstakes and contests, when done right, can be a low-cost means to raise brand awareness, increase web traffic and improve sales.  On the flip side, a poorly planned social media promotion can quickly become a publicity nightmare and lead to a legal sinkhole.  Before your company gives away a free iPad, a pair of lift tickets or a weekend getaway to Napa, it should first, pick the most advantageous social media platform, and then structure the promotion to avoid the most common legal pitfalls.

Picking A Social Media Platform That Matches Your Business: Facebook, Twitter or Pinterest?

The right platform for your business will depend on the type of promotion you select, and your target audience.

Types of Promotions

There are various types of promotions to choose from, with each social media platform having specific benefits and limitations:

• Facebook for Location-Based Contests.  The “check-in” and location features make Facebook a great candidate for interactive, location based contests. 

• Twitter for Verbal Contests.  The 140 character limit for “tweets” makes Twitter the perfect platform for verbal contests, such as those requiring participants to “complete the phrase,” “solve a riddle,” or “re-tweet to enter.”

• Pinterest for Artistic Submissions.  The online “scrapbook” feel makes Pinterest suitable for promotions involving artistic submissions, e.g., photos, recipes, or design ideas. 

Target Audience: Who Is Your Product/Service Aimed At?

Your target audience may also dictate the social platform you choose.  The numbers may surprise you:

• Facebook has the largest percentage of users over the age of 45 (46 percent), compared to Twitter (33 percent) and Pinterest (35percent). 

• Twitter users appear to report a lower household income than Facebook and Pinterest users. 

• Pinterest has the largest percentage of female users (82 percent), compared to Facebook (57 percent) and Twitter (59 percent).

You should analyze available statistics on social media demographics to identify the platform that will best suit your business’s needs.

The Six Most Common Legal Pitfalls

Once you’ve decided on a social media platform, it’s time to understand the legal pitfalls of social media contests and sweepstakes. 

PITFALL 1: Is your sweepstake or contest an illegal “lottery”? 

Lotteries are much more common than most people realize.  Don’t be lulled into thinking that your promotion isn’t a lottery simply because you’re not selling scratch-off tickets or conducting your own Powerball.  A lottery exists when the following three elements are combined:  a prize, chance (where winners are selected randomly, not based on skill), and consideration.  By definition, consideration is something of value given by one party to another when entering into a contract.  In the lottery scenario, it refers to an entry fee, product purchase, or something else of value, including time or effort spent entering the promotion.  Private lotteries are illegal in the U.S.  So how can your business structure its promotion to lower the chances of it being a “lottery”?

• To make it a sweepstake, eliminate the element of consideration by offering a free method of entry.  Also, be careful of requiring participants to submit non-essential information as a condition to entry. 

• To make it a contest, eliminate the element of chance by selecting winners based upon some measurable criteria or skill e.g., most inspiring essay, funniest photo, etc.

PITFALL 2: Not keeping your privacy promises.

Outline the information and content your promotion will collect, and how it will be used.  Most companies use information for the purpose of the prize drawing and to notify winners.  If you have other uses in mind, provide an opportunity for users to opt out of such uses, or obtain the necessary releases and waivers in advance.  Failure to take this step could expose your company to various claims, including copyright infringement, trademark infringement, and a breach of privacy and right of publicity. 

PITFALL 3: Thinking the Warhol portrait isn’t copyrighted.

Copyright protection in the U.S. extends to any “original work of authorship” that is fixed in some physical form (written on paper, recorded on a CD, etc.).  This includes music, photographs, short videos, images, and many other works that make an online sweepstakes interactive and exciting. 

Do you own the content (images, short clips, text, etc.) you are posting?  If no, have you secured rights to use it?  The Copyright Act imposes severe legal penalties on infringers (including statutory and punitive damages).  The lists below should help you overcome the most common copyright myths:

Common Myths:

• “If the work doesn’t have a © notice, then it’s not protected.”

• “If there’s no registration, there’s no copyright.”

• “We can use it as long as we give proper attribution.”

• “If the work is on the Internet, it is in the public domain and we can use it.”

• “If there’s educational purpose behind the use, it is automatically protected under the fair use doctrine.”

• “Everyone else is doing it!”

• “If we change ___% of the work, then we are not infringing.”

• “It’s free advertising.  The owner doesn’t mind.”

What You Can Use:

• Works you authored

• Works an employee created within his or her scope of employment

• Works created by an independent contractor, provided you have a mutually signed work for hire agreement in place

• Any work for which  you have a license

• Certain government works (created by an officer or employee of the U.S. government as part of official duties) 

PITFALL 4: What rules?

Every promotion must have conspicuous, clearly stated rules.  Official rules cannot be changed once the promotion begins.  Advertisements for the promotion (in magazines or elsewhere) must include an abbreviated version of the official rules, containing all material terms. 

PITFALL 5: Not following the social media platform’s guidelines.

Every social media platform has rules or guidelines governing online promotions:

• Facebook is known to have the most stringent rules governing promotions.  For example, companies are required to use an app to run the promotion, must expressly disassociate Facebook from the contest, and may not use Facebook features for entry, voting, and winner notification. Learn more about their guidelines here

• Currently, Twitter and Pinterest are known to have more relaxed rules for promotions, mostly requiring adherence to the general use guidelines. Twitter’s best practices can be found here. The guidelines for Pinterest are available here.

PITFALL 6: Opening your promotion to 7 year-olds in Ireland. 

In some countries outside of the U.S., sweepstakes are governed by strict rules or are altogether prohibited.  To avoid running into legal issues outside the U.S., businesses should restrict participation to U.S. residents or research laws of other countries.  

Moreover, businesses that open their sweepstakes or contests to children under the age of 13 must comply with the provisions of the Children's Online Privacy Protection Act (COPPA), a federal law that restricts the collection of children's personal identifiable information online.

Avoid these common legal pitfalls and your promotion is off to a solid start.

Kazuyo Morita and Anna Miller are intellectual property attorneys with Holland & Hart.

Kazuyo Morita provides clients with a range of trademark-related services, with an emphasis on strategic counseling and dispute resolution.  In addition to trademark law, Kazuyo handles matters in the area of promotions and sweepstakes laws, copyright law, licensing, and privacy.  She can be reached at (303) 473-2701 or KMorita@hollandhart.com.

Anna Miller provides clients with worldwide trademark brand strategies, protection, and enforcement of intellectual property rights. In addition to trademark law, Anna counsels clients in the area of promotions and sweepstakes laws. She can be reached at 303-473-2791 or abmiller@hollandhart.com .
 

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