The Small-Business Owner's Guide to Advertising Injury

Chapter 7: Social Media Marketing Tips for Small Business: Cut Your Advertising Injury Exposure
Part 3: How to Mitigate the Risks of Viral Marketing on Social Media

Viral marketing has fundamentally changed the way small businesses can get the word out about their products or services online. The widespread use and accessibility of social media means viral marketing can raise visibility and brand engagement for little to no cost. And when done right, a viral campaign can catapult the success of a small business.

But viral marketing isn't without its risks. In fact, a single campaign could make your brand or damage it beyond repair, especially if you commit an advertising injury in the process. Once that mistake is viewed by millions of people, the violation can be harder to settle quietly with your business's reputation intact.

Take, for example, the case of GoldieBlox, a small company that creates toys for young girls. The business got a boost from crowd-sourcing fundraisers, and followed up the attention it received with a commercial that quickly went viral. However, the toy company didn't have authorization to use a rendition of the Beastie Boys' song "Girls" in the video.

The band is suing the small company, demanding that GoldieBlox hand over profits it earned from using the song without consent. The Beastie Boys also seek damages, lawyers' fees, and an injunction that will prevent GoldieBlox from using the song in the future. (Read more about the lawsuit in AdWeek's article, "Beastie Boys Countersue GoldieBlox, Seeking Profits Earned Off Viral 'Girls' Ad.")

Once your video, blog, or other marketing content is live on the Web, it's not always up to the consumers to decide whether your strategy is a success or failure. Sometimes, that decision will belong to the courts.

When Viral Marketing Backfires

Creating viral marketing content for social media is a delicate balancing act. You want your efforts to seem "organic," but at the same time, you need some traditional tactics so that your audience will recognize your brand. But what you may not be taking into account is how easily your best-laid campaigns can backfire if you're not watching out for common advertising injuries.

Say, for example, you want to create a shareable video that pokes fun at one of your competitors. It's an unexpected hit, and major media outlets report on your spot, which generates even more awareness and shares. By the end of the week, your video has more than a million views on YouTube and other social media outlets.

But now your competitor is alleging that your small company committed slander. Recall from Chapter 2 the three factors that determine whether or not a spoken statement is slanderous:

  • The statement must be false.
  • The statement must be made in public.
  • The statement must have hurt someone's reputation.

If your competitor can prove that your viral video hurt its sales because you made untrue remarks, you could face a hefty fine or settlement.

Other viral marketing efforts could saddle you with a fine from the Federal Trade Commission (FTC) if you misrepresent your products or services in order to boost sales. It's illegal to write fake reviews for your business or to pay someone else to write reviews for you.

For example, back in 2006, Walmart's PR firm created several blogs that showed the retailer in a positive light. The most well-known blog was called, "Walmarting Across America," and it featured a family traveling across the country in an RV and camping in Walmart parking lots. The fake blog heaped praise on the big box store and its employees. But after the real story surfaced about the blog's origin, both Walmart and its PR firm raked in bad publicity over the stunt.

The Dos and Don'ts of Viral Social Media Marketing

As you've seen, viral marking comes with legal risks that could land your business on the wrong side of an advertising lawsuit, including those related to copyright infringement, libel or slander, and misappropriation. When working on your viral marketing masterpiece, be sure to consider these pointers:

  • Don't use copyrighted material without permission. If you want to use a song in your business's video, first obtain the rights. And remember, just because you found a picture on social media doesn't mean the creator doesn't retain copyrights. Though user-generated photos can be excellent fodder for a grassroots marketing effort, you could be sued for copyright violations and misappropriation claims when you use others' photos without their consent.
  • Don't trick or mislead people. Not only will you put off your target audience, but you could also be fined for false advertising or other FTC violations.
  • Do run your marketing plan past a focus group, including a lawyer. Show the group your marketing material and get their feedback. This will let you know if your plan will appeal to your target audience and whether it remains on the right side of the law.
  • Do keep an eye on your campaign. If things start to spiral, be prepared to go into damage-control mode. This includes engaging with the comments, but always in a professional manner. Be sure when you're responding to negative criticism that you don't say anything disparaging or defamatory about the person who penned the scathing review.
  • Do carry General Liability / Advertising Injury coverage — just in case. General Liability Insurance can cover litigation costs when your social media marketing goes awry. Covered claims include copyright infringement, privacy violations, slander and libel, and misappropriation.

The takeaway? Respect the intellectual property of others and ensure that the marketing content you're putting out in the world is something you'd be proud to put your name on.

Next: Part 4: How General Liability Insurance Protects You from Advertising Injuries

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