The Rise of Social Media Moguls & FTA Compliance: What Law Firms Should Explain To Clients

Some of the most influential people on the planet don’t sit in the White House or on a judge’s bench. They’re not necessarily famous faces on the television or popular singers of Top 40 radio.

The most powerful names today are often unrecognized and incognito—they’re the names of billionaire bloggers.

Social media has sprung a new type of celebrity. Just ask Gary Vaynerchuk. It’s not a name most people would recognize, but he created a $60 million wine wholesale business after adding video blogs (he’s the host of Wine Library TV—it’s on the Internet) to his modest $3 million a year wine retail store. Ever since, Gary has been featured on GQ, Time Magazine, Late Night with Conan O’Brien and the Ellen DeGeneres Show.

You may not think that the owner of SmartPassiveIncome.com is pocketing $50,000 a month. But, that’s exactly what Pat Flynn is doing with his inspirational story, which he first told on a blog. After Pat lost his job, he had to do something—anything—to provide for his family. He started SmartPassiveIncome.com to track his money-making projects online. However, soon the website gained notoriety due to its complete honesty and transparency about money. Now, Pat operates a podcast and, of course, still posts his income. Not too shabby.

For lawyers, the name Harvey Levin is household. The founder of TMZ.com is a lawyer, legal analyst, blogger and these days, celebrity reporter. TMZ is a infamous gossip website, on which Harvey is a host, guest, and certainly his own brand.

Finally, let’s look at one last rags-to-blog-riches story. Timothy Sykes, whose website is the not-so-subtle TimothySykes.com, transformed $12,000 of Bar-Mitzvah Money into over $1 million through smart Penny Stock trading. His blog still gets hundreds of thousands of visitors, which has allowed him to pivot into other businesses—launching companies like Profit.ly.

The list of bloggers who dominate the financial world goes one. Read more at Lifehack here.

In fact, even lawyers are now viewing blogs as a key part of their online presence and business model.

But, the moral to learn from this story has nothing to do with wealth gained from websites. Instead, it’s about the morally tenuous link between being a social media influencer and advertiser.

See, social media moguls have a secondary profit line from their exposure: marketing products for companies.

No need to look further than the Kardashian/Jenner clan, explains Jane Genova for Speechwriting-Ghostwriting.typepad.com, a tribe that has been highly visible with X or Y product or service, which can be a well-compensated venture.

“The problem, though, Kathryn Rubino reports on Abovethelaw, is that those Kardashian/Jenner promotions are not labeled as such. Yet, each post aka “posing” can pay $300,000 to the tribe.

The folks in Truth in Advertising have sprung into action. They are pushing back on this. They want the influencer type of advertising explicitly labeled as such. However, they lack the power to prosecute. That could happen with the FTC.”

Actually, when talking about the Endorsement Guide, the FTC explicitly states that they apply to social media.

Yes. Truth in advertising is important in all media, whether they have been around for decades (like, television and magazines) or are relatively new (like, blogs and social media),” answers a representative on their website.

Then, however, they are quick to respond that they do not monitor blogger activities and whether they violate parts of the FTC act. Instead, if something comes to their attention, they’ll “evaluate them case by case.”

The Truth in Advertising campaign has taken up this cause, but Jane Genova has an idea:

“Truth in Advertising needs to assign some mystery shoppers to answer those help-wanted. Then blow up that game with an expose,” she proposes.

“Sponsored content—every type of it—must be labeled as such.”

And that’s a message all lawyers—knowledgeable on the ethics of marketing their own legal services—should convey to their clients.

-WB

Navigating social media ins-and-outs can be difficult.

Employees’ social media activities frequently play an important role in workplace investigations. Yet, when investigating harassment, discrimination or other employee-related claims employers must be aware of specific laws that restrict employers’ requests (and access to) an employee’s social media accounts and posts.

Fifteen states have passed laws that limit the employer’s authority over employees’ social media accounts, and many more are not far behind. No matter how serious the investigation, one peek at an employee’s social media account could become a costly, non-compliance nightmare!

Take The Center for Competitive Management’s webinar, “Workplace Investigations: Using Social Media Legally & Effectively while Limiting Risk,” to learn more about employers need to know about using social media in internal workplace investigations, and offers best practice solutions for conducting workplace investigations legally and effectively.

The course will address:

  • Key restrictions under state social media laws
  • Legal pitfalls to avoid when conducting discrimination investigations in the workplace
  • How to conduct compliant discrimination/harassment/threat/defamation investigations
  • When you can and cannot ask for an employee’s passwords
  • What employee conduct the National Labor Relations Board (NLRB) protects and the finer points of the guidelines it has provided.
  • Employee privacy dangers and what defines a ‘Reasonable Expectation of Privacy’
  • Discussion of cases where social media was misused
  • Broader implications for using social media in applicant screening/hiring
  • What multi-state employers must consider when drafting social media policies for investigations
  • Steps to take right away to be sure your current social media and investigation practices and policies are compliant
  • And more!

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