EP 70: Contracts, Compliance + COVID-19
Kelly: So welcome to this week's episode of Thrive: Your Agency Resource. Today, I'm here with Advertising, Marketing and Promotions Law Attorney, Audrey Glover-Dichter. Welcome to the show Audrey. It is so good to see you again and I'm so happy you could make it.
Audrey: Thank you so much Kelly for having me on your show today. I really appreciate being here with you and with everybody. Thank you.
Kelly: So today we're talking about influencer contracts and legal review and we sort of have to start by talking about the fact that marketing during a pandemic does not need to stop. I know I'm getting a lot of questions about that. Maybe you are as well. But you say that this is actually the perfect time to be able to pause and review everything that needs, needed or currently needs to be reviewed—whether that applies to our existing content, our planned campaigns, things that we may not have had the “time to review” before. The whole point of marketing is to build trust, right? So now we have this point, this moment in time where we have that ability to pause and take the time that's needed. So, how are you sort of advising your clients from that perspective?
Audrey: Well, I have about eight points more or less. We can combine them real quick, but there’s time and I realized that in this crazy world that we are living in today, there maybe a slow down of business, which to me seems to be a perfect opportunity to do certain things like for example, everything's always due yesterday or last week.
Kelly: Oh you must have experienced with marketing agencies...
Audrey: Well, always watching. So this seems to be the perfect opportunity to take a deep breath and take the time to go back and review your campaigns because at this point there's certain things in campaigns that you're planning or your scheduling that it's not going to be possible to, go public like you can't do billboards right now. Yeah, I don't know about print. I'm assuming print is out of the question for the time-being temporarily, but of course to social media you can. But this is the perfect time to take those campaigns and review them for legal compliance in English and Spanish. I like to review campaigns in the language that they're going to run in, just because you don't want to lose your message and consistency, but also, obviously, the main point being compliance, legally compliant. So, I like the legal compliance review, take the time to do it now. Under FTC law, technically, you're supposed to review your marketing campaigns to be legally compliant before you go public, you launched publicly. I get that not everybody does that because not everybody has the time to take the time to go to legal, but it's absolutely necessary. So take the time. It might be an extra hour, but do it, because it could really save you, the agency to plan. Everybody such a big headache and hefty fines if it's taken a long way.
Kelly: Yeah, that was actually going to be my next question was like, what kind of consequences are there. Because it may be just that some agencies may not know, like what are those consequences? What are those fines? What are the things that could happen if they don't go through these proper channels of review?
Audrey: Well, this is the biggest thing where I tell my clients. If the client, the marketer, the business is being reviewed just now, I mean investigated by, like the FTC, the FDA, the SEC it doesn't matter who, or even the State Attorney General's office, or even the self-regulatory bodies. If anybody's investigating the business for their advertising campaigns, if there's some legal issues, trust me that the agencies are being investigated all along side as well because they want to know what the role of the agency is, in that marketing campaign. So if it's a misleading issue, what will the agency take play in creating a misleading advertising campaign? And the standard is always knew or should have known. So, obviously, there's a lot that goes into the knew or should have known because it goes back to what do you have on the client. What question should you have asked? You can't just stick your head in the sand and say, well, I didn't know. Ignorance is never ever, ever, ever a defense for any field of law. So if you see any red flags, ask the questions, don't ignore it.
Kelly: Right. And one of the other things that you and I have talked about in the past is that from your perspective agencies really need to be reviewing their advertising law contracts. You suggest twice per year, but at minimum annually. And I think a lot of the reason for that is because the laws change so frequently. So can you talk about a little bit like why you really recommend the twice per year?
Audrey: Sure. As an advertising law attorney, I like to review the advertising law of contracts from an advertising law perspective. And what that means is, law is a living thing, believe it or not, and it changes constantly. So it is crucial, it is very, very important that you have your contracts reviewed and that you have the proper clauses written legally correctly with the correct legal legalese to make sure everybody's protected and if you need to get out, you can get out.
But the most important thing is, the last thing you want is to have an on clause in a contract that could potentially null and void the entire thing. I mean, then what do you do? I mean, incredible amount of issues that could potentially come up if that happens. It's like, so, what happens to the scope of work? And how are you going to get paid? Are you going to get paid? You need to sue to get paid. I mean, there's just so much that goes into it. So I prefer to do it on a twice a year basis just to make sure because again the law changes, changes, changes. However, of course, not everybody can or wants to do it that way but at least once a year. And of course when you're dealing with different things like influencers, there are very specific clauses that go into advertising law contracts and depending on what they are.
And for influencers for example, those are whole a lot of things and whole of different clauses that you want to put it in there not just to protect the agency and the brand but also how to deal with this person. This is a person right?
Kelly: Right. And you are essentially like responsible for what an influencer says or does or posts on behalf of your brand, right?
Audrey: And there's a lot of litigation and enforcement going on right now because influencers may not get enough guidance on how to make that disclosure, that material disclosure that they need to make or when to make it or how to make it with the perfect wording. So these are things that I help put in the contract so that everybody's on the same page, everybody understands what needs to be done in plain English.
Kelly: Yeah, and I would imagine, I know that we're kind of only a few weeks into this pandemic, but I would imagine that because everyone is really or the majority of people are working from home, there is so much more online activity now, especially on social media than ever before, right? At one given time or over a pretty prolonged period of time. So I would imagine that those things are even more right at this point because you've got so many people that are following more, engaging more, commenting more, right? So I would imagine that this is kind of, like you said before a really perfect time to really look at those contracts and make sure even if those influencers are active or actively promoting a brand or what have you, making sure that the contracts that you have in place as the agency with that influencer are obviously more important now than ever before and that's sort of a consequence of the reality that we're in right now.
Audrey: And what I like to do is, like I said before, I'm fluent in Spanish. So, not only do I like to review the campaigns in Spanish, if they’re going to be wanting in Spanish. What if you're going to have a Spanish influencer or Latin influencer? Perhaps it's a good idea put a hashtag in Spanish you want to have them use. Given the very specific language, if it’s going to be in Spanish or if it's going to be in English because you don't want any wiggle room. You want to make sure it's tight and that everybody again is using the correct language and the correct hashtags to make that necessary disclosure. So that's what I like to do because If you're going to do it in Spanish, it's just as important to get it all right in Spanish as it is in English. You can just get in trouble for getting it wrong in Spanish as any much. It doesn't matter. The law applies regardless of what language you're writing in it.
Kelly: Right. I think that's a great point. So let's talk a little bit about online privacy policies and how information is collected. So, I know we've got GDPR in Europe, we've got CCPA in California and what a lot of people probably don't know at this point from the agency perspective, just because we are in the realm of COVID-19 right now is that the SHIELD Act of New York you just mentioned before we spoke earlier. The SHIELD Act of New York the second phase of that has actually gone into place as of March 21st. So this is really brand new content, new policies that are in place. So if you could share a little bit about that, I think that would be really helpful, especially to the agencies who operate in New York or have any kind of business dealings in the state.
Audrey: Sure. Well, the biggest thing, pattern that I'm seeing is that it's the who is on the other side of your marketing online especially your website's obviously because this really applies more to the online....
Kelly: Data collection...
Audrey: Right, data collection, and privacy, like how much private data do you collect? Is it identifiable? So the biggest thing is to me is always the who’s on the other side. You don't know who's on the other side looking at your website, right? So it could be a person from the EU sitting in New York. So guess what? Now the GDPR applies to you. Right? Because it doesn't matter where that European person is. The fact that that person is European the GDPR just attached. So the same thing with CCPA, it attaches; if it's a California person sitting in New York looking at your website because that person is a resident of California, then the CCPA attaches.
Kelly: What is the CCPA? Just for the benefit of other people who don't know.
Audrey: The California Consumer Protection Act and it's a GDPR wannabe. I mean, don't get me wrong, a lot of differences. Okay?
Kelly: I like that.
Audrey: Well, you know…
Kelly: It’s a good way to remember it.
Audrey: And then the SHIELD Act is another one and they’re all very different but the interesting pattern is that again now the SHIELD Act applies to New York residents. So, are you collecting data? private data, social security numbers, credit card numbers, bank card numbers, email, addresses like very identifiable data, right? That it could be breached and cause havoc as we all very well know. So, but again, so that New Yorker could be in Paris. Hopefully not now. So then the SHIELD Act applies because it's a New York resident sitting wherever that person may be sitting on earth because that person is a New York resident the SHIELD Act applies.
So I always tell everybody remember that it's the who, not the where or not the what. All of that comes after the who? So because we're so different, I always advise my clients like just play it safe and make sure you’re compliant with all three and sometimes you kind of feel like, huh? How do I do that? So what I like to do is I have GDPR language and you can click on GDPR page, and then maybe CCPA language and click on the CCPA page, and now we're going to have to add the SHIELD Act because that just came into effect and of course because everybody's so busy trying to figure out how to work from home for people who haven't been doing it and this whole pandemic thing is freaking a lot of people out obviously for good reason. It's not easy. So the SHIELD Act kind of fell through wayside where people are not exactly aware that it does exist and it does apply because it is a state act.
Kelly: Right. I actually have a quick question about that though because you just mentioned specifically with websites. If you have a page for each of these acts on your website to show that you're in compliance, to show how you're protecting data that is being collected. Do you have to have an individual page for each of the acts or could you just call it privacy compliance and data collection or something like that? And then have what you're doing for each one of these three on the same page or does it necessitate an individual page per each act?
Audrey: It depends on client and their each act has a very specific base as to when it applies, when it attaches. Of course, it always attaches to the who, like the CCPA and the SHIELD Act also have... for example in CCPA, I’m sorry, if I remember correctly it’s like 5 million dollars of revenue and then in New York it’s 3 million dollars.
Kelly: I see.
Audrey: So those numbers whether or not it attaches but because you never know who's on the other side, I always advise clients why not just play it safe regardless of what your revenue is. And the other important fact that I'm starting to notice is under the GDPR and law changes all the time. In the general GDPR, technically, you're not exactly responsible for third-party software, like if you use PayPal you're not responsible for PayPal, right? Because you’re whole different world and you can't control what they do. But on the CCPA if PayPal has a breach, now you also are connected to PayPal because you're using PayPal. So there's some responsibility there.
Now unfortunately, we don't have final regulations on CCPA and so a lot is constantly changing. We don't have the final regulations for that. I'm not aware that there are final regulations of the SHIELD Act so it just came to an effect. As those regulations become final, we’ll have better understanding at how to work things. So I just want to say it's just kind of muddy right now, very gray. Just that this exists and it may apply and the differences is on how it applies, it may necessitate to have different pages with different language, with differences because like I said one requires no responsibility for third acts where CCPA apparently is going to give you responsibility for the third party. And I'm not sure where the SHIELD Act is going with us. So I can't say right now because it just came into effect but yes. So sometimes it's just easier to have a different page for each one or maybe one long page and say GDPR or CCPA. It depends. And it's not so much about the structure. It's about having the proper language.
All right, so as we start to wrap up here, obviously we're in the age of entirely remote workforces especially for agencies. We have no control over that and we don't know what the future of that looks like in terms of time frame. So this I think is another opportunity to make sure that we are making sure that our employees are really trained on advertising law. So not in the context of having them act as lawyers, but at least sort of being like a first line of defense in ensuring like checks and balances to protect your agency.
So if you could talk a little bit more about that as we wrap up, I think that would be a great place to land because this is not only from a professional development standpoint, but just from an agency protection standpoint, really getting/taking this opportunity, to get on the same page and be really consistent with how we're understanding where we're getting our content and our images and making sure that the copyright information is in place and all of that. So I'd love to just kind of hear your thoughts on that.
Audrey: Sure. I'm a true proponent of in-house training. The main reason for that is and again like you just said, we don't expect you to be lawyers. But the whole point of the training is everybody should be on the same page with the same basic understanding on how the law attaches and applies to the work that you're doing because, like I said before if the marketer, your client is being investigated, chances are that the agency is being investigated as well.
So this is a great way to be able to have a basic understanding of how the law works and depending on what you do and depending on the product or the service that you're working on. What you should be aware of? Where are the red flags? And then come up and then after that, what I like to do is sit down with the agency and try to come up with some kind of a checkoff list to have some kind of advertising or internal procedural policy. So it's just simple check off. We check for IP clearances. Do we need to do an IP clearance? And this is just an example like you're going to use this photo, just use some photo, right?
Where did you get the photo? Did you just download it from somewhere in the internet? And is it clear to be used? Did you pay for it? Are you allowed to use it? Is it copyrighted? There's so much that goes into that. Did you get the photo from the client? Really? And where did the client get it? And are we allowed to use it? Is there a copyright attached to that? So what protection does the agency have if the client demands to use that photo and whether or not that photo is copyrighted and whether or not the client did do it's due diligence as far as doing the IP clearance, as far as checking whether or not they can use it if they pay for it and all of that. I mean if they’re adamant about using it, and you're not comfortable by using it, what is the agency going to do about that? So what do you have in place to make sure that the agency is protected from using a photo that you may or may not be legally able to use.
Kelly: Right, because if that client has a photo that they've obtained in a way where, let's say that their copyright information is in question, they’re mandating that you as the agency need to use this photo in a campaign yet you technically are going to be liable, right? If something comes up where the client is investigated or whatnot, there's no way that you should go and use that photo without making sure that it's gone through the proper checks.
So I think this is a really big thing because I do see so many agencies and to be honest like we probably did that at my agency. We probably didn't run all of the clearances and all the copyright information and a hundred percent of the protections that we should have. I think this is a really good point and now that we have the time to kind of like pause, I'm really talking about the pause a lot in here. We have the opportunity to create a checklist and to train our people in a way that supports them, a way that supports our agency, a way that supports our clients. And in the end, that's really back to our value proposition. We're going to go through as an agency. We're going to go through and make sure that you're completely compliant with every kind of piece of content, imagery, video etc., if we're going to be using it in the campaign. So that's kind of what I hear you saying.
Audrey: Correct. And really, I'm going to go back to my original point. Under the FTC law, all campaigns need to be legally compliant before launching publicly. So the bottom line is if you don't do that, then you're opening yourself to not just the government issues and investigations and all that but also potential lawsuit.
And trust me, agencies do get sued. As a matter of fact I have a whole presentation on the reasons why agencies get sued. And if you do your due diligence right off the bat, it may slow you down in launching publicly but at least you minimize your legal risk because if you get challenged or sued, you can go in and hopefully nip it by showing all the due diligence that you've done and say look I have help to support my claims. I have the IP clearances, I have this, I have that, and then hopefully if it is a lawsuit it gets thrown out quickly and as you not already know, lawsuits are very costly and time-consuming. So if you can get rid of that lawsuit immediately, think about how much time and money you're saving and the same thing to having to defend at a federal government agency or state attorneys agency or even at one of the self-governing bodies because again, if you have everything done up front, then hopefully you just completely minimized that legal risk and minimize the cost and the time and the aggravation. So it's well worth the time.
Kelly: Absolutely. Well Audrey, thank you so much for joining me today. This conversation has honestly been so packed with just a wealth of information and your knowledge. Really, really appreciate you coming onto the show.
Audrey: Thank you so much for having me and thank you everybody for listening and I really appreciate your time and for inviting me. If anybody has any questions, may I give them my phone number?
Audrey: My phone number is 954-736-9787 and my website is www.advertisinglaw.legal
Kelly: I will. Yeah, Audrey, thank you. And I will put that in the show notes. The website obviously. I don't want to put your phone number in the show notes, but yeah, so thank you so much again. This is really helpful. And please be well during all of this.
Audrey: Thank you. You too. Have a great day and everybody stay safe and healthy.