Friday, November 13, 2009

Buffalo Panel #2/Responding to New Types of Advertising

Sonia Katyal, Fordham Law: Anti-branding and Stealth Marketing: The Love that Dare Not Speak its Name

Wayne’s World (1992): Mike Myers & Dana Carvey are confronted with stardom when their cable access program is bought up. They’re entreated to allow their corporate sponsor on the show, and reminded the contract requires this. Wayne the character resists, but while openly displaying a Pizza Hut box and snacking on Doritos. Garth agrees while wearing head-to-toe Reebok and drinking Pepsi. Watch it. They’re disavowing and calling attention to it, and laughing all the way to the bank.

Years later, product placement has gone even further. A brand can be political and commercial at the same time. Anti-branding/culture jamming movement has sprung up, cataloged in Naomi Klein’s No Logo. Billboard liberation movement recodes some messages in urban spaces. In cyberspace, tons of examples as well—parody sites, gripe sites, gamers who create anti-advergaming. As many ways as people design branding, anti-branding can follow. Artists and activists raise complicated questions for the law—a First Amendment-IP clash.

In the last few years, we’ve seen a really dramatic shift in relation between brand and anti-brand. The brand used to coexist with the anti-brand; consumers could identify both by using context. But as consumers have grown more overloaded with information, advertisers have been forced to seek more ways to communicate, leading to blurring between commercial and noncommercial. People don’t respond to traditional ads. Thus the rise of stealth marketing in real and digital space. Public and private are blended.

Stealth marketing often takes place within the traditional channels of antibranding activism. (I’ve wondered whether that V spoiler campaign is in fact sponsored by ABC, actually.) Ellen Goodman describes two types of stealth marketing: traditional payola and immersive/embedded advertising where products are part of content. New generation of product placement is far more diverse—reality shows, videogames, individuals themselves sponsor viral videos, sponsors sit in on editorial meetings for TV and new media, advertisers produce their own content. A new generation of companies instituted fake sites and blogs—Wal-Mart blog about an average American couple traveling across the US spending each night in a Wal-Mart parking lot. Turned out to be funded by Wal-Mart. had a guerrilla marketing campaign against Google—Stop the Online Information Monopoly, speaking the language of the antibranding activist—directed them to, owned by Ask’s ad agency. Mozilla: site called “Fight Against Boredom,” with a fake Facebook page etc. Advertisers can use flash mobs too.

Implications for trademark: can be difficult to tell the difference between official and unofficial pages—sometimes they can collaborate, as with Coca-Cola’s Facebook page created by fans. In other cases, companies may be less enthused. Facebook now requires individuals with company pages to prove they legitimately speak for the company—“helping companies keep control of their messages,” in order to be able to charge them someday. Authentication = companies can shut down commentary.

Cannibalization of anti-brand by brand—where is the line when they use the same channels? What’s the role of the law? Clear delineations between commercial and noncommercial speech are nearly impossible. Next generation of cases will have to grapple with these difficulties. Should the law require more disclosure of sponsorship? What would that look like, and how would it affect the consumer imagination?

Zahr Stauffer: Historical narrative can be complicated—there’s a conventional view about when product placement began, but it didn’t begin with Reese’s Pieces. It’s as old as Hollywood itself. This has ramifications for whether the practice is depicted as disruptive. It obfuscates emphasis on other key factors in your story—changes in consumer culture, creative culture. Guerrilla marketing does seem new.

A: She doesn’t mean to say E.T. was the first time for product placement, but that it was a very dramatic example of how much companies were willing to pay. Other factors: so much cynicism attached to the notion of sponsorship. Her students turn away from sponsored products. Other: info overload. So many channels/options that it’s almost necessary for the advertiser to figure out how to use them more productively. Consumers are learning to tune ads out.

Q: Add to this what people in advertising industry say. People in the industry want to eliminate the term “advertising” and say they’re communicating, engaging, having the consumer enter their environment. We need to see the system, but also what the natives think they’re up to—their language has changed.

My thought: pursue the misuse arguments Posner offered in Ty v. PIL. It is a wrong inflicted on the information environment to disguise source to enhance credibility and sell stuff (have to confront literature on anonymity and pseudonymity).

Lisa Ramsey: Disclosure?

A: Possible—still have the cynicism to deal with.

Q: The previous panel was about blurring boundaries between consumer and worker, commercial and noncommercial sources of identity. Why are we so upset? Feminists used to argue against the public/private divide because we should make visible what’s in the private sphere. If your critique is right, disclosure won’t be enough if the brands are actually acting, teaching us how to be and think, as opposed to just communicating information.

A: Disclosure would be one step to encourage consumers to take notice of how they’re being marketed to. Expanding the parameters of fair use would also be a part of it. Both offensive and defensive strategies.

We used to think of the anti-brand world as noncommercial and branding as commercial, but markets are developing in both, which raises the question of escape as well as complicating First Amendment analysis.

Lisa Ramsey, University of San Diego School of Law: Brandjacking on Social Networks: Confusion About the Source of Information or Advertising

Virtual and physical impersonation: the Yes Men recently impersonated the Chamber of Commerce quite successfully for a short time. Many people instinctively think this is free speech, but TM law may apply and that might not be such a bad thing in appropriate circumstances.

Social networking sites: often not clear if the markholder is behind the particular page. Facebook account for Nine West model auditions, soliciting women to send contact information and photos of bodies and toes. Someone else (possibly a competitor’s employee) set up a fake Twitter for PR firm Kinner Friedman—put embarrassing comments on as well as news taken from the real site. “Janet” signed up on Twitter as ExxonMobilCorp and started interacting, though allegedly her work contained several errors. It’s not unreasonable to assume that consumers might disclose personal information to the “brand,” which might be misused—identity theft, buying nonauthentic goods. If the posts are offensive or false, this could also discourage customers from buying the products or services. Info overload: hard for consumers to figure out which of 100 Nike Facebook pages is real.

What if the fake site isn’t selling anything, though? There seems to be no commercial use. Her thesis: TM law does cover impersonation, and it should where reasonable people believe and rely on the false statement of identity and are confused about the source. However, free speech can be harmed if courts apply this outside the pure impersonation context—it should not apply to commentary/criticism. Likelihood of confusion about source only, not confusion about sponsorship/affiliation/consent, should count. (I think this claim makes Mark McKenna’s point quite well: TM’s key wrong turn came when it abandoned competition. Ramsey’s argument is essentially that someone pretending to be in competition—selling the same stuff—with the TM owner is committing a wrong; the reason that conclusion is scary is because of its implications when the person isn’t quite pretending to compete but is actually engaging in commentary. If we didn’t have such an expansive coverage of noncompeting goods and services, then we wouldn’t have to worry about the real parodist when making doctrine.)

Many TM owners have TMs on the provision of information services relating to their products/services—Viagra, for example, applied to register information services such as pamphlets, websites, and so on offering information about erectile disfunction. As long as you’re not just advertising your own goods and services, you can extend your TM to information services. In that case, someone impersonating you is competing with you in the provision of a service you also provide—information.

Can make clear that you’re not the markholder—Fake Steve Jobs, or tags like “victim” or “fan.” Courts should also look at content to see the context— case. Initial interest confusion is insufficient from a free speech perspective. Another alternative: the Rogers v. Grimaldi balancing test—a fake Facebook page can be literary expression. Is the use relevant to the content? Often it will be. Does it explicitly mislead consumers as to source or content? If people really are confused, you can’t take advantage of this test. (I think this misreads Rogers by reading “explicitly” out and reducing it to a confusion test, which is of course manipulable—recall that Rogers submitted a confusion survey in that case showing levels of confusion that would have convinced some courts. The issue was that the film didn’t say “authorized” or “real” or anything else, and thus the court held as a matter of law that the First Amendment protected the title of the film. Nor did the ExxonMobilCorp account, though perhaps the contents of tweets would have crossed the line.)

Is saying that you’re the markholder a “knowingly false statement of fact”? It’s not anonymous or pseudonymous, but a false attribution of authorship. (Does that mean it’s false for me to take “Mark Twain” or “Samuel Clemens” as my pseudonym? Roleplaying groups will be very very sad to hear this conclusion. Ramsey says in response to my question that no, it has to be contextual—can’t rely on the reaction of a newbie to the forum.)

How long does confusion last? The Yes Men confused a few major media institutions for long enough to get a news cycle. What must people do in reliance on the information? Is belief enough, or do we want to require financial harm—stock price, lost sales, etc.? Do we care only about harm to consumers, or also about harm to markholders?

A commercial use requirement might be a good idea, but political groups and religious organizations would like to use TM to protect themselves, and we may well want to allow them to do so. (Once again, it’s all about competition. United We Stand is a good case because it involved competing political parties; suing Nader for using a credit card slogan was not.)

Bartholomew: Isn’t there something to be said, politically, for sucking people in—e.g., A Modest Proposal? When you see the criticism emerge, that can be more powerful.

A: That’s a huge issue—at what point do you have to get the joke? Case by case, in the end.

Q: wouldn’t this be analogous to a man appearing in a white coat in an ad, confusing consumers about whether this is a message from a doctor?

A: She’s confining analysis to impersonation of TM owners, but individuals have claimed harm from impersonation of their identities. Whether people should sue is often a big question—companies risk a backlash if they sue.

Q: Cultural question of whether this is good for society v. how we fit this in TM law—which issue do you want to address?

A: She understands why this is an effective form of communication. But that doesn’t always mean it’s protected speech or noninfringing—maybe this is civil disobedience and you take your chances if you do it.

Q: Focus on TM law limits this to US only in an international age. US tried “Brand America” overseas—ambiguous source. How can TM law help?

A: Well, all countries have TM—has to be nation by nation. As a consumer, she’d like to know source.

Laura Bradford: Should we hang back because these are new uses? People may form expectations depending on how we regulate. In the beginning, some judges believed that search results were confusing because search engines were new. But then norms developed and most people aren’t confused by organic results. Aren’t you stacking the deck by saying that, for example, a stock price decline is a TM harm? That’s just a back door to saying the parody was effective.

A: She thinks it should be tentative and case by case. Practically, courts are willing to find consumer confusion with a 15% confusion showing, and that will harm true parodies. Stocks: she struggles with whether it’s actionable, though it is a harm (and there are several cases recognizing it as such, see Checkpoint Systems v. Check Point Software in the 3d Circuit).

Q: Because it’s up to private parties who have to pay for an action, there’s a large amount of unlitigated stuff—it’s serendipitous who gets picked on. From a First Amendment perspective, that may be a chilling problem.

A: Maybe the government should step in to protect consumers in certain circumstances—this is a very different situation from parody, cybergriping, etc.—you claim to be someone else and consumers (readers?) believe you. Markholders providing negative information about themselves have more credibility than other sources.

Zahr Stauffer, University of Virginia School of Law: Novels-for-Hire: Authors, Advertising, and the Law

There is a regulatory regime of sponsorship disclosure in broadcasting, though it’s flawed. But what of literature? Early stages of project thinking through differences between ads in literature v. TV/film. Intuition: differences with respect to authorship, consumer experience/engagement. Now covering branded entertainment--ad-supported literature. Includes novels with actual ads (like in magazines) in them. She distinguishes autonomous references (free plugs) from sponsor-induced references.

Embedded advertising: embedded within entertainment contexts—need not be stealthy, as with Wayne’s World drawing attention to its own operations.

Taxonomy: ads placed around fiction: literary banner ads; online content; way it worked in mid-19th century England. Ads embedded in fiction: literary product placements. More common than we think, though not that common. Ads as fiction: sponsor-generated content. Sponsor often commissions an independent author. But “generated” points to the legal fiction that the commissioner is not just the owner but the author. It also sets up the concept in parallel with user-generated content, and in fact the rise of one is correlated with the rise of the other.

Many issues raised; she is focused on copyright but needs to think through the other areas. She has argued that embedded ads are beneficial elsewhere, but has no normative take on advertising in fiction here—she’s engaged in detective work.

Taxonomy is important not just generally but also because we have no regulation in place against which to measure what’s going on. We might think through different modes of ads in literature—is it anything like payola? Would we analogize to the FTC’s Endorsement Guidelines? Could it be an unfair trade practice? Or is it First Amendment-protected speech? Do we need new concepts, or none at all?

Three foundational assumptions: (1) product placements in literature, and branded entertainment in general in publishing, are more common than we think. Details are usually private; scandals occur when authors are outed and there’s a lot of downside for disclosure and no requirements of same. Since embedded advertising in general is such a large market, it would be surprising to think that publishing would be excluded, particularly with the rise of immersive/cross-platform marketing. Authors themselves are slick marketing machines: Stephen King, Janet Evanovich, James Patterson (former creative director at ad firm, presumably not reluctant to engage in marketing). Lots of brand references to cars in his books, but when something evil happens in a car it’s never identified by brand. Difficulties in publishing industry also provide incentive to turn to sponsorship. And a couple dozen reported instances.

(2) This practice will continue to grow sufficiently to be worthy to think through the implications. Declining print revenues and increased pressure to experiment with new revenue-generating models, e.g. digital textbooks. Increasing acceptance of product placement in traditional media to get revenue, even in hostile environments like Canada. Shift in digital platforms—makes the process more appealing for sponsors because inserted ads’ performance can be tracked/measured, and ads can quickly be updated. Imminently expanded regulation of embedded ads under various proposals might force advertisers to literature—that’s why cigarette companies went to novels in the first place, when they were kicked offscreen.

(3) Draws line between fiction and nonfiction. Harms differ.

Why use brands? Verisimilitude. Can be more distracting to viewers to have a brown car than a branded car. Brands can embed meanings. The meaning of the brands of beer Obama and his guests drank was a source of debate! Aesthetic results of using brands.

Ads placed around fictions: very common historically; probably originated with Dickens. Common in late 1970s to pay for placement in pulp novels. Authors often didn’t know. Showed up in Toni Morrison’s The Bluest Eye. One advertiser paid for 540 million paperbacks. Poised to grow exponentially with the Kindle, which is thinking about subsidizing through banner ads.

Embedded in fiction: Hemingway got a case of pastis for his references. More modern: references to Maserati earned the author a party at a dealership. Another author mentioned champagne in return for free champagne at the launch of his next book.

Sponsor-generated fiction: Susannah James, Love Over Gold: the untold story of TV’s Greatest Romance, Nestle’s Gold Blend (those googly-eyed coffee ads). Ken Casper, Running on Empty, NASCAR-sponsored romance. Entrenched in the kid’s market—the Oreo Cookie Counting Book; Herhsey’s counting book. Electrolux commissioned a novel about a guy who hates housework and whose girlfriend dumps him; features tips on cleaning. Lexus-brand fiction: “Black Sapphire Pearl” was named after a paint style; well-known authors like Jane Smiley and Curtis Sittenfield were commissioned for the followup, “In the Belly of the Beast.”

These are explicitly efforts to reach valuable demographics. She assigned “Black Sapphire Pearl” to her law & literature class on the Lexus website, wanting her students to encounter it on the website. Four days before class, it disappeared. Mark Haskell Smith, the author, doesn’t list it on his website as a work he wrote.

Concerns: consumer deception, which she finds more worrisome than in broadcasting, where consumers are more savvy about placement. Authors: preferences under patronage systems; some may like them, but there are tradeoffs as compared to a market system. These works are trying to be works for hire. But do they fit into the model? Congress envisioned WFH to be a narrow class because it’s owner-friendly but author- and user-unfriendly. If we see this area get a lot of traction, we might be putting a lot of pressure on the WFH category.

Kindle amplifies these questions—we may see banner ads exploding; we may see ads be target-sensitive with different ads for different copies; we see Stephen King commissioned to write a novella for the Kindle that heavily integrated the Kindle and that was initially available only on the Kindle.

Errol Meidinger: What kinds of authors do you expect here? Already high-profile? Different implications than if it’s a way for a poor struggling author to get paid.

A: That’s one research question—is this helpful or a windfall? There’s a range. She’s seen not very well known authors get a 2-novel deal to write about Ford; Fay Weldon, already a defined brand herself, got commissioned. James Patterson is hard to figure out. Arguably he has some sort of placement deal. They don’t want you to know what the deals are. Recently, some teen novels have come out about this—think that the demo doesn’t care.

My Q: Say more about the parallel relationship you see between user-generated and sponsor-generated content. Also how do you deal with franchises like Nancy Drew or Gossip Girl or even Star Trek tie-ins?

A: She thinks that the question is whether the marketing is driving the content. Is it a pure aesthetic dictate? She doesn’t think that aesthetics can be free from commercial constraint, but she looks for actual consideration provided. Gossip Girl, filled with brands, is the way it is because it’s seeking a placement deal. It’s a way of signalling adaptability for screenplays.

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