1. Using New Media for Marketing Thursday 3 February 2011 Paul Jordan, Partner, Bristows Andrew Southam, Legal Director, BBH

2. Using New Media for Marketing The law – ensuring compliance Spotlight on new media Product placement Conclusions and Q&A

3. Advertising Standards Authority (“the ASA”) “One stop shop” Broadcast and non-broadcast Digital (1 March 2011) “Legal, decent, honest and truthful”

4. ASA sanctions No legal power to impose sanctions but: Adjudications published Ad alerts CAP vetting of future campaigns Legal backstop - OFT

5. ASA – Digital Extension Extension of the ASA’s digital remit 1 March 2011 – ASA will regulate advertisers’ own marketing communications on their own websites and in other non-paid-for space online under their control Capture all adverts/marketing communications “directly connected with the supply or transfer of goods, services...” Need not include a price or overtly seek an immediate/short-term financial transaction

6. ASA – Digital Extension Extension of the ASA’s digital remit (cont’d) Covers: Advergames User generated content: but only where marketer adopts and incorporates the content within their own marketing communications (whether submission was solicited or otherwise) – watch this space New sanctions Grace period and investment by the ASA into educating all stakeholders

7. Consumer Protection from Unfair Trading Regulations 2008 (“CPRs”) 31 prohibited acts “buzz marketing” Enforcement and penalties OFT Investigation – Handpicked Media

8. Case Study – Handpicked Media

9. What are they? Some statistics A practical example – Lynx Jingle Spotlight on New Media

10. “You agree to indemnify... incurred... as a result of... Your breach of this Agreement... or warranty made by You... any claims that Your Applications... violate or infringe any third party intellectual property or proprietary rights” “The Agency warrants that... to the best of its knowledge and belief any creative work produced... will be original to its authors... will not infringe the copyright of any third party in the UK... other than as contained in any legal or other advice provided to the Agency and communicated to the Client” Apps

12. Originality – two stage process: 1.Collected evidence of existing pens, manufacture, retail outlets, etc 2.Several scans of the Appstore for similar ideas Apps

14. Insurance Disputes Rejection Apps

16. Spotlight on New Media Social Networks and Twitter Social networks are far more advanced than Twitter (e.g. Facebook fan pages) Facebook “apps” Facebook Connect

17. Social Networks and Twitter

18. Yeo Valley Use of Twitter and Facebook to drive campaign Real time conversations with consumers High profile reaction

19. Yeo Valley

20. Nestle

21. Social networks – other considerations Defamation Confidentiality ASA Consumer Protection from Unfair Trading Regulations

22. Product Placement – what is it? Payment to a broadcaster or producer to feature a product or service in a programme Described by some as “an affront to basic honesty” Seen in films for years (and US shows), but not in TV programmes originating from Europe Big business – conservative US estimates2006: $ 3.07 billion 2010: $ 5.6 billion

23. Product Placement – The US

24. AVMS Directive (2007) Audiovisual Media Services (“AVMS”) Directive (2007/65/EC) Responding to technological developments and emerging AV media; seeking to preserve cultural diversity, protect children and consumers et al AVMS Directive: general prohibition on product placement BUT: permitted for TV programmes in the following FOUR genres: “cinematographic works, films and series made for audiovisual media services, sports programmes and light entertainment programmes” subject to certain safeguards

25. AVMS Directive: Safeguards Not permitted in children’s programmes Content and scheduling must not affect responsibility / editorial independence of broadcaster No direct encouragement to purchase No undue prominence Viewers to be clearly informed of placement at start and end of programme and after any advertising breaks (unless programme not produced by service provider or affiliated company) Following placements not permitted: tobacco products; prescription-only medicinal products

26. UK position: 2008 – present UK still refused to allow product placement, following 2008 consultation BUT: global recession, increase in Internet advertising and TV on-demand services broadcasters taking big hit on advertising revenue 2009: government u-turn on product placement in TV programmes Further consultation: November 2009 – January 2010 Ministerial Statement of 9 February 2010: product placement to be permitted for UK television companies who make/commission their own programmes, in line with AVMS Directive (plus further UK-specific safeguards)

27. UK changes EU AVMS Regulation 2010 No. 831 came into force on 16 April 2010 as implemented into the Communications Act 2003 2 July 2010 Ofcom published a proposal for new rules relating to product placement on TV in the UK which reflect the new UK legislation. Revised Ofcom Broadcasting Code published in December 2010 Product placement will be permitted, but only in FOUR genres cited in AVMS Directive (Ofcom to ensure that broadcasters do not overstep mark) Specific prohibition on product placement in current affairs, consumer and religious programming (and BBC’s licence-fee funded services) Radio – December 2010 TV – 28 February 2011

28. Other UK safeguards In addition to tobacco/prescription medicines (as per AVMS Directive), UK Regulations will also prohibit placement of: Alcoholic drinks Foods/drinks high in fat, salt or sugar Gambling Smoking accessories Over-the-counter medicines Infant formula and follow-on formula

29. Conclusions Shift in marketing spend Increased sophistication Control of reputation Control of media channels Regulatory lag

30. Thank you for your attention Bristows 100 Victoria Embankment London EC4Y 0DH T +44(0)20 7400 8000 F +44(0)20 7400 8050 paul.jordan@bristows.com www.bristows.com 22413891