Legal Department v. Sales Department: Round 1!

In my post, The Essential Tool-Kit for the In-house Lawyer, one of the contributors of an idea for an item to include in the kit mentioned the essential requirement of "an effigy of a sales manager to stick pins in".

Justified?

In each in-house legal position I've held there has been, without fail, a friction between the Legal team and the Sales & Marketing team.  The reason?  Our teams respective purposes within the company are diametrically opposed.

The job of Sales & Marketing:- to sell the company's products and services to as many customers as possible. This more often that not entails a burning desire on the part of the Sales & Marketing team to raise the expectations of the customer, consequently making the customer believe that the product or service is a whole lot more than it likely is, and at a great price to boot.

And the job of the Legal team:- to manage expectations, to manage risk.  To ensure that the customer knows exactly what they're buying, and at exactly what price too.

It's a battlefield at the best of times; and I pity any fresh-faced law graduate starting from the top of the ivory tower, when placed in front of an aggressive and experienced Sales Director at month-end intent on reaching his target.  However,  in my experience I've learned that there's no reason that the friction can't be a healthy friction.

The Defence?

The best Sales Director I've worked alongside was at a previous role I held in the package travel industry.  A highly-competitive industry, low margins, a pile 'em high sell 'em cheap mentality, and heaving with regulation particularly advertising regulation.  I say "worked alongside" this Sales Director because that's Rule 1 of working in-house: no matter which department of the company you're in, you're all on the same team.

This Sales Director knew his product and his target market inside out, but he also knew the law inside out too.  Which meant he tested me.  Every product, every promotion, every advertisement was pushed to the limits of what was legally acceptable.  It became apparent to me very quickly that it wasn't enough to simply say "you can't say that in the ad, its against such and such regulation": he knew the regulations word for word, he knew what the regulations did and didn't say, he knew every code of conduct on the subject, every discussion which led to the code of conduct being formulated, and every case bought to the attention of the ASA.  This guy knew his stuff! Which meant that I needed to know it better and more thoroughly than he did to stand my ground when it mattered most.  It was a great lesson in law and, more importantly, its practical application.

Opposing counsel?

They're not all like that and most dis-regard the law, or alternatively make up their own version of it.  But keep in mind Rule 1, and your battleground will become a more workable place to be.

CAPping it off: The digital remit extension

This week the Advertising Association announced that the advertising industry recommends the remit of the CAP Code be extended to cover all online marketing communications including social media.

It’s anticipated that this will be achieved by Autumn 2010, but the move needs to be ratified by CAP and will be subject to appropriate consultation with the industry first.

The existing Code covers paid for marketing communications online (such as PPC, display banner advertisements, preferential rankings on price comparison sites etc), and so the proposed extension to all online marketing will require a change in the mindset and awareness of online publishers of any marketing communication to ensure their communications do not fall foul of the Code.

This is great news (albeit a perfect example of how the law takes a little while to catch up with how consumers and businesses use technology). Some initial thoughts and questions from me:

• What will constitute an “online marketing communication”? It’s easy to identify a stand-alone PPC or display banner advertisement as a piece of advertising, but the line can become blurred when the format changes. For instance, an online “infommercial”, which presumably will be caught as similar are caught in the offline environment. But where will the line be drawn? Or will a line be drawn at all? Arguably a company’s entire website could be classified as a marketing communication as the primary purpose it serves is to promote a business and its brand.

• Articles and “press releases” are regularly submitted to search engines and online directories for the purposes of search engine optimisation and are prepared with the expectation that the content will only be “viewed” by the search engines for the purpose of increasing the organic search ranking of the website in question, rather than be viewed by individual consumers. That expectation won’t change, but these documents will potentially fall under the extended remit.

• The inclusion of social media is the most important proposed change to the Code as there is a clear engagement and influence between consumer and marketer with this type of online marketing communication. A company’s marketing activity on sites such as Facebook, MySpace, YouTube, Twitter and all manner of blogs and interactive communication portals will need to be managed more carefully to ensure content does not fall foul of the Code. This will be a challenge to the mindset of marketers using social media which is per se a more informal and laissez-faire type of communication.

• Social media marketing communications thrive on interaction and user generated content. Will user-generated content be captured by the Code? My initial reaction is no but that’s based on the assumption that user generated content is generated by consumers (whom the Code is aimed to protect) and not the company doing the marketing; but what about where user generated content is generated by representatives of the company posing as consumers or persons recommending that company’s products or services? How will this type of undercover online marketing be dealt with?

• In terms of twitter: Will a company’s entire Twitter stream be captured by the new remit, or just those tweets comprising a branded marketing communication? What about the Twitter stream of an individual associated with a company but who tweets for themselves, albeit their association with the company influences their tweets? If a marketing communication is tweeted, and is non-compliant with the Code, will any re-tweets of that original tweet be treated as non-compliant also?

I'm on consultation watch, and look forward to hearing other thoughts on how the extension of the CAP Code will potentially affect online marketing practices.