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Gilbert Gottfried is looking for gainful employment, and Aflac is looking for a new voice-over man. Gottfried was terminated Monday as the voice behind Aflac’s iconic duck when he tweeted jokes and one-liners over the weekend about the recent crisis in Japan that Aflac determined to be tasteless, inappropriate and insensitive. “Gilbert's recent comments about the crisis in Japan were lacking in humor and certainly do not represent the thoughts and feelings of anyone at Aflac,” the company, which does 75 percent of its business in Japan, said in a statement.  “There is no place for anything but compassion and concern during these difficult times.”

While a celebrity getting fired for inappropriate conduct isn’t a novel concept, what makes this specific firing interesting is the social media component. Social media has the immediate effect of amplifying a conversation, and turning one twitter posting (aka, a tweet) into thousands of recycled and re-tweeted postings within seconds.¹

Aflac, as expected, invoked the morals clause under Gottfried’s contract, as the basis for his termination. While morals clauses are often the most difficult and uncomfortable provisions to negotiate in celebrity talent contracts, this recent event and several others of late demonstrate their indispensability. In that spirit, advertisers should take away at least three important points:

• Make sure your morals clause covers anything a celebrity does, says, writes or posts in any medium, including digital (it may be even be a good idea in this day and age to have a specific social media reference within the clause)
• In addition to the usual suspects like illegal or publicly obscene or indecent acts, be sure the morals clause is broad enough that it also covers things like: (i) the celebrity conducting him/herself with due regard for public morals and decency, (ii) non-disparagement of the advertiser, (iii) behavior consistent with the advertiser’s dignity, high standards and public image, and (iv) any other events that would have a materially adverse effect on the advertiser’s reputation. Equally important, make sure that any determination as to whether or not a celebrity has violated the morals clause is left up to the advertiser in its sole (i.e., subjective) discretion, rather than applying some reasonable-person standard that will take three years to resolve in the courts.
• Put in place a social media policy before it’s too late, and make sure to cross-reference the policy in your celebrity agreements. Without a carefully crafted and prudently enforced social media policy, advertisers will be increasingly faced with these kinds of rogue incidents, and are even more likely to be held accountable for the acts and omissions of their employees, consultants and celebrities.

The Gottfried happening may have been best summarized by John Diefenbach, Chairman of MBLM in New York, when he remarked, “The liberties that have been created by the Internet, by social media” must be balanced against “the idea that there’s an accountability and a responsibility if you’re being paid by someone to do a job.”

If you have questions or concerns about celebrity agreements or social media policies, feel free to contact Adam Snukal or the attorney within Reed Smith with whom you regularly interface.

¹   A tweet was the basis of another high-profile termination last week, this time an agency agreement, when an account representative from New Media Strategies, the agency entrusted with managing the Twitter account for Chrysler, tweeted, “I find it ironic that Detroit is known as the #motorcity and yet no one here knows how to #*@& drive.”  The tweet was taken down, the employee was terminated, and Chrysler announced that it would not continue to use the services of New Media Strategies.

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You’re a cutting edge digital agency, right? You have the capabilities to drive and manage your clients’ social media presence. Now, the question is, do you really want to? Today, Chrysler decided not to renew its contract with New Media Strategies (NMS) two days after an NMS employee tweeted from the @ChryslerAutos account: “I find it ironic that Detroit is known as the #motorcity and yet no one here knows how to [expletive] drive.” Although the tweet was quickly deleted, it had already spread to blogs, some of which criticized Chrysler’s “cold and corporate” response. Fortunately for you, NMS’ downfall can serve as a cautionary tale. First, determine who controls social media content, you or your client, who has access to the accounts, and whether or not content must be pre-approved or screened prior to posting. Second, have a plan in place regarding how to address negative posts (even accidental ones made by your own employees). Be creative, in some cases, you might be able to take a humorous spin on the screw up. Last, keep in mind that all it takes is one accidental tweet to kill a strategy. Be sure to check out the comments on the original article.

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Today, Twitter and the Federal Trade Commission settled charges that the micro-blogging site had engaged in unfair and deceptive trade practices because of “serious lapses in the company’s data security.” The FTC began an investigation into Twitter after hackers obtained administrative control of the service, accessed tweets that consumers had designated private, and sent out phony tweets (from then-Presidential candidate Barack Obama, Fox News, and others).

In its complaint, the FTC alleged that Twitter was vulnerable to these attacks because it failed to take certain reasonable steps to prevent unauthorized administrative control of its system. Those steps included:

• Requiring employees to use hard-to-guess administrative passwords that are not used for other programs, websites, or networks
• Prohibiting employees from storing administrative passwords in plain text within their personal e-mail accounts
• Suspending or disabling administrative passwords after a reasonable number of unsuccessful login attempts
• Providing an administrative login webpage that is made known only to authorized persons and is separate from the login page for users
• Enforcing periodic changes of administrative passwords by, for example, setting them to expire every 90 days
• Restricting access to administrative controls to employees whose jobs required it
• Imposing other reasonable restrictions on administrative access, such as by restricting access to specified IP addresses

Under the settlement, the FTC will require Twitter to set up a new security program to be assessed by a third party. It will also be prohibited from what the agency described as “misleading consumers about the extent to which it maintains and protects the security, privacy, and confidentiality of nonpublic consumer information, including the measures it takes to prevent authorized access to information and honor the privacy choices made by consumers.”

According to the FTC, this marks the 30th case brought as a result of lax security procedures, and the first against a social network.

Why This Matters:  As we have known for some time now, privacy is a hot-button issue at the FTC. To avoid an FTC investigation, you must consider whether your current privacy practices live up to both: (1) what the Commission considers “standard, reasonable” security procedures; and (2) your own privacy policy, which operates as a set of promises to consumers who use your service/patronize your business. If your security procedures fall short of either mark (or worse, both), the FTC could come calling. This then begs the question, when was the last time you audited your security and privacy procedures?

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For the past few months, my colleagues and I have been giving speeches regarding the legal and practical challenges inherent in social media. One of those “practical” challenges is developing a strategy to monetize social media initiatives. While this is of importance to brands using social media services, it is certainly important to the services themselves. To highlight this point, I usually mention that Twitter, which handles approximately 50 million Tweets a day, doesn’t make money off its service, yet people like Kim Kardashian may be getting paid up to $10,000 to Tweet (which any reader of this blog will note raises concerns under the Federal Trade Commission’s Endorsement and Testimonial Guides – for analysis of those concerns, see here and here).

Now I may have to change the presentation because Twitter has announced a plan to start advertising through the use of “Promoted Tweets.” Promoted Tweets are Tweets that businesses and organizations want to highlight to a wider group of users, according to Twitter’s company blog. In fact, Twitter has already signed up companies like Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks, and Virgin America to participate in Promoted Tweets.

As the program is currently described, Promoted Tweets will be rolled out in two phases. The first phase, which should launch today, will insert Promoted Tweets into Twitter search results, and will be seen by between 2 and 10 percent of Twitter users. The second phase will extend advertising practices to user-feeds both on Twitter.com and to third-party clients who access the service, including Tweetie (which was acquired by Twitter just a few days ago).

As is to be expected, the Promoted Tweets are themselves Tweets, meaning that Twitter users can “re-Tweet” the ad to share it with their followers, can make the ad a favorite, or can comment on/reply to it. Interestingly, though, Twitter has factored this ability into the metrics for Promoted Tweets, which may ultimately be used to determine how much an advertiser pays for the keyword. The key metric, at this stage, is something Twitter is calling “resonance,” which measures how Twitter users interact with a particular Promoted Tweet. If users don’t interact with a Promoted Tweet (replying to it, favoriting it, or re-Tweeting it), the Promoted Tweet will disappear. This is not the case for regular Tweets.

What does this mean for advertisers? Well, let’s say you’re a movie studio. You know that people use Twitter to search for reviews, thoughts, and criticisms of currently released and soon-to-be-released movies, often to help them decide what movie they should see tonight. You want them to see your movie, and you happen to have surprise “midnight screenings” scheduled in locations across the country. While you could use a regular Tweet to advertise those locations and generate both interest in and buzz about your movie, that Tweet would only be read by your followers. If you used Promoted Tweets, however, you could reach Twitter users who are not (currently) your followers, but who are interested in movies and are likely to engage whole groups of other similarly situated people. In short, Promoted Tweets can offer you a whole new means of reaching consumers.

Why This Matters: For users, this matters because you will soon see advertising on Twitter spaces that wasn’t there before. For advertisers, this matters because you will now be able to buy keywords to get your Tweets higher placement in search results (and ultimately, placement in user feeds, if Twitter follows its plan). This can be both good and bad – good for increasing exposure to your Tweets (as described above), but bad because your competitors will be able to do the same. Moreover, this raises interesting trademark law questions, especially regarding sales of trademarked words and phrases as Twitter keywords. Even now this is an area of law that is still evolving in the world of search engines like Google, so rest assured that the same issues will apply here.

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