Prevent mobile SMS advertising campaign lawsuits

By Emilio Castellanos

There has recently been some buzz about companies getting sued for conducting non compliant or flawed SMS campaigns. In particular I am referring to the class action suits filed against Coors Light and CBS-owned Simon & Schuster.

MillerCoors LLC is being sued for running a mobile sweepstakes promotion in which it allegedly printed invalid promotional codes. Simon & Schuster is in trouble for having allegedly sent unsolicited messages during a three-year SMS campaign for the Stephen King horror novel "The Cell."

These two class action suits highlight the need for companies embarking on SMS campaigns and promotions to ensure that campaigns meet the Mobile Marketing Association's (MMA) guidelines, receive adequate legal attention, and are administered and deployed by mobile professionals using only the best mobile infrastructure available.

The lawsuit against MillerCoors LLC is allegedly based the testimony of a sweepstakes participant who wanted tickets for an NFL 2009 game and a $100 NFLShop.com gift certificate. He claims that upon submitting his code for a chance to win, he received a message that said the code was not valid. The case claims that MillerCoors has received hundreds similar complaints from other individuals and that MillerCoors knowingly issued nearly 5 million tickets with invalid codes.

The $90 million dollar class action suit against Simon & Schuster is still pending after a new U.S. Court of Appeals overturned its previous dismissal by a lower court. In this case the plaintiff is filing on behalf or 60,000 people after the plaintiff's son received an allegedly unsolicited SMS message that read "next call you take may be your last", a message geared to promote Stephen King's horror novel, "The Cell."

Even though these two cases are both examples of how not to do SMS advertising, both of them still prove the effectiveness SMS campaigns as a powerful medium to touch the lives thousands of people in an instantaneous and personal way. The importance here is to know how to conduct campaigns that are valuable and that comply with all local and national legal regulations and that adhere to general guidelines established as best practices for the industry.

Therefore it is imperative that advertisers work with competent mobile and advertising agents that can provide a high level of service and instruction about their promotions aside from the sales and marketing perspective. The business logic of each mobile campaign must adhere to company standards and practices as well as to the general mobile guidelines as described by the MMA and the FTC. Advertisers need to start educating themselves about mobile to take decisions that help them integrate this powerful medium to their overall marketing and advertising efforts.

A mobile campaign is easy to implement, but it takes business know how to get the most out of your investment. Make time for it. It will be worth your while. Mobile is one of the newest and most effective way to build customer loyalty, so start today and do it right! Here are some general tips for advertisers:

• Consult with a competent mobile agency in your area to guide you through the process and possibilities of mobile.
• Make sure your mobile partners have a solid and transparent platform and that they can guarantee message delivery and accuracy.
• "Express Messaging" or other such terminology is not equivalent to Standard Text Messaging or SMS, be careful of this distinction.
• Never use someone else's database and never spam mobile subscribers.
• Do not use "bulk messaging" services.
• Understand opt-ins and double opt-ins.
• Be aware of the costs associated with SMS messages that carriers charge to their subscribers.
• Speak with your lawyers before launching an SMS campaign. Legal needs to review your advertising copy, privacy policy, rules and regulations, and other general requirements to make sure mobile is incorporated in all your legal copy and understands any liability issues.
• Understand opt-ins and double opt-ins.
• If you have not done it already, train or hire someone in-house to assume the responsibility for your mobile marketing and initiatives.

Protect yourself against unintended consequences resulting from bad mobile marketing practices. Remember that the best way to win a lawsuit is to avoid one in the first place. The mobile ecosystem is robust and mature enough today to address all of your questions about mobile advertising. Consult with someone in the field, develop some ideas and get your mobile feet wet.

For all MMA guidelines visit http://www.mmaglobal.com/, here are some additional Advertising and Promotion best practices:

Advertising and Promotion

Terms and Conditions

Terms and Conditions at a minimum must contain the following:

• STOP instructions in BOLD lettering.
• HELP instructions in BOLD lettering.
• Program sponsor information, defined as the program name, company name, or brand associated with the campaign.
• “Msg&Data Rates May Apply”. The text “standard rates may apply” is no longer being used. To better inform consumers that message and data changes may be applicable the new terminology above has been adopted. Different forms of the above text include: Message and Data Rates May Apply, Msg&data rates may apply, Msg&data rates may aply.
• For video advertising, Terms and Conditions must be legible.
• For all CTAs (other than Web/Print/Video, i.e. containers or packages such as soda bottle, Point of Sale): If space is not available for the terms and conditions, the location where the full terms and conditions may be accessed without charge to the consumer must be disclosed (e.g. via a website address and/or toll free phone number).
• All material terms and conditions of the program should be clearly communicated with the offer.
• Prechecked terms and conditions are not permissible. Consumer must indicate their acknowledgment of T&Cs by manual selection of the terms and conditions.
• Service availability, on a carrier-by-carrier basis, should be fully disclosed.
• Reference to website where complete T&Cs can be accessed, where applicable. If the content provider offers multiple services, separate T&C’s per service should be provided instead of generic T&C’s that cover all offered services.

All advertising, promotional material and program Help messages should clearly display the opt-out information.

Program advertising or its placement should not be deceptive about the functionality, features, or content of the underlying program.

Sweepstakes and Contest Guidelines

Sweepstakes and contests, including those conducted on the mobile platform, are among the most regulated of marketing tactics.

Definitions

• Sweepstakes - A sweepstakes is a legal game that includes a prize, and a game of chance. No consideration is allowed.
• Contest - A contest is a promotional mechanism that includes a prize, and a game of skill. Consideration is allowed, but there cannot be any element of chance.
• Lottery - A lottery is a game that includes a prize, a game of chance, and consideration. Federal legislation and State laws govern (and disallow) all lotteries for promotional purposes.
• Consideration - Although the definition of consideration varies from state to state, generally, consideration means that a willing participant is required to purchase something or pay for access to be eligible to enter a game.

Guidelines:

• Consideration may be monetary or non-monetary (an example of non-monetary consideration is a sweepstakes where the participant is required to provide detailed consumer information to be eligible).
• All sweepstakes must offer a free Alternative Method Of Entry (AMOE). Allowing participants to enter via mail, internet, fax or Interactive Voice Recognition (IVR) via a toll free number are all forms of AMOE, but are not the only forms of free AMOE.
• Anyone running a sweepstakes should seek legal guidance when drawing up rules. This is especially important if premium SMS is being considered as part of the sweepstakes.
• Poorly written and/or incomplete sweepstakes rules can, and will, result in delays in carrier program approval and/or carrier rejection, even for non-premium sweepstakes.

Download the complete guidelines advertisers need to consider while incorporating mobile into their advertising mix here: http://www.mmaglobal.com/bestpractices.pdf