Branding in the Collaborative Economy (White Paper Excerpt)

This week, marketers and brands are meeting in Kansas City at the Resilient Summit to discuss the significance of the collaborative economy.   The term “collaborative economy” describes an economic system where consumers prefer to share, rather than purchase, goods and services. It seeks to empower consumers and free them from the burdens of ownership. As this economy redefines established business models, at Collen IP, we pondered the legal implications for brands’ intellectual property and their advertising and marketing initiatives. The result is the firm’s newly released white paper: Branding in the Collaborative Economy: Legal Implications for Intellectual Property & Consumer Outreach.   This white paper explores the tension between intellectual property and the collaborative philosophy. We suggest how brand owners can maintain and protect their valuable intellectual property assets and remain relevant players in the collaborative marketplace without violating the law. We also offer practical advice for branding in the collaborative economy and best practices in the following areas: Trademarks, Copyrights, Advertising & Marketing, Counterfeit and Grey Market Goods, and Patents. 

The excerpt below discusses advertising and marketing initiatives in this emerging economy. Click here for the full PDF.

Advertising and marketing are the driving forces in the collaborative economy.  Publicity may come from brands seeking to leverage this new economy, but the bulk of the commercial speech will come from the crowd.  Social media and mobile marketing will spread information about available opportunities, and more players will buy into the collaborative model as they witness its power, ease of access, and savings potential.

At the same time, the collaborative economy can only flourish if consumers trust it more than they trust the traditional brand experience.  As consumers leverage the collaborative economy to access luxury markets, they will rely on each other and their testimonials for confirmation that the experience or goods available are legitimate and of high quality. The crowd’s advertising and marketing efforts will fuel the collaborative economy as much as, if not more than, brands’ promotion of commercial opportunity.

As the line between brand and consumer erodes and consumers create their own marketing opportunities, brands will have to contend with a maze of regulation. Historically, advertising and marketing initiatives have always been limited by the need to avoid deceptive and unfair speech. As the collaborative market matures, undoubtedly, certain elements will look to manipulate the conversation to their advantage, resulting in campaigns that dupe the consumer. In a sharing economy and, ultimately, a making economy because of 3-D printing, consumers may be at increased risk for subterfuge.  Regulators on the federal, state, and local level monitor the marketplace and will assert themselves if they feel consumers are at risk. Commercial speech in the form of advertising and marketing will continue to feel the squeeze of regulation until or unless various industries ban together to create ethical practices. Individual brands, therefore, must remember to vet their campaigns for legal issues or expose themselves to risk of financial and even potentially criminal penalties.

The collaborative economy is pushing regulatory boundaries, and at the same time, redefining notions of ownership and whose responsibility it is to make sure that consumers are safe.  Collaborative operators need to take constant stock of the ever changing regulatory landscape and ensure that their business model remain sustainable.

BEST PRACTICES FOR CONSUMER OUTREACH:

• Remember that sharing may seem natural, but not all speech about sharing will enjoy vast First Amendment protection.  Sharing is a commercial venture in the collaborative economy and is subject to all the rules for commercial speech.
• The experiences of friends and other consumers our key marketing components for the collaborative economy.  Advertising that includes references to these experiences is still subject to regulation by the FTC and the various states rules to prevent deceptive advertising.
• Disclosures and disclaimers have already come under regulatory scrutiny in e-commerce.  Undoubtedly, in the collaborative economy, it will be more important to make all disclaimers clear and conspicuous and unavoidable for the consumer.
• If marketing a specific advantage of goods and services in the collaborative space (e.g. good for the environment, Made in the USA), remember that existing regulations apply.
• Taking advantage of old and new ways to communicate with consumers by marketing to them on their mobile devices for landline telephones will be important in the collaborative economy.  At the same time, these marketing activities are subject to restriction and create legal risk for operators who ignore the law.
• Be mindful of the numerous regulations of advertising and marketing initiatives in the collaborative economy, including FTC regulations, acts of Congress, and state and local regulatory efforts. Be on the lookout for new multi-disciplinary regulations that may affect operations in the collaborative economy.