The Value of Social Media

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					ATLANTA         AUSTIN        CHICAGO      DALLAS      HOUSTON           LONDON




              The Value of Social Media

                      An Overview for Insurers

LOS ANGELES     NEW ORLEANS   NEW YORK   SACRAMENTO   SAN FRANCISCO   WASHINGTON DC
The Value of Social Media


• “Your brand isn’t what YOU say it is, it’s
  what GOOGLE says it is . . .”

     – Chris Anderson, Wired Magazine




Thomas H. Wetzel & Associates,
Inc.                                           2
The Value of Social Media




    WHAT IS SOCIAL MEDIA?



Thomas H. Wetzel & Associates,
Inc.                             3
The Value of Social Media



What is Social Media?

• Misunderstood

Thomas H. Wetzel & Associates,
Inc.                             4
The Value of Social Media

What is Social Media?

• Misunderstood

• Misread
Thomas H. Wetzel & Associates,
Inc.                             5
The Value of Social Media
What is Social Media?

• Misunderstood
• Misread
• Misused
Thomas H. Wetzel & Associates,
Inc.                             6
Social Media Is Not:




Thomas H. Wetzel & Associates,
Inc.                             7
The Many Faces of Social Media




                                 Source: Social Media 101 -
                                 http://www.slideshare.net/n
                                 owsourcing/social-media-
                                 101-ksae
                                 Brian Wallace, President,
                                 NowSourcing, Inc.




Thomas H. Wetzel & Associates,
Inc.                                                           8
The Value of Social Media

SOCIAL MEDIA CATEGORIES

• NETWORKING SITES (Facebook,
  Myspace, LinkedIn)
• PUBLISHING SITES (Twitter, YouTube,
  Wikipedia)
• SHARING SITES (Slashdot, Newsvine.com,
  Propeller, Reddit, Digg, Mixx)

Thomas H. Wetzel & Associates,
Inc.                                       9
The Value of Social Media

IT’S THE TECHNOLOGY.

• What is new is not the practice, it’s the
  technology.
• The 24/7 coffee shop
• Exponential Growth


Thomas H. Wetzel & Associates,
Inc.                                          10
The Value of Social Media
SOCIAL MEDIA IS MAINSTREAM

• 70,000,000 videos on YouTube
• 133,000,000 blogs indexed by Technorati
  since 2002
• 900,000 blog posts made, on average, in a
  24-hour period
• 300,000,000 active Facebook users

Thomas H. Wetzel & Associates,
Inc.                                          11
The Value of Social Media

WHY IS SOCIAL MEDIA SO ATTRACTIVE?

• User-generated content
• User-control
• User Permission



Thomas H. Wetzel & Associates,
Inc.                                 12
The Value of Social Media
   INBOUND vs. OUTBOUND MARKETING
Outbound Marketing    Inbound Marketing
E-mail Blasts         Blogging
Direct Mail           Viral Video
Print & Broadcast     SEO/SEM
   Advertising
Broadcast Advertising RSS


Thomas H. Wetzel & Associates,
Inc.                                      13
The Value of Social Media


How Does The Insurance Industry Fit
 Into This Social Media Explosion?




Thomas H. Wetzel & Associates,
Inc.                                  14
The Value of Social Media




Thomas H. Wetzel & Associates,
Inc.                             15
The Value of Social Media




Thomas H. Wetzel & Associates,
Inc.                             16
The Value of Social Media




Thomas H. Wetzel & Associates,
Inc.                             17
The Value of Social Media




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Inc.                             18
The Value of Social Media




Thomas H. Wetzel & Associates,
Inc.                             19
The Value of Social Media
• Policyholders are worth listening to.
• Online conversations need not be just about
  transactions.
• Policyholders will influence each other about
  your brand
• Shared connections, not siloed destinations.




Thomas H. Wetzel & Associates,
Inc.                                              20
The Value of Social Media


THREE CRITICAL TAKEAWAYS




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Inc.                             21
The Value of Social Media
TAKEAWAY #1



Think of how you can use social media,
  not how others are using it.




Thomas H. Wetzel & Associates,
Inc.                                     22
The Value of Social Media
TAKEAWAY #2

    The risks of not participating are increasing
    every day.




Thomas H. Wetzel & Associates,
Inc.                                                23
The Value of Social Media
TAKEAWAY #3

    Experimenting slowly is not the same as
    being cautious with a plan.




Thomas H. Wetzel & Associates,
Inc.                                          24
     Integrating Social Media into
            Marketing Mix




Thomas H. Wetzel & Associates,
Inc.
Social Media Audit
                          Traditional
                            Media
           Message    (Print, Radio, TV)                          Stakeholders


                       Direct Marketing                                 Stakeholders
    Stakeholder      (Phone, mail, news,                Legal
  Communications
                         trade shows                     filter


                         Social                                        Stakeholders
          Message        Media
                                      Web site
                                       Blog
                                 Microblog (twitter)
                      Social networking (Facebook, MySpace)

Thomas H. Wetzel & Associates,
Inc.
Social Media Audit
                          Traditional
                            Media
           Message    (Print, Radio, TV)                         Stakeholders


                       Direct Marketing                                Stakeholders
    Stakeholder      (Phone, mail, news,               Legal
  Communications
                         trade shows                    filter


                        Social                                        Stakeholders
           Message      Media

                                       Web site
  Who are the key                       Blog
  stakeholders?                   Microblog (twitter)
                       Social networking (Facebook, MySpace)


Thomas H. Wetzel & Associates,
Inc.
Social Media Audit
                          Traditional
                            Media
           Message    (Print, Radio, TV)                         Stakeholders


                       Direct Marketing                                Stakeholders
    Stakeholder      (Phone, mail, news,               Legal
  Communications
                         trade shows                    filter


                        Social                                        Stakeholders
          Message       Media

  What are the key                      Web site
                                         Blog
  messages?                        Microblog (twitter)
                        Social networking (Facebook, MySpace)


Thomas H. Wetzel & Associates,
Inc.
Social Media Audit
                          Traditional
                            Media
                      (Print, Radio, TV)                          Stakeholders
      Message

                       Direct Marketing                                 Stakeholders
    Stakeholder      (Phone, mail, news,                Legal
  Communications
                         trade shows                     filter


                         Social                                        Stakeholders
        Message          Media                     What are the
                                                   right media?
                                       Web site
                                        Blog
                                  Microblog (twitter)
                       Social networking (Facebook, MySpace)

Thomas H. Wetzel & Associates,
Inc.
Social Media Audit
                          Traditional
                            Media
                      (Print, Radio, TV)                        Stakeholders
          Message

                       Direct Marketing                               Stakeholders
    Stakeholder      (Phone, mail, news,              Legal
  Communications
                         trade shows                   filter


                        Social                                       Stakeholders
          Message       Media                       What are your
                                                    liabilities?
                                        Web site
                                         Blog
                                   Microblog (twitter)
                        Social networking (Facebook, MySpace)


Thomas H. Wetzel & Associates,
Inc.
Where to Start?

• Join our Facebook discussion at Social-
  Media-Management-for-Insurance-Industry

• Jumpstart your participation with our Social
  Media Management Program




Thomas H. Wetzel & Associates,
Inc.                                             31
ATLANTA         AUSTIN         CHICAGO      DALLAS      HOUSTON           LONDON




              Social Media & Insurance

                         From a Legal Standpoint

LOS ANGELES    NEW ORLEANS     NEW YORK   SACRAMENTO   SAN FRANCISCO   WASHINGTON DC
Social Media & Insurance


As insurers increasingly use this new form of
  communication, they need to adopt policies
  and guidelines and be alert to the risks.




Thomas H. Wetzel & Associates,
Inc.                                            33
Social Media Agreements


• Social media sites typically have their own
  privacy statements and user agreements
  (rules on use).

• User agreements are written in favor of the
  site’s owner.

• Typical provisions include . . .
Thomas H. Wetzel & Associates,
Inc.                                            34
Social Media Agreements
• Right to use, copy, and reproduce all
  content posted by users.
• Right to remove user-posted content at any
  time.
• No responsibility for disputes between
  users.
• Hold harmless and indemnification wording
  in favor of the site for damages suffered by
  the site due to users’ actions, content, or
  information posted. (Facebook; MySpace)

Thomas H. Wetzel & Associates,
Inc.                                             35
Social Media as Sources of
Information: Investigations
1) Social media sites are increasingly being
  mined for investigations. Increasingly
  powerful web crawlers and search engines
  let people search the web for information on
  individuals.
• Divorce lawyers searching the sites of the
  clients’ soon-to-be ex-spouse.
 Insurance companies searching sites of
  insureds.

Thomas H. Wetzel & Associates,
Inc.                                             36
Social Media as Sources of
Information: Investigations

• Workers compensation insurers searching
  sites of persons who file workers
  compensation claims.
     – The case of the claimant who filed a work-
       related back injury claim
     – The company’s surveillance failed to turn up
       anything. But his Facebook page featured him
       in bowling tournaments and bowling a perfect
       game post loss.

Thomas H. Wetzel & Associates,
Inc.                                                  37
Social Media as Sources of
Information: Discovery


2) Litigation and E-Discovery
• As we have seen in recent years, e-mails
  have become prime sources of evidence as
  lawyers focus on them to make their cases.

• We can expect social media will be even
  more fruitful sources of litigation discovery.

Thomas H. Wetzel & Associates,
Inc.                                               38
Social Media as Sources of
Information: Discovery
• Social networking sites can be very
  revealing and, therefore, extremely valuable
  or damaging, depending on one’s position.
  As a result, social media postings can
  become self-inflicted wounds.

• Put another way, “It’s permanent. It’s
  indexed. It’s searchable. If it’s inappropriate
  or even illegal, you’ve shot yourself in the
  foot.” -- Jason Falls, Social Media Explorer
  Blog, March 2009.
Thomas H. Wetzel & Associates,
Inc.                                                39
Social Media as Sources of
Information: Discovery
• The FRCP, as amended in 2006, permits
  discovery of information “stored in any
  medium.”
• This broad language now is creating
  problems for companies who potentially
  must respond to electronic discovery
  requests because Internet communications
  through social media have greatly expanded
  the scope of material subject to such
  requests.
Thomas H. Wetzel & Associates,
Inc.                                           40
Social Media as Sources of
Information: Litigation

• Complying with litigation hold orders can be
  a challenge where a company’s business is
  conducted through the alternative channels
  of social media using company-provided or
  company-supported hand-held devices.




Thomas H. Wetzel & Associates,
Inc.                                             41
Marketing & Advertising
• The various state and federal laws that
  apply to advertising generally are likely to
  apply to content on social media sites.
• These include laws proscribing false and
  misleading statements (e.g.,
  misrepresentations of benefits, advantages).
• Under the federal Lanham Act (USC, title
  15, chapter 22) businesses are prohibited
  from making false and deceptive claims in
  advertising.

Thomas H. Wetzel & Associates,
Inc.                                             42
Marketing & Advertising
• States may have comparable provisions.
  For example, New York insurance
  guidelines provide:
     "Advertisements that appear on the
     Internet are subject to all applicable
     existing statutory and regulatory
     guidelines and restrictions applicable to
     advertisements in any other medium.”
  -- NY L Circular Letter No. 5 (2001)

Thomas H. Wetzel & Associates,
Inc.                                             43
Marketing & Advertising

• Tip: Include standard disclaimers on social
  media sites to minimize company liability for
  providing incorrect, inadequate, or
  misleading information.




Thomas H. Wetzel & Associates,
Inc.                                              44
Defamation vs. Free Speech
•   Communications Decency Act (47 USC §
    230): Provides protection to Internet service
    providers against liability.

    “No provider or user of an interactive
    computer service shall be treated as the
    publisher or speaker of any information
    provided by another information content
    provider.”

Thomas H. Wetzel & Associates,
Inc.                                                45
Defamation vs. Free Speech
• In a recent survey of 438 businesses, half
  said they were concerned that social
  networking could harm their reputation.
  (Minneapolis Star, 8.26.09)
• It has been estimated that there are now
  tens of thousands of video consumer
  complaints on YouTube, and Twitter is being
  used by consumers to vent, rant, and
  organize campaigns against companies
  such as United Airlines (for breaking an
  muscian’s guitar) and Comcast .
Thomas H. Wetzel & Associates,
Inc.                                            46
Defamation vs. Free Speech

-- In 2006, a Florida woman was awarded $11.3M
    from a Louisiana woman who posted hundreds of
    defamatory statements on a blog about the plaintiff
    and her company calling her a “crook,” a “con
    artist,” and a “fraud.”
– A high school student created a parody of his
    principal on MySpace. School officials discovered
    it and suspended him for 10 days. He sued. In
    2007 a federal court ruled the school violated his
    free speech right. (Layshock v. Hermitage School
    District)

Thomas H. Wetzel & Associates,
Inc.                                                      47
Defamation vs. Free Speech

-- In March 2009, a Texas fashion designer
    sued the rock star Courtney Love claiming
    Love defamed her on Twitter when she
    called Love a “nasty lying hosebag thief,” a
    prostitute, and drug addict.

-- In early 2009, a federal court in Connecticut
    ruled a school could bar a student from
    running for secretary of the senior class for
    using crude and derogatory comments on
    her off-campus blog. (Doninger v. Niehoff.)
Thomas H. Wetzel & Associates,
Inc.                                                48
Defamation vs. Free Speech
In July 2009, a landlord, responded to a former tenant’s
    complaint on Twitter about mold with a libel lawsuit in Cook
    County, Illinois.
• "Who said sleeping in a moldy apartment was bad for you?
    Horizon Realty thinks it's okay," Amanda Bonnen
    apparently wrote in her Twitter feed.
• Horizon Group Management filed suit claiming she
    "maliciously and wrongfully published the false and
    defamatory Tweet."
• "The statements in the Tweet concerning Plaintiff were and
    are wholly false. By reason of the publication of them,
    Plaintiff has been greatly injured in its reputation as a
    landlord in Chicago," the suit alleges.
Thomas H. Wetzel & Associates,
Inc.                                                               49
• State insurance trade practice laws
  generally prohibit making malicious,
  defamatory statements about other insurers.




Thomas H. Wetzel & Associates,
Inc.                                            50
Defamation vs. Free Speech
-- Criminal cases have been brought by
   authorities for threats, cyber stalking, hate
   speech.




Thomas H. Wetzel & Associates,
Inc.                                               51
Defamation vs. Free Speech
• The courts are still working out how the law
  of defamation will be applied to the use of
  social media. While that law arguably
  applies just as much as with other forms of
  communication, with social media the
  potential damages are even greater
  because the number of potential viewers is
  much larger.
• The rule to follow is, “If you can’t say
  something good about someone, don’t
  say it in social media.”
Thomas H. Wetzel & Associates,
Inc.                                             52
Privacy
a) Individuals; Invasion of Privacy
• While some social media pages or sites can
   be designated private for use among friends
   and followers, in reality users of social
   media cannot expect information to be truly
   private.
• Information posted on Twitter can be re-
   tweeted by others.


Thomas H. Wetzel & Associates,
Inc.                                             53
Privacy
• A high school cheerleader filed suit (US Dist.
    Ct., So. Dist. Mississippi) through her
    parents against a Mississippi school district
    after she was forced to turn over her
    Facebook log-in information to her
    cheerleading coach. (7.29.09) The suit
    claims she was also subjected to cruel and
    unusual punishment after the coach
    disseminated "profanity-laced" messages to
    the rest of the staff after Jackson exchanged
    notes with a fellow cheerleader about
    politics within the
Thomas H. Wetzel & Associates, squad.
Inc.                                                54
Privacy
• And in a case that involves both privacy and
  defamation, a Vogue model sued Google for
  the identity of an anonymous blogger who
  called her a “skank” and made comments
  “concerning her appearance, hygiene and
  sexual conduct.” In August 2009, the court
  ordered Google to release her IP and email
  address. The blogger then sued Google for
  $15M for disclosing her identity (claiming
  Google "breached its fiduciary duty to
  protect her expectation of anonymity." ).
Thomas H. Wetzel & Associates,
Inc.                                             55
Privacy
b) Companies
• Numerous state and federal laws governing
   privacy potentially apply when companies use
   social media.
• One of the principal laws in this area is the
   Gramm-Leach-Bliley Act enacted by Congress in
   1999 and applicable to financial institutions.
• Companies need to protect against the inadvertent
   communication of non-public personal information
   including personally identifiable financial
   information.
Thomas H. Wetzel & Associates,
Inc.                                                  56
Privacy
• Personal health information is also protected
  by the federal Health Insurance Portability
  and Accountability Act (HIPPA) of 1996.
  Title IV of this Act protects the privacy of
  patient information. While it may seem
  unlikely that such information would be
  disclosed through social media, as
  companies and employees expand their use
  of social media, the potential for inadvertent
  disclosure increases.

Thomas H. Wetzel & Associates,
Inc.                                               57
Privacy
• The federal Fair Credit Reporting Act may
  also apply. The FCRA restricts the
  subsequent use and distribution of
  information obtained from a consumer’s
  credit report. A careless employee who
  inadvertently discloses such information via
  a tweet could subject the company to liability
  under the FCRA.



Thomas H. Wetzel & Associates,
Inc.                                               58
Privacy
• Lastly, companies must keep in mind that
  they are also held accountable to the
  standards and requirements they establish
  for themselves.
• If an employee violates a privacy policy
  posted on company’s Web site and mailed
  out to customers, the company risks being
  sanctioned by the Federal Trade
  Commission and/or state agencies under
  applicable state laws or sued for failure to
  comply with its own policy.
Thomas H. Wetzel & Associates,
Inc.                                             59
Privacy
• The rules to follow are, “If you don’t want
  it to be public, don’t say it in social
  media.”
And . . .
• Assume that social media sites are not
  secure places to post or discuss
  identifiable personal information.



Thomas H. Wetzel & Associates,
Inc.                                            60
Employment Law
• When employees make comments about
  their fellow employees or employers they
  potentially expose themselves and their
  employers to liability.
• This includes the exchange of comments
  between supervisors about the character
  and conduct of their subordinates.
• Problems can arise when employees use
  social media outside of work if they mention
  the company in their postings.
Thomas H. Wetzel & Associates,
Inc.                                             61
Employment Law
• In July 2009, a beauty school student was
  sued by her employer for comments she
  posted on Facebook. The Salon
  Professional Academy in Kane County,
  Illinois claims she made comments accusing
  teachers of sub-par teaching skills and
  promiscuity. The plaintiff alleges “libel per
  se” by publishing and distributing false
  statements. Apparently the student
  intended to create a place for classmates to
  vent.
Thomas H. Wetzel & Associates,
Inc.                                              62
Employment Law
• Making negative comments about another
  employee, or a supervisor making negative
  comments about a subordinate, carry
  obvious risks.
• Even making recommendations, such as on
  LinkedIn, can be problematic.
• If you make a favorable recommendation
  and an employee is not promoted, he/she
  can later use it as a basis for a
  discrimination claim.
Thomas H. Wetzel & Associates,
Inc.                                          63
Employment Law
• Companies should review their employment
  policies on electronic communications and
  revise them to cover the use of social media,
  just as they have adopted policies on the
  use of cell phones, e-mail and the Internet.




Thomas H. Wetzel & Associates,
Inc.                                              64
Privileged, Confidential
Information & Trade Secrets
• The unintentional loss of privileged
  information and trade secrets can occur as a
  result of careless disclosures by employees
  when using social media to communicate
  with outsiders, including friends and even
  regulators.




Thomas H. Wetzel & Associates,
Inc.                                             65
Privileged, Confidential
Information & Trade Secrets
• Companies need to make sure their
  employees are educated about this risk and
  instructed on how to avoid it. Employees
  must be aware of and assume that a
  communication containing sensitive
  information that is intended for one person
  could be subsequently redistributed to
  others, thereby resulting in a loss of
  protection and a waiver of privilege through
  public disclosure.

Thomas H. Wetzel & Associates,
Inc.                                             66
Intellectual Property
• There can be issues of ownership and rights
  to the use of material that is generated by
  employees and third parties and posted on
  social media sites such as Twitter,
  Facebook and MySpace.
• This includes copyrighted material, patented
  designs or material, trademarks, trade
  names, trade dress, trade secrets, and trade
  slogans and phrases.

Thomas H. Wetzel & Associates,
Inc.                                             67
Intellectual Property

• The use of third parties’ trademarks,
  copyrighted material or other intellectual
  property in postings or other
  communications on social media sites could
  infringe third parties’ intellectual property
  rights.
• Licensing issues may also arise.


Thomas H. Wetzel & Associates,
Inc.                                              68
Intellectual Property
• E.g., employee uses company logos and marks
  without prior permission, such as on employee
  chat sites.

• E.g., an insurance agent liberally adds insurer
  trademarks on an agency Twitter site. Is the
  company liable for the statements of the agent?
  Compare the situation where a company knows
  and demands the agent stop using its mark with
  the situation where the company does nothing and
  basically acquiesces in the agent’s conduct.

Thomas H. Wetzel & Associates,
Inc.                                                 69
Records
• Postings on social media should be
  considered records. When you enter
  information on a social media site, you
  create an electronic record.
• As such, companies need to take steps to
  preserve them where required by law, even
  if the content is removed.



Thomas H. Wetzel & Associates,
Inc.                                          70
Records
• There can be issues of who owns or has
  custody and control of the information.

• Company record retention policies need to
  be updated to cover social media
  communications.




Thomas H. Wetzel & Associates,
Inc.                                          71
Ethics
• Is “friending” someone deceitfully on
  Facebook unethical? (Rule 1.4) (I.e.,
  pretending to be someone you are not, or
  asking someone who is a friend of the target
  to obtain info for you.)
• This issue can arise when a party attempts
  to find out information about an adverse
  party or witness. On Facebook you will see
  all of that person’s friends. The question is,
  is it ethical to contact one of those friends to
  find out info indirectly about the person?
Thomas H. Wetzel & Associates,
Inc.                                                 72
Ethics
• While not specifically addressed by
  insurance laws, could be considered making
  false or misleading statements.
• On the one hand, you can argue there is no
  real expectation of privacy on Facebook.
  But if someone has to go through a number
  of hoops to become a friend, then there
  could be a reasonable expectation of privacy
  by the target person.

Thomas H. Wetzel & Associates,
Inc.                                             73
Ethics

• Just undertaking a normal transaction where
  you make an inquiry is not a problem, it’s
  where you deceitfully misrepresent yourself
  or your purpose that raises ethical issues.




Thomas H. Wetzel & Associates,
Inc.                                            74
CONCLUSION: Guidelines
• So, what should a business do?

• First, it should audit and review how it, or its
  employees, are currently using social media.
• It should adopt guidelines and best practices
  for employees to follow for communications
  over social media.



Thomas H. Wetzel & Associates,
Inc.                                                 75
CONCLUSION: Guidelines

• Think of guidelines as an insurance policy
  against future trouble. Courts and
  regulators are more likely to be sympathetic
  and listen to your story if you adopted
  guidelines and made a good faith attempt to
  follow them.



Thomas H. Wetzel & Associates,
Inc.                                             76
CONCLUSION: Guidelines

• Adopting and enforcing guidelines now will
  save time and money in the long run.
• Doing nothing puts a company at risk for
  greater costs in the future.




Thomas H. Wetzel & Associates,
Inc.                                           77