Ethics and Legalities of Digital Marketing

As a business, it is important to operate within the boundaries of ethics and legalities in digital marketing. As digital marketing takes centre stage, knowing where to draw the line can be a bit blurred. Social media sites and platforms can be a bit risqué depending on the user. The ethics and legalities of digital marketing have a huge impact on your business and should be carefully considered. As an organisation that operates under a certain set of laws, how do you engage your audience while still maintaining distance from personal opinions?

Why Are There Legal and Ethical Constraints on Marketing Plan Development

Because digital marketing is both incredibly new and incredibly powerful. The rise of the internet means that just about anyone has the power to shape the beliefs of a large chunk of the general public. This can be used for both good and bad.

Additionally, society hasn’t quite caught up. Specifically, governments have a very little idea of how best to deal with online tools like social media. This means you have to be very careful, as you’re often operating in a legal grey area.

What Exactly is Ethics in Digital Marketing?

Digital marketing is the process of promoting a brand using a variety of online tactics. These tactics include having a website, blogs, social media, mobile marketing and more. Although similar to traditional advertising, the reach occurs almost instantaneously and is more engaged with the public. This type of advertising is more sophisticated and can be tailored to specific audiences.

There are a number of things to consider when dealing with the ethics of digital marketing. There are a number of ethical traditions:

  • Ethics of virtue – Personal character is driven and decision driven
  • Utilitarianism – Considering the greatest good. This is making a decision that is judged as ethical or unethical based exclusively on outcomes or consequences.
  • Duty-based theory – Putting the consequences aside. This is when a decision is judged as ethical or unethical based solely on the intentions or reasons of the party making a decision.

According to the (AMA) American Marketing Association’s statement of ethics, there are 6 core values of ethics that your business should be following. These core values are honesty, fairness, respect, transparency, responsibility and citizenship. Following these 6 values will improve your businesses reputation and build trust with your customers.

When considering utilitarianism and digital marketing, the following apply:

  • Digital and new media marketing use the utilitarian argument.
  • Using egoism benefits one individual or organisation instead of all.
  • There are a number of benefits, including targeted advertising, low search costs, more interesting and relevant websites.
  • The costs include reduced privacy and fears of big brother.

In the bigger realm of things, it may be wise to follow standards of conduct based on the American Bar Association (ABA). They have specific guidelines that discuss advertising, rules for blogging, social media, and marketing activity. While the rules change based on state, having your general counsel develop a set of rules and regulations based on these documents can cover you in the event any legal matters come to light.

Here is a general overview:

  • False statements – Don’t do it. When advertising and using social media, it is important to be as transparent and truthful as possible. Users appreciate brands that can own up to their flaws, missteps and mistakes.
  • False promises – Don’t do it. You should be able to stand by every statement you make regarding promotions and advertising. If you are advertising a prize, make sure you stick to the terms and conditions. Any deviation could be a social nightmare.

There are a number of ethical issues in digital media, including:

  • There are a number of vulnerable customers.
  • Benefits vs. costs.
  • There is a lack of transparency.
  • Ownership of information.
  • Concerns of trust and integrity

What are some Ethical Issues in Social Media?

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Social media has a number of ethical issues that can harm the integrity of your digital marketing efforts:

  • There is some confusion on what social media tools are. They are designed for content creation and communication. They are not specifically designed to be marketing tools.
  • There is a lack of transparency of communicators
  • Social media helps build relationships through real conversations. With social media, there tends to be a lack of trust.
  • The benefits and costs of social media are sometimes skewed.
  • Some people who use social media have aliases and are not authentic.

With so many ethical and legal issues present in the digital marketing space, how can companies successfully balance these issues in that space? There are a number of things that can be done to counteract ethical and legal issues for your organisation.

Legal and Social Issues in Online Marketing

First, the company must be committed to being socially responsible for every move made through digital media. If not, the company faces legal implications. This could be as simple as having a disclaimer throughout your digital advertising pieces. Your marketing team should operate with the highest ethical standards, straying away from the risqué or questionable posts that could harm the brand.

In every promotion or contest, there needs to be a disclosure so your audiences will not feel as if they have been deceived. This is very simple. Either have a link that leads to the terms and conditions or adds a line at the bottom with pertinent information to make sure the organisation has operated with the best ethical judgement and the highest legal standards. Because brands are accountable for disclosing information to their audiences, it is wise to take the proper steps to remain protected. Here are a few suggestions:

Media Kit

This should be provided to all the influencers and bloggers the company employs. It should include the best practices you follow as an organisation, along with other facts about the company. This way, your company will have legal standing in the event a blogger or influencer misrepresents the brand.

Have an Authentic Network

This is key. If you have a strong network of influencers who are familiar with the brand and your ethical standing, you will not have to worry about whether or not they will misrepresent your brand.

Media Audits

Your marketing team should be tracking your social content on a quarterly basis to ensure your posts are clearly labelled. If you find some of those posts are not in compliance, you can track the influencers and have them make the fix.

Use the Word “Sponsored”

This is a quick and easy way to ensure your digital media is always covered. Using the word “sponsored” on all your digital campaigns and other media will alert your audiences it is a sponsored post from your brand. This way you are being transparent with your customers.

Open the Lines of Communication

When using digital media, it is best to maintain an open door policy and communicate with your audiences on a consistent basis. This not only helps build brand integrity but can help in the event of a mishap. When audiences trust you, it is easier for them to forgive a mistake, rather than having disgruntled customers that make things worse by sharing their experiences on social media.

On the legal side, there are three main issues affecting digital marketers:

Privacy and Data Collection

In order to be legally compliant, you must notify people prior to collecting their personal information, although the UK may have more permissive laws for current customers. It is important to list in your privacy policy the types of information you collect; how you share the information; the process in place that will allow those customers to review and change their information; and the effective date of the policy. If there have been changes to the policy, those dates must also be included.

Having a privacy policy on your site specifically stating that moving on through the site will be an agreement to collect their information is key. If you need to take it a step further, add a box that will solidify their agreement.

Legal and Social Issues in Online Marketing: GDPR

Of course, we can’t talk about the legal and ethical constraints on marketing plans without mentioning GDPR. This is the most comprehensive data protection regulation in the world. It about after the EU recognised the protection of personal data as a human right in 2009.

This throws up a number of legal, regulatory and ethical constraints in sales or marketing. The core principles of the GDPR which impact the ethics of digital marketing include:

  • Consent,
  • Purpose limitation,
  • Limits on data transfers,
  • Breach reporting requirements,
  • Limits on automated data processing.

This introduced a large number of legal and ethical constraints in marketing. Indeed, an ethical social media agency must now have a wide variety of policies and procedures in place to ensure ongoing GDPR compliance for their clients.

Cloud Storage and Security Methods

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Data protection and privacy are emerging ethical and legal issues in digital marketing.

You must make sure all customers know you have protocols in place to secure their sensitive information. There should also be disclaimers on how this is done, and whether or not your information gathering process is SSL protected.

Intellectual Property

This is by far the most complicated issue facing digital marketing. Protecting your intellectual property through trademarks and copyright is crucial in this day and time. It is just as important to make sure you have not used anyone else’s trademark or copyright. How can you accomplish this?

  • Register your trademark.
  • Copyright your marketing language.
  • Advertising

Under the FTC, all advertising and marketing must be above board with no elements of unfair or deceptive advertising. There is also an anti-spam law in effect in the US, which is called CAN-SPAM which could affect your global digital marketing efforts. There are a number of guidelines under the CAN-SPAM act that should be followed for compliance.

Having an attorney working with your marketing team will assist in drafting ethics and legal policies for your organisation that will protect you in every aspect of your digital marketing efforts. Understanding the ethics and legalities of digital marketing can help your company avoid litigation and questions about your ethical integrity now and in the future.

Legal, Ethical and Social Aspects of Advertising Online

So much about the theory. Let’s take a look at a couple of concrete ways that the ethics of digital marketing will actually impact your online campaigns. We’ll start with display ads, as these are probably the place where online marketing ethics have the most obvious impact.

An online ad essentially has two components:

  1. Creativity – Including elements like copy, imagery, videos and landing pages.
  2. Targeting – This is how you determine who will see your ads. Specifically, modern advertisers use a wealth of behavioural and demographic data to target online ads.

Perhaps you can already see how what we’ve discussed about ethics in digital marketing applies here. From a legal point of view, you need to ensure that you have the right to use any data or intellectual property in your display ads.

However, regulatory issues in online advertising are somewhat underdeveloped. Unlike traditional advertising, the exact law about what you can or can’t say in an online ad is often unclear. Generally, the final word comes from the social media platforms, rather than governments.

Online ads also create a host of new problems for ethics in digital marketing.

In some data-driven ad targeting can even be too effective. Since social media users see ads based on their interests, advertising can often reinforce their views and create echo chambers. This is a particular ethical issue in political advertising, as users will only ever hear one side of the story.

It is important that your digital marketing does not mislead your customers as this can destroy the trust that is built. Many companies are guilty of this especially when it comes to their pledges to the environment. Businesses greenwash their digital marketing to appeal to sustainable conscious consumers.

Ethical Issues of Online Marketing : Social Media Influencers

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It is common for businesses to use social media influencers to promote their brand. They compensate influencers with money or free gifts and in return influencers will do a sponsored post for them. Social media influencers can allow a business to reach a larger target audience. When choosing a social media influencer to work with it is important to consider someone who’s values align with the values of your business.

A fashion brand that values sustainability should work with a social media influencer that cares about the environment and sustainable fashion as working with an influencer who wears fast fashion would harm the brands creditability. A social media influencers actions can directly impact your businesses brand image. If an influencer gets wrapped up in a controversy their engagement with your business may damage and discredit your brand.

It’s no secret that governments have a hard time regulating social networks. This can make the ethics and legalities of digital marketing hard to pin down. There are two reasons why the law struggles to deal with social media:

  1. Social networking sites have a new business model. Regulators don’t know how to treat them based on existing categories of businesses. Are they publishers, utilities or technology companies?
  2. Social media companies are incredibly powerful. Google’s annual revenues are over $160 billion. This is higher than the annual GDP of some European countries.

Because of this, the law can’t always keep pace with new ethical constraints in marketing.

As such, complying with legal and regulatory issues is the bare minimum you should do. Indeed, ethical issues can have just as large an impact on your businesses bottom line, due to reputational damage. As such, it’s vital to work with an ethical digital marketing agency.



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