MCGEVERAN.DOC 7/24/2009 12:01 PM DISCLOSURE, ENDORSEMENT, AND IDENTITY IN SOCIAL MARKETING William McGeveran* Social marketing is among the newest advertising trends now emerging on the internet. Using online social networks such as Face- book or MySpace, marketers could send personalized promotional messages featuring an ordinary customer to that customer’s friends. Because they reveal a customer’s browsing and buying patterns, and because they feature implied endorsements, the messages raise signifi- cant concerns about disclosure of personal matters, information qual- ity, and individuals’ ability to control the commercial exploitation of their identity. Yet social marketing falls through the cracks between several different legal paradigms that might allow its regulation— spanning from privacy to trademark and unfair competition to con- sumer protection to the appropriation tort and rights of publicity. This Article examines potential concerns with social marketing and the various legal responses available. It demonstrates that none of the existing legal paradigms, which all evolved in response to particular problems, addresses the unique new challenges posed by social mar- keting. Even though policymakers ultimately may choose not to re- gulate social marketing at all, that decision cannot be made intelli- gently without first contemplating possible problems and solutions. The Article concludes by suggesting a legal response that draws from existing law and requires only small changes. In doing so, it provides an example for adapting existing law to new technology, and it argues that law should play a more active role in establishing best practices for emerging online trends. * Associate Professor, University of Minnesota Law School. I am grateful for helpful com- ments and assistance from Ann Bartow, Dan Burk, Mike Carroll, Jesse Cheng, Danielle Citron, Tom Cotter, Deven Desai, Christine Haight Farley, James Grimmelmann, Eric Goldman, Steven Hetcher, Laura Heymann, Brian Holland, Mark Janis, Ruth Okediji, Frank Pasquale, Jessica Silbey, Lars Smith, and Diane Zimmerman. Versions of this Article were presented at the Reputation Economies in Cyberspace Symposium at Yale Law School; the Computers, Freedom, and Privacy 2008 Confe- rence in New Haven; the Intellectual Property Roundtable on User-Generated Content, Social Net- working, and Virtual Worlds at Vanderbilt University Law School; the Works in Progress in Intellec- tual Property Colloquium at Tulane University Law School; and the Intellectual Property Scholars Workshop at Drake University Law School. I received valuable research assistance from David Couil- lard and Jennifer Cross. 1105 MCGEVERAN.DOC 7/24/2009 12:01 PM 1106 UNIVERSITY OF ILLINOIS LAW REVIEW [Vol. 2009 TABLE OF CONTENTS Introduction ............................................................................................... 1106 I. Background ....................................................................................... 1109 A. Online Word of Mouth ........................................................... 1109 B. Social Networks and Online Advertising .............................. 1113 C. Social Marketing and the Example of Facebook Ads ......... 1116 II. Potential Concerns About Social Marketing ................................ 1122 A. Disclosure Concerns ................................................................ 1122 B. Information Quality Concerns ............................................... 1127 C. Identity Control Concerns ...................................................... 1131 III. Paradigmatic Legal Responses ....................................................... 1134 A. Privacy Law .............................................................................. 1135 B. Trademark and Unfair Competition Law ............................. 1144 C. “Persona Rights” Law ............................................................. 1149 D. Consumer Protection Law ...................................................... 1155 IV. Consent and Implications ................................................................ 1158 A. A Consent Paradigm? ............................................................. 1158 B. Potential Objections ................................................................ 1162 Conclusion ................................................................................................. 1165 INTRODUCTION Imagine that you wander into a bookstore. Out of curiosity, you thumb through the newest novel of an author you loathe, and then you purchase two other books, one as a gift and one for yourself. Now im- agine that the moment you turn away from the sales counter, all your friends receive an e-mail message urging them to consider buying all three books because you, their friend, had looked at them. You may raise several objections all at once. First, many shoppers would find au- tomatic disclosure to their friends of personal browsing and buying to be intrusive. Furthermore, the resulting message probably misleads its re- cipients because you do not actually want to read at least one, and per- haps two, of the listed books. Finally, you may consider this commercial exploitation of your personal identity objectionable. If the nascent prac- tice of “social marketing”1 catches on, however, something very similar 1. The term “social marketing” has been applied to marketing for charitable or socially benefi- cial causes, such as anti-smoking or other health promotion campaigns. See, e.g., Philip Kotler & Ge- rald Zaltman, Social Marketing: An Approach to Planned Social Change, 35 J. MARKETING, July 1971, at 3. For that reason, some have objected to the use of this nomenclature for marketing conducted through online social networks, as discussed in this Article. See, e.g., Spare Change, Social Marketing vs. “Social Marketing” Smackdown, http://social-marketing.com/blog/2006/09/social-marketing-vs- social-marketing.html (Sept. 6, 2006). Notwithstanding any regrettable confusion that might result, “social marketing” has become the common and convenient name to refer to the techniques discussed in this Article, and I use it here. MCGEVERAN.DOC 7/24/2009 12:01 PM No. 4] SOCIAL MARKETING 1107 may soon happen routinely on the internet, raising all of these possible concerns. The popular online social networking platform Facebook launched such an initiative, Facebook Ads, in November 2007.2 Web sites outside of Facebook could determine whether their visitors had Facebook ac- counts and, if so, disseminate information about those customers’ inter- net browsing, purchases, or other activities throughout their Facebook social networks. Thus, someone who rented a particular movie at Block- buster Video’s web site could find that fact announced to all her friends through their Facebook “News Feeds.”3 Initially, the only notice she re- ceived was the brief appearance of a pop-up window that allowed her to cancel the message; if she took no action, the site quickly removed the window and sent the message.4 Although Facebook’s initial foray into social marketing was not successful,5 several trends strongly indicate that the practice will return in some form, and Facebook is now experiment- ing with several different approaches.6 Social network providers face a compelling need to raise revenue, while advertisers crave efficient target- ing of referrals from their existing customers. The potential rewards for both parties seem certain to encourage development of new social mar- keting initiatives. Interactive tools on the internet—including social networks and other utilities for sharing opinions about products and services—hold great promise for improved communication and enhanced consumer choice. Social marketing can play a positive role in that system. If poor- ly designed, however, such a program would fail to achieve these benefits or even, in some circumstances, destroy them. Like celebrity endorsements or cross-branding agreements, social marketing is a form of reputational piggybacking. All three allow a mar- keter to benefit from an association with someone else’s well-known identity. Unlike other arrangements, however, social marketing capi- 2. As The New York Times explained it, “Yesterday, in a twist on word-of-mouth marketing, Facebook began selling ads that display people’s profile photos next to commercial messages that are shown to their friends about items they purchased or registered an opinion about.” Louise Story, Facebook Is Marketing Your Brand Preferences (with Your Permission), N.Y. TIMES, Nov. 7, 2007, at C5. For more information about the functioning of social networking, see infra Part I.B. For more details about Facebook Ads in particular, see infra Part I.C. 3. “News Feed is a constantly updating list of stories about actions your friends have taken on Facebook.” Facebook, Getting Started Guide, http://www.facebook.com/help/new_user_guide.php? guide_section=explore_facebook (last visited May 26, 2009). 4. See Amy Morganstern, Comment, In the Spotlight: Social Network Advertising and the Right of Publicity, 12 INTELL. PROP. L. BULL. 181, 183–84 (2008); Posting of Benjamin Googins to CA Secu- rity Advisor Research Blog, http://community.ca.com/blogs/securityadvisor/archive/2007/11/29/ facebook-socialads-going-too-far.aspx (Nov. 29, 2007, 14:59). 5. Ellen S. Bass, Comment, A Right in Search of a Coherent Rationale—Conceptualizing Perso- na in a Comparative Context: The United States Right of Publicity and German Personality Rights, 42 U.S.F. L. REV.