When leveraging user-generated content (UGC) in your marketing strategy, it's crucial to understand the regulatory landscape governing such practices in the Asia-Pacific (APAC) region. Various regulatory bodies, like BPOM (National Agency of Drug and Food Control) in Indonesia, the Advertising Standards Council of India (ASCI) and the Ad Standards Council (ASC) in the Philippines, have established guidelines to ensure that marketing claims are truthful and not misleading.
The consequences of infringing on these regulations in their respective countries, can be devastating to any marketing budget. There have been multiple cases of marketing materials being recalled in mass, or worse recalling the product due to a non-approved claim on the label. Make sure your products or marketing materials make it to the shelves after passing the screening of the local regulatory bodies, to avoid any "backfire" that would be irreversible.
So, how do you stay one step ahead of the competition and ensure full success of your UGC campaign you ask, let’s dive in.
1. Understanding Regulatory Bodies and Their Guidelines for UGC
BPOM in Indonesia for example, regulates the guidelines for the control of claims on processed food labels and advertisements. While basic claims (ie. No added sugar) exist within their regulations provided specific requirements are adhered to; custom claims require a written approval from the Chairperson of the Authority. Such claims need to be backed by analysis results from accredited laboratories, and requirements are even more stringent for products aimed at children below 3 y.o.
Another example in the Philippines, where regulations are particularly stringent. The ASC requires that marketing claims based on UGC, such as "90% of users prefer our product," must be substantiated with data collected from a diverse and representative sample. This includes testing with a minimum number of users from both rural and urban areas across each geographical region.
2. Ensuring Legal Usability of User-Generated Content
To legally use UGC, brands must obtain proper permissions from the content creators. This involves getting explicit consent from users to use their reviews, photos, or videos in marketing campaigns. Implementing a clear and concise terms of service agreement on your platform can facilitate this process. The agreement should outline how the content will be used, ensuring transparency and protecting the brand from potential legal disputes.
Additionally, it’s important to respect intellectual property rights. Using UGC without permission can lead to copyright infringement issues. Product Marketers and Consumer Insight Teams should work closely with their legal teams to ensure all UGC is legally usable. Ensure that the content creators retain ownership of their work while granting the brand a license to use it. This can be done through clear agreements that specify the scope of usage, such as in advertising, social media, or other promotional channels.
Respecting IP rights also involves monitoring for unauthorized use of copyrighted material. Implementing robust IP management practices can help protect both the brand and the content creators from legal disputes.
3. Crafting Marketing Claims Based on UGC: Compliance and Accuracy
When using UGC to support marketing claims, it's essential to ensure compliance with advertising standards. Claims such as "90% of users think our product is better than the competition" must be substantiated with reliable data. This means conducting thorough and unbiased surveys, documenting the methodology, and retaining the data for potential audits.
Avoid exaggerating or cherry-picking positive feedback to create misleading claims. Instead, present a balanced view that accurately reflects user opinions. Misleading claims not only attract regulatory penalties but also damage the brand’s credibility.
Displaying clear disclaimers that disclose the source of data, time of study, and providing access to methodology can help substantiate the claims further. Reliance on an impartial third party source of data and displaying their endorsement via a seal and logo can help consumers easily validate a claim.
4. Best Practices for Mitigating Legal Risks with UGC
To mitigate legal risks associated with UGC, consider the following best practices:
- Develop Clear Policies: Establish clear guidelines on how UGC will be collected, verified, and used. Ensure these policies comply with relevant legal standards.
- Obtain Explicit Consent: Use clear and transparent terms of service agreements to obtain explicit consent from users for using their content.
- Verify Accuracy: Ensure all marketing claims based on UGC are accurate, verifiable, and not misleading.
- Ensure Representative Sampling: Account for minimum numbers of participants and provide a buffer to accommodate potential drop rates in respondents.
- Monitor Compliance: Regularly review and update your UGC policies to stay compliant with evolving regulations and standards.
- Educate Your Team: Train your marketing team on the legal considerations and best practices for using UGC; and to resist the urge to filter out negative feedback. (Relevant read: The Unexpected Value of Negative Reviews: A Comprehensive Look at Consumer Trust in Ratings).
By implementing these strategies, Product marketers and Consumer Insight Teams can effectively leverage UGC while minimizing legal risks and maintaining consumer trust.
