FDA keeping an eye on social media

“Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” – Ronald Reagan

When it comes to the advent of social media, Ronald Reagan looks to be getting one-third of the equation right.

No, government has not yet adopted a Facebook tax. Nor has it enacted a subsidy for Twitter users (though we don’t know exactly what was in this year’s stimulus bill, do we?)

Two powerful government agencies are, however, sharpening their regulatory pencil as social media sites emerge as a preferred method of communication for consumers and large swaths of corporate America. If your company is thinking of getting active on social media, get to know these developments.

The Food & Drug Administration holds a hearing this morning on how health care companies market FDA-regulated products on the internet and social media sites. The agency’s crosshairs are focused most sharply on prescription drugs for humans and animals, prescription biologics, and medical devices.

Folks in my line of work usually bristle at the mere mention of regulating such activity, but there are two reasons that the FDA’s involvement may actually be a good thing.

First, surveys show that two-thirds of adults who research medical information online acknowledge that the information they find influences their medical decision-making.

Second, drug and medical device makers are skittish of using social media because there are no clear guidelines for what’s appropriate communication. Will they run afoul of the “direct to consumer” advertising rules that govern television and print advertising? How can they give “fair balance” to their drugs within 140 characters on Twitter? Nobody wants to be the guinea pig.

In other words, health care companies are avoiding 21st century technology because they are governed by 20th century FDA regulations.

The biggest loser in this equation is the consumer. There’s plenty of demand for health care information online, but without clear regulations there’s not a lot of supply.

The FDA needs to modernize how it regulates such communications in a way that benefits patients and companies alike. Failure to do so will mean that many drug companies remain on the sidelines, while consumers surf less reliable chat rooms and blogs for important medical information.

Here’s hoping the FDA governs with a light touch and develops a framework that encourages communication rather than stifling it.

The FDA isn’t the only agency setting its sights on social media. The Federal Trade Commission issued guidelines last month requiring that relationships between a company and bloggers who review that company’s products be made transparent to the public. The FTC also took steps to ensure that product reviews on blogs are more accurate for consumers. Violating the rules could mean stiff fines for the company and the blogger alike.

The new rules deserve your attention. Ford, Audi, General Mills, and Rubbermaid are just a few of the companies that work with bloggers to promote their product. Surveys show that consumers overwhelmingly trust product reviews they get from familiar personalities, whether it be a respected blogger or the next door neighbor. The FTC’s rules won’t change that.

Take Rubbermaid for example. To reach out to young moms, the Tupperware maker offered to remake the kitchen of widely-read “mommy blogger” and to make coupons available to her readers on her blog. Rubbermaid disclosed publicly that it was a paid sponsorship campaign, and still watched as more than 1,000 readers of the blog downloaded the company’s coupon.

The lesson? Blogger outreach can be good for your company, the blogger, and your customers, even in a newly-regulated environment.

So what to make of all this government scrutiny? In my mind, it is reason to your sharpen your social media strategy, not abandon it. As the old saying goes, corporate communicators need to “fish where the fish are” in a way that respects the consumer and the regulatory frameworks being built in Washington.

The consumer is rapidly migrating to social networking platforms for information they trust. The question is whether your business will meet them there with credible, trustworthy product information.

(This column was first published in The Maryland Daily Record on Friday, November 13, 2009.)

Tuesday's quick reads: car dealers & soda companies talk PR; word of mouth marketing takes off

1.) For Twitter, a tweet in time can avert a PR mess (The Wall Street Journal) -- A growing number of businesses are tracking social-media outlets such as Facebook and Twitter to gauge consumer sentiment and avert potential public-relations problems. Ford, PepsiCo, and Southwest Airlines, among others, are deploying software and assigning employees to monitor Internet postings and blogs. They're also assigning senior leaders to craft corporate strategies for social media.

2.) Car dealerships say PR push helped save them (The Chicago Tribune) -- Thomas McCaslin might never know for sure why General Motors called two weeks ago to say his 80-year-old dealership in the heart of Nebraska cattle country wouldn't close after all. He has a feeling that a hamburger cookout and an old-fashioned brand of political lobbying had something to do with it.

3.) Word of mouth marketing hits $1.5 billion (AdWeek) -- Now that's a lot of chatter. Spending behind word-of-mouth marketing hit $1.54 billion last year, according to PQ Media.

4.) How to pitch USA Today's bloggers (Ragan) -- USA Today’s blogs serve a triple purpose, says Chet Czarniak, the paper’s online managing editor. “They’re for surveillance—connecting the readers to the story,” and ensuring online readers can dig deeper into news, Czarniak explains. Second, blogs are for “getting ahead of a story,” or breaking news in a way that’s not practical or fast enough for print or elsewhere online.

Philadelphia Eagles give bloggers respect...and a trailer

(Photo Credit: New York Times)
Sports Illustrated's Peter King reports this week that the NFL's Philadelphia Eagles will provide local bloggers and blogging reporters with their own trailer at this year's mini-camp to help them meet the public's expectation for real-time updates. Here's a quote from King's "Monday Morning Quarterback" column:

"Reporting on the NFL has become such a 'now' business,'' Eagles PR czar Derek Boyko said. "I saw this [trailer] as being in the 'need' category, because so many bloggers are doing immediate stories, and now the beat reporters are doing the blogging, too.''

Is your industry any different? Granted, few organizations command the attention and scrutiny of an NFL franchise, but reporting and commentary is a "now" business in just about every industry. I won't suggest that you lobby your CFO for a blogger trailer just yet, but the Eagles' creative strategy ought to prompt a few questions:

1. What opinion, if any, does your company's leadership have of bloggers generally? Does that opinion accurately reflect the commentary and readership of bloggers who cover your industry, product, or company?

2. When was the last time you monitored the blogosphere or Twitter for references to your company, product, or industry? What did you find? Was it accurate? How did you respond?

3. What has your organization done to introduce itself to industry bloggers?

4. What has your organization done to make information as accessible as possible for industry bloggers who cover your company, product, or industry?

We have written in the past about the dangers of dismissing bloggers as a fringe community. Highly successful companies like Dell have learned that determined bloggers with an interesting story line can influence public opinion on a significant scale.

You may not be rooting for Eagles on Sundays this Fall, but we'd all be wise to learn from their forward-thinking approach to blogger relationships.

Some lawsuits are more than just lawsuits

America's favorite coffee shop has dominated the headlines of late due to its dramatic "right-sizing" announcement, but today we focus on a seperate matter that has dogged Starbucks for years: a series of class action lawsuits alleging violations of the Fair Labor Standards Act. Most recently, a Superior Court Judge in California ordered Starbucks to serve up $100 million in backtips to its baristas, who claimed that supervisors were sharing tips in violation of state law.

Put yourself in a reporter's shoes: The enormity of Starbucks' market share, its large and increasingly unionized workforce, and the ubiquitous role the company plays in American life makes the story too good to pass up. When the press catches interest, the company's reputation is at stake with the public at large.

Lawsuits like this reinforce our belief that crisis planning is as valuable as crisis response. Forward-thinking companies identify vulnerabilities, anticipate challenges to their reputation, and plan accordingly. Enter McDonald's, the fast food giant that is taking an innovative approach to communicating with employees. McDonald's intends to hire a company blogger for its internal website - called "StationM" - to more effectively communicate with an increasingly web-based workforce. StationM also allows employees to network with one another, share photos and videos, discuss best practices, and - hopefully - build a sense of family pride in the McDonald's brand. It also gives McDonald's a hi-tech approach to preventing the employee discontent Starbucks faced by educating mid-level supervisors about acceptable and unacceptable practices in the workplace.

Hiring a blogger will not alone prevent FLSA lawsuits, particularly for companies like McDonald's and Starbucks that have combined workforces of nearly 900,000. However, innovative approaches to employees relations can help mitigate the challenges many companies face in such a litigious society.