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April 14, 2014

Duane Reade's Social Media Mistake Might Cost Them $6 Million

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pay_with_a_tweetNote to self: Never mention a celebrity on Twitter from a company account. Recently, it hasn't worked out well for two different brands.

A few weeks ago, people were in an uproar over Red Sox slugger Big Papi's selfie with the President. Then, last week, Katherine Heigl issued a lawsuit to Duane Reade for posting a paparazzi photo of her on their Facebook and Twitter accounts.

Here's what they posted on Twitter (Facebook's post was almost identical):


The company's tweet links to a entertainment blogger's article on Heigl, not the Duane Reade website. Yet that distinction doesn't appear to matter to Heigl's attorneys who filed a $6 million lawsuit alleging the retailer "misused and misappropriated the photograph for its own commercial advertising, distributing the photo with Duane Reade's own promotional slogans on its Twitter and Facebook accounts, all without Ms. Heigl's knowledge or approval." That's more money than most companies have in their marketing budget.

Many people have been taking Heigl's side on the issue -- Duane Reade should have known better, they say. But I think any marketer could have easily been Duane Reade in this situation, and that this case may have long-term implications for how brands continue to use social media for marketing purposes.

Marketing Takeaways From Duane Reade's "Slip-Up"

It's easy to assume this situation is isolated. One big brand gets burned, they get sued, and life moves on. But not so fast -- there are two big questions that arise from this situation that any business should know the answer to. 

1) Duane Reade probably didn't think they were doing anything wrong. Where's the line between social promotion and celebrity endorsements?

Since Duane Reade was posting a paparazzi photo taken in public and didn't link to any of their products, they probably thought the tweet was fair game. It wasn't like it was a photo of her taken in her house, or they linked to a specific product in the tweet. All it was saying is that Heigl also shops at Duane Reade (which she does, per the photo). Still, brands aren't protected the same way media outlets are when it comes to paparazzi photos. 

And Duane Reade isn't some clueless company just posting on social media willy-nilly. They're featured in a Twitter case study, in fact. They probably assumed that because it was a photo featuring their company, it was fair game to share. So even if you're not directly promoting your products in your post, just the fact that it came from your account could land you in hot water. 

2) $6 million for two social media posts? What's an endorsement worth, anyway?

Six million dollars seems like a lot for two social media posts, particularly when studies suggest the ROI for "average Joe" testimonials is potentially higher than it is for celebrity endorsements.

According to a study by Harvard Business Review, celebrity endorsements can give brands short-term benefits, but ultimately sales decrease with time. "Average joe" testimonials, on the other hand, helped one company increase sales by over 50%. While these two stats are pulled from fairly isolated situations, they can speak to the larger takeaway: Over time, it's usually more effective to get "endorsed" through reviews, testimonials, and case studies than have a celebrity using your product. 

Regardless of whether you think Duane Reade or Heigl's in the right here, it's an interesting case study we can all learn from. In an age where brands are urged to become publishers, keep in mind that we may not always have the same legal protections as publishers. We should be absolutely vigilant about toeing the legal lines -- or we may end up throwing $6 million down the drain. 

What do you think of this whole debacle? I'd love to hear your thoughts in the comments.  

Image credit: Marketing Land

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Topics: Social Media

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