Friday, February 5, 2010

Social Media Engagement Product Placement Contracts

Social media rights in professional sports is going to soon become one of the biggest revenue generating streams outside of a professional player's contract. It may take several years for this prediction to pan out but I guarantee that this will occur in the near future.

There are only a handful of professional athletes who are able to obtain major endorsement deals. The traditional form of endorsement deals where an athlete such as Tiger Woods is seen utilizing or standing next to a product is going to significantly change in the near future. Since the Tiger Woods scandal, companies are now going to be extremely careful about putting all of their eggs in one basket no matter how successful an athlete is in their chosen profession. In the Social Media Age an athlete's image can drastically change with one posted youtube video. Since the corporate world is generally risk averse, many companies will soon realize that a new endorsement paradigm will need to be created.

Traditional print, television, and radio advertising is dying a slow death. Internet banner ads and the pay per click model is also in transition. The wave of the future is what I would like to call "Engagement Product Placement." Engagement Product Placement occurs when a paid endorser such as a professional athlete is hired to engage in a conversation with his or her Facebook Fans, Twitter Followers, or other social media connections about a product or service. Chad Ochocinco, a wide receiver for the Cincinnati Bengals, has more than 186,000 Facebook Fans and almost 750,000 Twitter Followers. Given Chad Ochocinco's popularity just imagine the opportunities available.

The companies who hire paid endorsers and the attorneys for paid endorsers must be fully versed in the Federal Trade Commission's new guidelines before negotiating Engagement Product Placement Contracts. Paid endorsers need to hire attorneys who understand the technology and full power of social media to account for the permutations that exist in this type of contract.

In the Social Media Age attorneys need to find creative ways to address all of the business and legal issues that accompany social media usage. To learn more about these issues you may contact me at

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