SOCIAL MEDIA, PRIVACY & BEHAVIORAL ADVERTISING

1. SOCIAL MEDIA, PRIVACY & BEHAVIORAL ADVERTISING PRESENTED BY Jimmy F. Robinson, Jr. Troutman Sanders LLP Troutman Sanders Building 1001 Haxall Point Richmond, Virginia 23219 Direct Dial: 804.697.1211 Mobile: 804.306.7500 Jimmy.Robinson@troutmansanders.com Retail Mobile Executive Summit

2. INTRO

4. SOCIAL MEDIA, PRIVACY & BEHAVIORAL ADVERTISING Goals of this presentation

5. Provide an overview of social media issues related to retailers • Provide an overview of the current challenges and solutions for protecting your marketing strategies, your data, and your customer’s privacy. • Provide examples of best practices • Provoke thought and consideration

6. Accessing and exchanging business information in cyberspace fosters both unlimited possibilities and new risks and vulnerabilities for companies across the globe. • Today more than ever Companies must stay on the edge of legal and regulatory developments affecting their business and workplace risks—and opportunities— in the digital age.

7. Connecting with Your Customers through Social Media

8. Social Media To tweet, or not to tweet…?

9. Why is Social Media so Powerful? • Provides Reach • Establishes Credibility to the users • Provides Interactivity • Speed and ease of use • Type of information available

10. Current Status of Social Network Sites • 1.9 billion users on Internet (28% of the world) • 77.4% of the North American population (398 million) are Internet users • 4 billion people (58%) use mobile phones • 450 million people access web via mobile phone • Two-thirds of the world’s Internet population visit social networking or blogging sites. • More than 74% of global executives are members of social media outlets.

11. Social Networking Facts • 35% of adults have profiles on social networking sites. • Adults are a larger percentage of US population than teens

12. Are Your Customers Using Social Media to Shop? • Yes! Online retail sales have grown at a staggering rate—from $5 billion in the fourth quarter of 2009 to $30 billion in the first quarter of 2010 and 34.7 billion in the first quarter of 2011, according to the U.S. Census. And while this growth is extraordinary, it still represents a relatively small portion of all retail sales activity—only 3.5% of sales are transacted online. • However, even though retail sales are still dominated by brick and mortar stores, the influence of the Internet on offline purchasing is becoming increasingly important. Website visitation, online advertising and social media all impact offline purchasing. Visibility into online behavior has become critical across the entire retail enterprise.

13. Mainstream Phenomenon • The social media frenzy—also known as consumer-generated media (CGM)—refers to content being created 24-hours a day online on blogs, message boards, social networks like Facebook and platforms like Twitter. CGM has come a long way from the early newsgroup days and continues to grow rapidly • Traffic to Facebook is up almost 300% over the last year, and Twitter has seen an increase of almost 1500%. Social Media is no longer just for techies or younger generations—it has become a mainstream phenomenon. Compared to two years ago, not only are more people visiting these sites, but they are also spending more time there—time spent per person is up 67% over last year.

14. Why Is Social Media So Important to Retailers? So, why is social media so big? Especially for Mobile Retailers? The answer is relatively simple: it taps into a few basic human needs and emotions. Social media satisfies our need to be heard, it provides us with a platform to reach more people than ever before and it enables us to advocate for and promote the brands and topics we feel strongly about.

15. Social Media ProvidesAmplified Advocacy The purchase consideration process has always been a social endeavor. Before the advent of social media, a shopper may have consulted with a limited number of friends and family members before making a purchase. Today, shoppers’ networks have gone from being composed of just a handful of people to hundreds—or even thousands—many of which are likely strangers. • Social media has not only transformed the research and purchase consideration phase, but it also provides shoppers with a platform to advocate for the products and stores they love. Advocacy has always existed, but social media has made this stage even more critical, amplifying the size of the audience reached.

16. Best Practice Pointer:What Happens On-LineDoes Not Stay On-Line • Assume that consumer control/power will continue to grow—now is the time to listen to your customers. • While you must always nurture and protect brand credibility by being honest, open and transparent. Do not neglect your website, it is one of your best marketing vehicles, but focus majority of effort on reaching customers where they’re already congregating. • Think about how you can provide better customer service through social media and turn your loyal customers into advocates. And lastly, learn from everyone in your organization

17. Protecting Your Marketing Strategies fromSocial Media Exploitation

18. Don’t Allow Don’t allow your employees or customers to exploit your Company. It’s easier than you think! • Trade Secrets / Confidential Information 89% of the time these breaches come from within • Solicitation of customers or employees Value your customers & Employees The #1 Reason for Customer Dissatisfaction- Poor Customer Service The #1 Reason Employees Quit - Lack of Appreciation • Disparagement/ Harrassment/ Workplace Misconduct/ Retaliation/ Don’t put up with product disparagement by employees or customers Have a dedicated watchdog

19. Social Media’s Exploitation of Your Marketing Efforts • Hypothetical– An employee is connected to his boss on LinkedIn and posts the following update on LinkedIn Tweeter & Facebook & Uses the Company’s Logo: “I just turned 60 and I really feel as if my employer is only hiring and promoting younger workers because our products are geared toward the young hip group with the Androids and the other high tech pones. I feel like I am often made fun of by customers, my colleagues and my boss and treated harshly because of my age now!” One week later, the same employee is fired for performance-related issues & Appears on the Today Show with Matt Lauer to discuss the downsizing of America’s elderly by tech savvy companies

20. Your Employee – Your Marketing Dollars • Hypothetical– An employee “tweets” the following: “We just closed a big deal with Company X, and I’ll tell you one thing…..they acted in a truly unprofessional manner! Worst business experience of my career!”

21. Social Media & Marketing What are some of the questions employers are struggling to decide when considering marketing and social media?

22. Current Challenges and Solutions for Protecting Your Company’s Data

23. Drafting Effective Policies • Social media can open up office minefield • More workers are tapping into blogs, Twitter Facebook, and You Tube and gaffes can create trouble on the job

24. Companies have long faced the threat of confidential or inappropriate corporate information leaking via emails or transfers but now this threat is exponentially greater due to social media's viral nature and public access.Many believe that businesses need to be able to have real-time monitoring of employee social network communication in order to protect their brand. They need an easy way to detect if a particular employee is disclosing confidential intellectual property, financial results or information about an upcoming product release without prior permission from the employer. There’s a whole new slate of companies that offer to bring companies an easy to deploy product to avoid company damage and data loss. It’s Big Business.

25. Common Sense ApproachHonesty is the Best Policy • Let employees know from the very beginning that company property is company property with no expectation of privacy. • Encourage the use of company property so you can monitor it. • Issue company property cut down on outside equipment use • Be honest and remind employees that you have the ability to monitor select users or the entire employee base to eliminate corporate exposure related to communication.

26. IS ALL THIS NEW SOCIAL MEDIA LEVERAGING REALLY WORTH THE RISK?? • Yes!

27. Protecting Your Customer’s Privacy in the Social Media World

28. Customer Service Critical • In today's market, your brand and reputation aren't always safe from the scorn of disgruntled and social-media-savvy customers. Some of the best-known brands in the world have fallen prey to online discussions across the blog community, Twitter, Facebook, YouTube, and other social channels. • As a result, reputation management in this new era of the digital-native customer has changed the way we view customer service. • Looking ahead is critical to managing social media communications and anticipating when something may go awry. In doing so, organizations can both take meaningful action early into a crisis and arrive at a better understanding of customer needs and behavior.

29. Customer Service is Key • The key to this new approach is an unyielding commitment to interacting with the customer. Such customer service focuses more heavily on "listening" to your customers across different channels and rethinking how to use customer data to re-evaluate and alter your organizational structure (if need be) and flexibly adapt to the changes around you. • .

30. Other Privacy Issues • White House publishes cybersecurity legislative proposal • FTC says Scoot, Rascal! Rascal Scooters penalized $100,000 for calling consumers on the Do Not Call registry

31. Your Input • What are some of your suggestions to sidestep some of these privacy nightmares?

32. QUESTIONS?

33. Conclusion Don’t be an ostrich Learn and move forward Analyze and create Immunize with policies and safeguards Ounce of prevention: consult counsel