Advice for Media Businesses
For marketing consultants, advertising agencies, multimedia broadcasters, PR advisors, publishers, brand designers and many others; the media industry is exciting, fast paced and constantly evolving. With businesses craving specialist support; media agencies are carefully chosen for their creativity, imagination and their professional expertise to deliver. Yet, advising clients doesn’t always go to plan. Mistakes happen, like failing to meet regulations, IP disputes and accusations of negligence.
What Threats Should Media Agencies Look Out For?
As a specialist PI Underwriter, I see first-hand the growing threats facing media companies; particularly those that provide social media expertise on behalf of their clients. Social media works well for keeping brands ‘front of mind’, but that same accessibility can have a downside. Business owners and employees are under increased scrutiny as the public monitor their behaviour on social media.
Companies of all sizes can be impacted by even minor events that can have huge repercussions if they’re not handled correctly and quickly. An issue that occurs in one country can cascade, spreading rapidly across social media platforms, impacting the good name of a business, its share price and customer confidence.
PR agencies and broadcasters have a growing responsibility with fake news. Maintaining brand value is a 24x7 responsibility. It can be hard for businesses to understand exactly who they are talking to; where commentary is originating from and of course to correct misconceptions once they have been widely shared. It must be carefully managed.
An emerging area of social media is the use of social influencers for marketing products and events. In 2017 the Fyre Festival hit the headlines as the “luxury” music festival. According to reports, the Fyre Festival “experienced problems related to security, food, accommodation, medical services and artist relations, resulting in the festival being cancelled indefinitely”. Festival goers believed they were paying thousands of dollars for beautiful villas and gourmet meals but apparently received pre-packaged sandwiches and tents as their accommodation instead.[1]
The festival was reportedly promoted on Instagram by social media influencers. However, lawsuits were presented, as allegedly several of the famous endorsers didn’t disclose that they were profiting from the publicity, as required under FTC standards. It’s been described that the lawsuits charged Fyre Media and its influencers with negligent misrepresentation, fraud, and breach of contract. [2]
The reports surrounding the Fyre Festival bring to light that if social influencers endorse a product or event through social media, the endorsement message should be made obvious that they have a relationship (‘material connection’) with the brand to prevent claims. [3]
The value of Specialist Professional Indemnity Media & Miscellaneous Cover
Professional Indemnity cover can help to minimise the financial and reputational impact on a business. But this important cover shouldn’t be treated as ‘one size fits all’, which is why CNA Hardy’s Media and Miscellaneous Cover is tailored to meet the needs of media businesses across a diverse range of sectors.
We have a specialist team of underwriters across the UK and Continental Europe; over 20 industry specific wordings solutions; and the capability to write broker wordings at Lloyd’s.
Find out more about our specialist PI Capabilities, core appetite and covers here.
Sam Lenart
Underwriter, Professional Indemnity
[1] https://en.wikipedia.org/wiki/Fyre_Festival
[2]https://www.salon.com/2017/05/04/fyre-festival-influencers-sued-for-social-media-promotion/
[3]https://www.ftc.gov/tips-advice/business-center/guidance/disclosures-101-social-media-influencers