Today we look at the intersection of this new economic phenomenon with advertising and marketing; how will a collaborative economy change the communications that convince consumer to buy?
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Advertising and Marketing in the Collaborative Economy
Advertising and marketing are the driving forces in the collaborative economy.
Publicity may come from brands seeking to leverage this new economy, but the bulk of the commercial speech will come from the crowd. Social media and mobile marketing will spread information about available opportunities, and more players will buy into the collaborative model as they witness its power, ease of access, and savings potential.
At the same time, the collaborative economy can only flourish if consumers trust it more than they trust the traditional brand experience. Testimonials and peer confirmation will become an important part of buying in to a brand. The crowd’s advertising and marketing efforts will fuel the collaborative economy as much as, if not more than, brands’ promotion of commercial opportunity.
Reading the Fine Print
As the line between brand and consumer erodes and consumers create their own marketing opportunities, the collaborative economy faces legal challenges.
In recent years, it has become harder to detect whether speech is advertising. The collaborative economy brings an uptick of native advertising, namely advertising that blends with news and content. Brands can also be expected to experiment with experiential or gamified content and argue for broader protection under the First Amendment as noncommercial speech.
Regulators are watching, however, and continue to adapt the limits within which brands must operate. The FTC’s Endorsement and Testimonial Guidelines were last revised in 2009 and provide that advertisers must disclose “material connections” between themselves and endorsers. Fines for failing to do so can reach up to $250,000.
As brands transition into the collaborative economy, they should not seek to disguise themselves as just “one of the crowd.” Old and new technologies will be employed to disseminate a message that they are still relevant, their commercial speech will continue to be subject to regulation.
In the collaborative economy, it is more essential than ever before that brands are truthful and as transparent as possible.