As mentioned in the blog dated 04/29/05 entitled, “To Understand Risk is to Understand People”, we highlighted 16 activities which could hinder an organization’s ability to achieve their strategic goals and objectives. Today, we will discuss the first (1st):
Marketing, Advertising, & Sales Activities
Ultimately, this activity is a way for an organization to generate revenue and create their brand! If done well, it creates value, loyalty, and achievement to an organization’s purpose!
Prior to getting into my blog, let’s level set on what is meant when utilizing the terms marketing, advertising, & sales:
Growing up in the 80s and 90s, marketing campaigns and associated advertising and sales were creative and contained the human element without propaganda / fake scenarios which made these campaigns and particular advertisements memorable, drove brand recognition with increased sales! A couple advertising messages, via commercials, which come to mind include the “Polar Bear Christmas”, “Challenge/Rivalry”, “Clydesdales Horses”, “Where’s the Beef” – the list goes on. I purposefully left out the Companies Brand as a safe bet most of you will be able to name each of the companies/brands who owned the marketing campaigns and associated commercial advertisements.
While Marketing and Advertising campaigns are a strong tool and a must have in generating sales and increasing revenue, this activity comes with numerous risks including legal, compliance, operational, and technological risks with the overall marketing campaign approach and how one selects to advertise and sell their product and/or service.
In today’s environment, the platform which an organization selects to advertise and sell based on the established marketing campaign differs from historical practices as in many cases, they utilize third parties (e.g., influencers, artificial intelligence, etc.), which increases these risks.
Therefore, my perspective is: as one begins to research and develop a particular marketing campaign and design their advertising and sales activities, questions helping to identify where risk exists and to analyze whether these risks are mitigated include but are not limited to:
- Why is a marketing strategy needed (as the saying goes, drill down by asking yourself this question a minimum of three times to get your answer 😊)?
- What is the purpose?
- Who is involved in decision making responsibilities and approval prior to roll-out?
- Who will be performing assigned activities (e.g., third party, internal, artificial intelligence, etc.)?
- Where will it be delivered (e.g., platforms, individual, etc.)?
- Who is the intended target / customer and does it vary based on delivery selection?
- When will information be communicated and will it vary based on delivery / target selection?
- How will performance be defined (metrics) and monitored to determine success?
- How will campaign / advertising activity monitoring, oversight, and communication be performed and who will results be communicated?
- How consistent / variable (e.g., message, terms, pricing, fees, etc.) will it be across product, service, platform, target/customer, etc.?
- How often are updates and/or modifications performed to tailor marketing and advertising activities based on learned insights?
While the above questions are geared to identify risks from a Company’s traditional risk perspective, let’s discuss risk to an organization from an employee (individual/third party) and customer experience perspective based on decisions / selections made when performing marketing, advertising, and sales activities.
Employee (individual/third party)
- How does an organization validate parties retain the knowledge and skill set required to deliver and meet key marketing, advertising, and sales responsibilities and understand the risks associated with these activities?
- How is an employee (individual/third party) able to assist the customer and capture the complexities experienced to improve future performance/experience?
Given the evolving tools, services, and technology utilized by individuals / third parties / employees which circumvent traditional controls this increases risk to the organization and customer experience. For example:
- Resumes – written not based on an individual’s actual skillset or experience rather written to ‘pass’ system logic to filter for qualified candidates and/or to appear to serve the organization’s needs
- Reviews – false and/or incentivized to provide business positive reviews
- Social Presence – false and/or inflated influence network with the goal to be selected over other qualified candidates
- Training / Feedback – adaptability, resourcefulness, escalation protocols to address customer inquiries, feedback, and complaints when scripted options are not resolving the matter
Customer Experience
- How does an organization validate the functionality, delivery methods, and messaging around the products/services purchased meet their customer needs?
- How does a customer determine the authenticity of the marketing, advertising, and sales activity?
Given the preferred ways in which a customer can provide feedback and/or troubleshooting issues is becoming more crucial to allow an organization to resolve this risk prior to impacting public reputation. For example:
- Misleading / Unclear – advertising and sales activities do not provide for transparency in offers, is inconsistent based on platform, and/or utilizes legal disclosures, terms and conditions, fine print, etc. in hopes consumers blanketly accept
- Not Fit for Purpose – advertising and sales activities focus on the product, service, offer which might achieve short term needs; however, does not focus on the actual needs of the customer long term
- Outdated – advertising and sales activities contain messaging based on historical product and service information, offers, terms etc.
In summary, while the historical company perspective is required to develop your marketing, advertising, and sales strategy, factoring in employee and customer experience impact and determining the response to these questions from all perspectives during development and “go to market” approach is crucial to having long-term success in building and establishing loyalty to your brand thereby maintaining the revenue gained!
Here are some valuable insights as to companies who have experienced enforcement actions as a result of not properly assessing risks related to marketing, advertising, and sales activities:
First American Payment Systems Settlement | Federal Trade Commission
Wise US Inc. | Consumer Financial Protection Bureau
Here are valuable articles about marketing, advertising, and sales activities:
FTC Rule on Unfair or Deceptive Fees to Take Effect on May 12, 2025 | Federal Trade Commission
BOTS Act compliance: Time for a refresher? | Federal Trade Commission
Here are data visualizations graphs identifying consumer protection related topics by state, topic, and other categories where issues may arise impacting your marketing, advertising, and sales activities:
Explore Data | Federal Trade Commission
As always, EROS would love to strategize and elaborate on risks as customized to your organization’s specific strategy and activities. Please contact us today!
Cindy Hart
Founder and CEO