Title:
Commercializing Social Interaction: The Ethics of Stealth Marketing

Authors:
Kelly D. Martin and N. Craig Smith

Publisher:
INSEAD Business School, Research Paper No. 2008/19/ISIC

Date Published:
February 2008

In 2002, Sony Ericsson hired dozens of actors to pose as tourists in 10 U.S. cities. Without disclosing their affiliation with the company, the actors asked passersby to snap pictures using a Sony Ericsson camera phone. The campaign was a controversial example of “stealth” marketing, which the authors define as promotions that don’t disclose a marketer’s association with the sponsoring firm. This paper examines several case studies of such “covert” or “buzz” marketing and lays out ethical guidelines centering on the idea that companies should never deceive or exploit people’s generosity to deliver a marketing message. The paper also analyzes other dubious practices, such as providing unpaid representatives with free product samples, and discusses the reputational risks facing companies that cross these ethical boundaries.

Bottom Line:
Many unconventional marketing practices are not yet governed by clear rules regarding ethics. This paper advances a simple code of conduct and argues that companies that follow these guidelines will maintain the trust of their customer base and won’t risk poisoning their customer relationships.