Back to Main

Legal & Policy

August 20, 2008

FTC Commish Says $77m Enough to Target Kids Online

The Wall Street Journal today has an interview with Federal Trade Commissioner Jon Leibowitz regarding the agency's investigation into marketing to kids. One question deals with digital advertising in particular, and exemplifies how marketers are integrating on multiple platforms to reach kids.

Here's what Leibowitz had to say:

One of the surprises in the [recent FTC] report was the prevalence of integrated advertising campaigns. They're sophisticated, they're multi-platform, they're cross-promotional. It's very different than what you see on, say, "Mad Men," and it's a whole virtual ecosystem, so you can see an ad on TV, you buy the product, you go on the Internet, you enter a code, you collect points, you win a prize, the prize is a T-shirt, the T-shirt advertises the product. So we are seeing a fair amount of cross-promotional marketing. We only found $77 million in Internet advertising, but our guess it that it's very efficient advertising, because it's targeted.

Posted by Kate Kaye at 11:58 AM | Permalink | Comments (0) | TrackBack

August 17, 2008

Facebook, Others Sued Over Ad Targeting Program

Facebook and at least seven advertisers are being sued for an unpopular ad targeting program. Advertisers named in the federal lawsuit include Blockbuster, Fandango, and Zappos.

The ad targeting initiative, known as Beacon, was rolled out in November 2007, but overhauled a month later after privacy and consumer advocates cried foul. Facebook subsequently gave people more control over what online activities are visible to friends.

A copy of the lawsuit, published by wired.com, can be found here.

Posted by Anna Maria Virzi at 1:05 AM | Permalink | Comments (0) | TrackBack

August 11, 2008

Google Responds to House Inquiry

Google is "deeply committed" to privacy and security of its users, but not to deep-packet inspection.

Read its responses to a recent House Subcommittee inquiry and you'll soon realize the company didn't exactly find them all pertinent to its business. While the questions asked by the House Energy and Commerce Telecommunications and the Internet Subcommittee deal with online ad practices and consumer data privacy, the main focus is "deep-packet inspection." That's the technology employed by firms including like NebuAd to target ads to customers of particular ISPs. Legislators have grown increasingly skeptical of the practice, leading trials to be stalled or halted all together.

Many answers to questions featured in Google's letter to Subcommittee Members went like this: "We understand this question to be focused primarily on the implementation of deep-packet inspection advertising practices by a small number of U.S. ISPs in partnership with a privately-held online advertising company. Google does not deliver advertising based on deep-packet inspection."

The "privately-held online advertising company" is NebuAd. In the UK, Phorm has forged relationships with ISPs like British Telecom (which, by the way, has stalled its trial of the ad targeting technology for longer than originally anticipated).

The bulk of the firms that received the inquiry letter are ISPs. At this point, though, it's unclear whether they've all responded to the questions by the deadline, this past Friday. Yahoo also responded publicly.

One question regarding use of data gathered through one platform or service to target ads to another did result in an interesting response from Google:

Google does not correlate data regarding use across our products to offer advertising. For example, when we serve a contextual ad to a user of Gmail, our email service, that ad is based only on the text of the page that a user is viewing, and it is not based on any information from any other product such as Google Calendar or Google Search. If we were to correlate data regarding use across our products to offer advertising, we know that we would have to do so in a way that protects the privacy and security of our users, an endeavor to which we are deeply committed.

Posted by Kate Kaye at 11:58 AM | Permalink | Comments (1) | TrackBack

August 8, 2008

Yahoo Responds to House Inquiry, Allows Behavioral Opt-Out

In response to last week's request by the House Energy and Commerce Telecommunications and the Internet Subcommittee, Yahoo has announced opt-out capability for behavioral targeting. In a letter to Subcommittee Members, the company said it "will offer consumers even greater choice by allowing consumers to decline customized advertising(8) on Yahoo.com. This is in addition to our existing opt-out when Yahoo! serves customized advertising on third party networks."

That (8) leads the reader to a footnote explaining that Yahoo's internal term for behavioral targeting is "customized advertising."

The legislators sent letters to over 30 firms, mostly ISPs, inquiring about their online advertising practices, data privacy policies, etc., a week ago. Today's the deadline for them to respond.

Posted by Kate Kaye at 1:49 PM | Permalink | Comments (0) | TrackBack

Florida AG Spoils Fun for FunMobile

The Florida AG strikes again. This time Sunshine State Attorney General Bill McCollum has darkened the day for MobileFunster, a company that does business as FunMobile and sells mobile content like ringtones and wallpapers.

After penalizing ad networks like Azoogle and telecom AT&T Mobility for their alleged roles in enabling deceptive ads for "free" mobile content and other items, the AG's CyberFraud Task Force has gone after its first mobile content provider.

The Hong Kong-based FunMobile has agreed to cough up $1 million, and like other companies the diligent AG's office has settled with, the firm will "lead mobile content providers in setting new marketing standards that will benefit Florida consumers and cell phone users nationwide," according to the office's press release.

Full settlement in PDF form here.

Posted by Kate Kaye at 12:28 PM | Permalink | Comments (0) | TrackBack

August 5, 2008

Valueclick Joins Gang-up on Tacoda

Valueclick has filed suit against AOL's behavioral targeting firm Tacoda, claiming patent infringement. As Congress and the Federal Trade Commission sharpen their focus on the sector, the continued flow of lawsuits over behavioral ad targeting technologies indicates the potential for success outweighs any government threats.

According to Federal District Court filings, Valueclick filed a patent infringement suit against Tacoda in California District Court on July 15. Not much seems to have occurred yet besides judge reassignments. Valueclick beefed up its behavioral capabilities last month.

Whether Valueclick has a chance with this one is anyone's guess. The company settled a patent infringement case against behavioral targeting firm Revenue Science in February. The docket notes on that case state, "ValueClick and Revenue Science shall each bear their own costs, expenses and fees. IT IS SO ORDERED."

After AOL bought Tacoda, it became subject to a patent suit – almost exactly a year ago -- from a little known firm that seemed to be pushing its way into the behavioral space with little history in it before that. That suit, filed in New York by Modavox, an online broadcasting media production firm-turned-software provider, appears to be ongoing without much movement.

Of course, neither AOL/Tacoda nor Revenue Science would comment. No one is available from Valueclick to speak at this point, either.

Posted by Kate Kaye at 2:13 PM | Permalink | Comments (1) | TrackBack

July 29, 2008

CA Lawmaker Wants Google/Yahoo Deal Investigated

California Assemblyman Joel Anderson wants the state's Attorney General to inspect the Google/Yahoo search ad deal. It's already stalled by the U.S. Department of Justice. According to a CNET report, the San Diego Republican wrote the following to the AG: "I am writing to urge you to direct your office to take quick and decisive action by launching a formal investigation into the proposed business transaction between Google and Yahoo's search-advertising business."

Like other critics, he's worried about search data privacy as the companies combine forces for some advertising. He's also worried about competition, which is the DOJ's main concern.

Yahoo denied the notion that it will merge data with Google.

Posted by Kate Kaye at 5:10 PM | Permalink | Comments (0) | TrackBack

July 25, 2008

Quote of the Day: Eric Goldman on NebuAd and Phorm

"The battles over the legality of Phorm and NebuAd are a smokescreen for the real issue, which is that marketers who have only server-level data don't want to compete against someone who has a better dataset than them. So expect plenty of continued fireworks over Phorm and NebuAd, but don't kid yourself that it's only the privacy advocates beating up on them."

-Eric Goldman, expert on Internet law and professor at Santa Clara University, commenting on the legality of behavioral tracking and ad serving platforms that tie into ISP networks.

Posted by Zachary Rodgers at 10:46 AM | Permalink | Comments (0) | TrackBack

July 18, 2008

FTC Makes Antitrust Education Easy

Ever wonder how the Federal Trade Commission arrives at its decisions regarding whether to approve acquisitions such as Google's earth-shattering DoubleClick buy? No worries: The commish has put together a resource with 25 fact sheets on stuff like antitrust and price discrimination. With some huge Yahoo deal still looming, this could come in handy.

Posted by Kate Kaye at 4:48 PM | Permalink | Comments (0) | TrackBack

July 17, 2008

A Moment of IAB Appreciation

On this, a heat-index alert day, IAB head Randall Rothenberg's blog (or "clog," as he insists on calling it), is a breath of fresh air.

Today's entry, once you get past the "join the IAB" call-to-action, elegantly and articulately enumerates the scary regulatory and legislative threats (both on the state and Federal levels) facing online publishers.

Consumers and legislators don't understand what online advertising is, or how it works. Too many Internet publishers and advertisers, meanwhile, are tuning a blind eye to the implications of their ignorance, namely, bad laws that can carry significant negative economic consequences to those making a living off interactive publishing and advertising.

Rothenberg deserves a shout-out. Under his leadership, the IAB is meeting all sorts of challenges the organization too long ignored. Bringing smaller companies into the fold is just one of these. The much bigger picture is aggressively addressing threats to the industry on the legislative level. It's a far cry from the days when the body stood idly by while other measure, such as CAN-SPAM, wended its way through the FTC and ultimately, Congress.

Take a moment today to read Randall's most recent post. The goings-on in Washington may appear distant today, but the impact on your business is going to matter tomorrow.

Posted by Rebecca Lieb at 12:12 PM | Permalink | Comments (0) | TrackBack

July 15, 2008

Viacom-YouTube Reach Privacy Deal over User Info

Google's YouTube won't be required, after all, to hand over user IDs to Viacom.

The measure is part of an agreement reached yesterday in U.S. District Court in New York City in connection with a Viacom copyright infringement lawsuit against YouTube. In that lawsuit, Viacom claims Google failed to stop the distribution of Viacom content on YouTube.

Earlier this month, a federal judge ordered Google to hand over to Viacom the following information: YouTube user IDs, visitor IDs, and the IP address, which is used to connect computers over the Internet. Under the new agreement, Google will be able to substitute the IDs and IP addresses for "unique values." As a result, the privacy of users should be better protected, while Viacom should still be able to establish what videos were watched.

"We are pleased to report that Viacom, MTV and other litigants have backed off their original demand for all users' viewing histories," the "YouTube Team" wrote on YouTube's blog.

Most visitors posting entries on the YouTube blog applauded the development. "thanks, Youtube. It's good to know that at least one organization is committed to our privacy," wrote arcadianraider.

Others asked when Google would reduce the amount of information it obtains from users. "Great! So when are you going to let us OPT OUT of information collection?" asked thestranger.

Posted by Anna Maria Virzi at 10:34 AM | Permalink | Comments (2) | TrackBack

July 14, 2008

States Join DOJ in Google/Yahoo Probe

Connecticut and Florida are among "about a dozen states" reviewing the recent Google/Yahoo search ad deal, according to a recent Washington Post story.

They're concerned that the partnership is anti-competitive.

"If their agreement is a substantial one in its impact on services or costs, it could have a huge impact on competition. It could be hugely anti-competitive," Connecticut Attorney General Richard Blumenthal told the paper. Florida's AG Office said the state is working with other AG offices in its review.

The Department of Justice has already begun its investigation of the deal

State governments would have a vested interest if companies based in their states could be affected by Google and Yahoo working together on search advertising.

Microsoft is against Yahoo and Google partnering for a number of reasons: It bolsters their share of the search market and strengthens Yahoo in Microsoft's fight for the firm. Although it's not clear that Microsoft is out there lobbying state governments to poke their noses in the Google/Yahoo deal, it wouldn't be surprising if the company has prodded states to look into it.

Posted by Kate Kaye at 12:24 PM | Permalink | Comments (0) | TrackBack

July 9, 2008

No ISPs at Senate Hearing Today Despite Invites

NebuAd is there. Google's there. Microsoft showed up, as did the privacy advocates. The Federal Trade Commission came, too. But the ISPs are nowhere to be found at this morning's Senate Committee on Commerce, Science and Transportation hearing on the Privacy Implications of Online Advertising. Democratic Senator Byron Dorgan of North Dakota isn't happy about it either. In his opening remarks, he lamented, "I had invited Internet Service Providers today, and they had declined the invitation."

Tsk, tsk. The Senator isn't giving up, though. He told attendees he will hold another hearing for ISPs alone because he thinks the committee needs to hear from them, when it comes to recent behavioral targeting trials with firms like NebuAd.

Posted by Kate Kaye at 10:29 AM | Permalink | Comments (0) | TrackBack

July 3, 2008

Google, Microsoft and Yahoo Collaborate for IAB U.K. Search Help Site

The Interactive Advertising Bureau U.K. has launched its dedicated Search Help Centre, offering advice to marketers on best practices, policy and legal regulation regarding search marketing.

Content for the site is supplied by Google, Microsoft and Yahoo, alongside a panel of agencies and advertisers from the IAB U.K.'s Search Council.

The free resource is intended to provide regularly updated information on issues surrounding trademarks, copyright, invalid clicks, click fraud, user privacy, and intellectual property. It will also include help and advice for advertisers on how to go about hiring a search agency.

Intellectual property will form a key focus for the center. An IAB U.K. release issued today read, "Protecting intellectual property is a growing area of concern because it has become extremely valuable, therefore marketers need to understand what campaign property they own and how to protect it.”

Jack Wallington, chair of the IAB Search Council told me, “For advertisers this is important because they may not be aware of the increasing value of [intellectual property] in search marketing and how to handle and protect it. For agencies it will become a larger issue because they need to decide exactly what they are willing to share with each other and their clients – what is and isn’t competitive information for instance.”

He added that the IAB now recommends making intellectual property a key consideration when starting a relationship with an agency.

The Help Centre resource goes live today.

Posted by Jack Marshall at 12:12 PM | Permalink | Comments (0) | TrackBack

June 19, 2008

Did Your Phone Help Elect Bush/Cheney?

With approval ratings for the current administration at all time record lows, Credo Mobile came up with this near-irresistible e-mail subject line.

The body copy and call-to-action are no less compelling:

Sorry to say, but the political action committee at AT&T contributed the maximum amount allowable by law to the Bush/Cheney campaign — twice. So, go ahead, check out your mobile phone company. And then check out the mobile phone alternative you can trust. It's called CREDO Mobile, and it's mobile phone service that stands up for your values, brought to you by Working Assets.

On the other hand, if you're happy with your mobile service just the way it is, accept this photograph as your gift from a real, ahem, Richard.

To get your phone in line with your values, click here.

Just a hunch, but this is going to get Credo onto consumers' radar - fast. Particularly the ones whose major gripe with the telco until now has been its indefensible anti Net neutrality stance.

Posted by Rebecca Lieb at 3:07 PM | Permalink | Comments (2) | TrackBack

June 11, 2008

FTC Wants Civil Penalties in its Anti-Spyware Arsenal

Look out spyware perps. Today Federal Trade Commission Bureau of Consumer Protection Deputy Director Eileen Harrington told members of the Senate's Committee on Commerce, Science, and Transportation that stronger penalties for perpetrators of spyware might be a good idea. “Legislation authorizing the Commission to seek civil penalties in spyware cases could add a potent remedy to those otherwise available to the Commission,” said Harrington, according to an FTC statement.

The FTC's current enforcement involves "consumer redress or making the operators give up their ill-gotten gains." But that may not be enough to deter bad actors. Harrington said the commission supports legislation that would provide the FTC the ability to slap spyware disseminators with civil penalties.

Posted by Kate Kaye at 5:11 PM | Permalink | Comments (0) | TrackBack

June 4, 2008

Mobile Scam Suit against Google Akin to Investigations of Vendors and Carriers

Google is being sued for what seems to be the same thing companies like AzoogleAds (now Epic) and World Avenue were investigated for by Florida's Attorney General's Office. Those ad firms agreed to pay $1 million each for allegedly duping consumers into signing up for supposedly "free" mobile content services and other gifts that actually cost them.

Those firms served the lead-gen driven ads or bought ads on sites like Google promoting the offers. The AG's Office also got AT&T to agree to pay $2.5 million for aiding what they considered free mobile content scams. As a carrier, AT&T billed customers for such "free" services.

There's a chance other carriers, ad firms and even publishers like Google are on the Florida AG's investigation list.

Now, as reported by Tech Marketing law blogger Eric Goldman, a class action suit has been filed against Google for helping these allegedly fraudulent mobile offers to perpetuate. Goldman doesn't like it. He calls it a "misdirected lawsuit," and believes Google shouldn't be sued just for running the ads.

"The plaintiffs in this putative class action lawsuit feel like they got fleeced by providers of these subscription services," writes Goldman. "If they did, I hope they get appropriate redress from the wrongdoing vendors. But instead of suing the allegedly fraudulent vendors, the plaintiffs think Google should cover the losses for the sole reason that Google ran ads for the services….. An analogy might be that dead-trees newspapers should stand behind any losses suffered by readers who transact with newspaper advertisers. Sounds ridiculous? It does to me, whether the publisher is online or off," he continues.

Posted by Kate Kaye at 12:00 PM | Permalink | Comments (2) | TrackBack

May 30, 2008

Musicians Back 'Net Neutrality

If there's one album you don't want to grab off of a P2P server, this would be it.

Rock the Net, the nationwide coalition of musicians and labels that support net neutrality (841 bands, 177 labels and counting), are releasing an album to benefit their very worthy cause on July 29.

Wilco, Bright Eyes, DJ Spooky, They Might Be Giants, Aimee Mann and more have dontated tracks to the compilation, which will be released by indie Thirsty Ear Recordings.

Kind of ironic that musicians, who have seen their industry gutted by the Web, would band together to support this critical cause. It would be nice to see interactive marketers and advertisers, whose bread and butter depend on a freely accessible Internet, make their own brand of noise about the issue.

Posted by Rebecca Lieb at 4:14 PM | Permalink | Comments (0) | TrackBack

May 16, 2008

State Governments Not Letting Up on Online Ad Players

State governments are becoming thorns in the side of the digital ad industry, and Texas is the latest state to wrangle an online ad player. Indeed, Texas is the reason World Ave is Out $800K. The lead gen services firm World Avenue will cough up the cash to the state as part of a deal to settle the case against it. According to the Texas Attorney General's Office, the state took legal action because the firm didn’t disclose that users would need to weed through a chain of sponsor offers (and register for them) before getting through to a promised iPod or other so-called "free" gift.

World Ave. works with clients including Blockbuster, Netflix, credit card companies, and others, offering products in exchange for customer data.

"World Avenue USA has agreed to develop and implement standards and best practices to ensure that proper disclosures are included in the future," according to the AG's press release. The company also has to abide by rules about using the word "free" that are becoming commonplace in such settlements. For instance, "when a purchase is actually required, that disclosure must be in close proximity to the word 'free' so that customers are adequately informed about costs associated with acquiring the 'free' item."

Like Florida's AG Office, which settled with World Ave in January (they agreed to pay $1 million), Texas seems active in investigating online ad companies. Back in November 2007, the Federal Trade Commission held a forum on behavioral targeting that featured a panel with Brad Schuelke, chief, Internet Enforcement Unit Office of the Texas Attorney General. He indicated state governments would be involved in inspecting that sector.

"I think in general right now the states are looking at a couple of things," he said. Yeah, it's vague, but the guy was on a panel at an FTC conference (I believe a representative of NY's AG Office was also present). That's indication in itself.

It's unclear whether Texas is investigating other firms for alleged fraudulent online ad practices. An AG Office spokesperson told me they don't reveal that information. "I will have to tell you that this office does not acknowledge investigations of any kind, but we welcome complaints from consumers at any time, particularly if they believe they are being defrauded or misled, as was the case with the World Avenue USA matter," he wrote in a later e-mail.

We know Florida is going after the big fish – companies that enable payments for alleged fraudulent mobile content offers. In February, AT&T Mobility agreed to pay $2.5 million to the AG's office in addition to refunding customer payments for ringtones and other cellphone content advertised as free.

It's my understanding that Attorney General's Offices often collaborate. When I spoke with Office of Florida Attorney General Bill McCollum in February, he told me state operations do talk from time to time because they're dealing with the same problems.

"There's communication," he continued, "but in reality, they have their own cases and we have our own efforts."

State approaches vary as much as the practices of the online ad industry firms they seek to regulate. Still, it's interesting to note Internet ad firms also work together to stave off unwanted government intervention. For instance, just last month, a once-loose collective of companies including Google, Yahoo, AOL and eBay finally incorporated officially after four years of collaborating to influence state policy.

Posted by Kate Kaye at 11:24 AM | Permalink | Comments (0) | TrackBack

May 13, 2008

FTC Clarifies Single Sender CAN-SPAM Rule

The Federal Trade Commission amended four CAN-SPAM Act provisions. The new rules stipulate that companies don't charge users to opt-out of receiving e-mails. They also alter the definition of the term "person," according to the FTC press release, "to clarify that CAN-SPAM’s obligations are not limited to natural persons."

The term "sender" was also redefined in an effort to clarify who's responsible for enabling opt-outs when multiple parties advertise in a single e-mail. According to the Act's full document:

The final Rule provides that multiple 'senders' of a commercial email, under certain conditions, may identify one among them as the 'sender' who will be deemed the sole 'sender' of the message (the 'designated sender'). Thus, under the final Rule, the designated sender, but not the other marketers using the same email message, must honor opt-out requests made by recipients of the message. Moreover, under the final Rule, the physical address of the designated sender, but not the addresses of the other marketers using the same email message, must appear in the message.

Apparently, the FTC received nearly 60 comments regarding this proposal.

Posted by Kate Kaye at 4:33 PM | Permalink | Comments (0) | TrackBack

May 12, 2008

U.K. Facebook Creatives Branded 'Illegal'

A range of ads promoting credit and loan facilities on Facebook are in fact illegal, according to U.K. debt charity Credit Action.

The charity has said that a number of companies advertising on the social networking site are not providing information on their products that is required to satisfy U.K. advertising laws set out by the Office of Fair Trading (OFT).

An article on the credit action website reads, "If you've been on Facebook recently, you can't miss the adverts for 'payday loans' and credit cards. What you may not have realised is that many of these ads are breaking the law!"

The offending ads fail to state the annual percentage rate of interest (APR) of the loans being advertised. According to Credit Action, this information must be clearly displayed if the ad offers an incentive or interest-free period, makes comparisons with other lenders' products, or provides services tailored for those with poor credit histories.

Malcolm Hurlston, the charity's chief executive, said that some of the companies are U.S.-based lenders who may not be aware of U.K. advertising rules, but that others are from big-name firms who have been active in this country for some time.

"We must be sure that such creative products concur with existing rules and regulations and offer customers the full protection of the law," he told the U.K.'s Guardian newspaper.

Credit Action has written to the OFT complaining about the ads, but says that users should also report them to Facebook.

Offending companies include Payday U.K., Payday Advance U.K. and My Payday Online.

Posted by Jack Marshall at 11:23 AM | Permalink | Comments (0) | TrackBack

April 11, 2008

Net Neutrality: Sign the Petition Before Next Week's Hearings

The FCC is holding a public hearing on Net Neutrality in Palo Alto next week.

In case you haven't gotten the message, this issue has the potential to affect every single person in the United States who uses, or benefits from, the Internet. It's also an issue interactive marketers simply cannot afford to ignore.

Telcos and cable companies including AT&T, Verizon, Comcast, and Time Warner are working to pave the way for "network management" practices that would allow blocking of certain content in favor of those Web sites and services the access providers prefer.

Don't let this happen. Support Net Neutrality. A good place to start might be signing this petition in support of the Markey-Pickering bill, which would mandate the FCC to "guard against unreasonable discriminatory favoritism for, or degradation of, content by network operators based upon its source, ownership, or destination on the Internet."

Thanks.

Posted by Rebecca Lieb at 3:23 PM | Permalink | Comments (1) | TrackBack

April 9, 2008

Georgia Court Lesson: Check Metatags with Lawyers

Marketing tech law blogger extraordinaire Eric Goldman has a thorough post on an 11th Circuit Court decision on the use of trademarks in metatags, as they affect search results. The case involved two medical device firms. One, Axiom, employed trademarked terms of its competitor, North American Medical Corp. in its metatags. The court ruled this is trademark infringement.

According to Goldman, the decision "distinguishes (and denigrates)" the 2nd Circuit's 1-800 Contacts/WhenU ruling because it involves metatags rather than URLs and since Axiom apparently caused its competitors' TMs to show up in its search result copy linking to its site.
The court also said use of another firm's trademarks in metatags causes consumer confusion. It argued people would be misled to think Axiom's products came from the same source as those of the actual owner of the trademarked brands in question, or that there was some relation between the two companies.

Goldman calls the decision "bizarre and frustrating," but notes two lessons to be learned from it. First, he recommends having metatag data reviewed by the lawyers "just like any other ad copy."

He also writes, "if you are going to use keyword metatags, you must ensure that competitive trademarks do not appear in your keyword metatags, period. It's just not worth it. They don't buy you much juice with the search engines anyway, and it will leave you exposed to irrational judicial freakouts about keyword metatags if ever tested in court."

Posted by Kate Kaye at 11:44 AM | Permalink | Comments (0) | TrackBack

March 17, 2008

ValueClick Experiences Long Arm of Murphy's Law

Rather than attracting the luck of the Irish on this St. Patty's Day, it looks like ValueClick has fallen prey to Murphy's Law. The firm already garnered unwelcome headlines when it announced its settlement with the Federal Trade Commission a month ago, an agreement to cough up $2.9 million for allegedly violating the CAN-SPAM and FTC Acts.

But it looks like they've grabbed more ink this time around, as the FTC has put out its own official announcement regarding the settlement today.

The FTC has provided more detail on what ValueClick was charged with, and what the firm has agreed to. "According to the FTC's press release, "ValueClick subsidiary Hi-Speed Media used deceptive e-mails, banner ads, and pop-ups to drive consumers to its Web sites." Like other recent settlements with the FTC and the Florida Attorney General's Office, the offers promoted free items like plasma TVs that ended up costing consumers who "were led through a maze of expensive and burdensome third-party offers – including car loans and satellite television subscriptions – which they were required to 'participate in' at their own expense, in order to receive the promised 'free' merchandise."

Perhaps more damaging, the commission alleged Hi-Speed Media and ValueClick subsidiary E-Babylon "failed to secure consumers’ sensitive financial information, despite their claims to do so."

The company now must disclose the true costs of "free" offers and can no longer make false claims about security of consumer data collected on e-commerce sites.

ValueClick originally announced the settlement February 13 in conjunction with its Q4 2007 earnings report. The firm recorded the $2.9 million charge related to the settlement in that quarter.

According to the FTC, it's the heftiest settlement based on the CAN-SPAM legislation. The agency voted 5-0 to approve the final order.

Posted by Kate Kaye at 5:02 PM | Permalink | Comments (0) | TrackBack

March 14, 2008

Net Neutraility - The Saga Continues

Recently, I upgraded my Verizon DSL service at home. A rep called last night with a bunch of customer experience questions, all of which I responded to with a "satisfactory" or "very good." Except one. The rep was stunned when he asked how likely I was to recommend Verizon to a friend on a scale of one to 10.

"Zero" was my emphatic reply.

He was kind of stunned and asked why. "Verizon's position on net neutrality," was my immediate response.

I'm still looking (in vain) for a viable (read under $300 per month) home broadband option. Despite being a confirmed Apple fanatic, I refuse to get an iPhone. After all, AT&T started the whole anti-net neutrality movement. And I'm still looking for new ways anyone who wants, needs, uses, or makes a living from the Web can voice their support for a free and open Internet.

I'm introducing a panel at Search Engine Strategies on Monday entitled "Network Neutrality is for On-Line Marketers, Too!" If you're attending SES, don't miss it. This issue is just too important.

Posted by Rebecca Lieb at 1:53 PM | Permalink | Comments (0) | TrackBack

February 29, 2008

Azoogle Wants Truste to Certify Mobile Promotions

If AzoogleAds actually engaged in fraudulent online ad practices, as the Florida Attorney General’s office has alleged, the company appears to be turning over a new leaf. In fact, AzoogleAds President Don Mathis seems quite engaged in trying to clean up the mobile content promotions sector.

In fact, he wants to work with Truste to develop a program for officially approving promotions for mobile content.

"We approached Truste to [develop] a real certification program,” Mathis told me earlier today when discussing the Florida AG's big AT&T score. Check out ClickZ's coverage. The carrier agreed to pay a total of $3 million and ensure partners that charge consumers via AT&T bills abide by new disclosure guidelines in their online ads.

He also said AzoogleAds has been in talks with the Mobile Marketing Association and carriers to establish best practices for ads and promotions pushing ringtones, wallpapers and other mobile content.

"The goal is ultimately to establish a code of conduct for the industry," he said, adding that in this case it would "have the teeth of the Attorney General behind it.”

The fact is some of these mobile content promotions are used for lead generation purposes. The IAB's Lead Generation Committee already calls for lead gen companies to follow the Federal Trade Commission's guidelines; those require that companies provide clear and conspicuous disclosure of terms and conditions associated with ads touting "free" promotions.

Mathis believes at least half of the mobile content promotions sector in terms of companies and dollars is connected to bad players using misleading ads to dupe consumers into signing up for things like "free" ringtones that end up costing. "I would say it’s north of 50 percent,” he said.

Rather than simply penalize companies and walk away, the Florida AG's approach seems like it could actually help clean up the mobile content marketing space. As part of its agreements with Azoogle, World Avenue and now AT&T, it's required that the companies assist in further investigations. It makes a lotta sense. Not only that, its decision to go after the carriers, the ones that actually facilitate the billing of these fraudulent charges, is intended to cut off the scam artists from their revenue source. Who knows? Maybe it will actually work.

Of course, new fly-by-night operations crop up all the time, making the deceptive stuff hard to keep track of. Still, if the pressure stays on the carriers, it will only behoove them to prevent fraud perpetrators from using their systems for billing.

So, who's next after the carriers? Look out ad networks, publishers and yes, the likes of Google, Yahoo and MSN – the guys serving the bad ads. Mathis told me there's "no question" Florida's Cyberfraud Task Force will consider investigating ad networks.

Posted by Kate Kaye at 5:03 PM | Permalink | Comments (0) | TrackBack

February 28, 2008

Background on FTC Chair Majoras and Google/DoubleClick

Federal Trade Commission Chairman Deborah Platt Majoras is set to resign next month, and now that she’s leaving, privacy advocates unhappy with the FTC’s approval of Google’s DoubleClick acquisition want the commission to cough up the Majoras papers, pronto. Center for Digital Democracy’s Jeff Chester is reminding the press of his group’s request that the FTC hand over all documents related to Majoras’ role in the acquisition case (through the Freedom of Information Act). Basically, the law firm where her husband works, Jones Day, has been involved in representing DoubleClick, which on its face, makes her involvement with the FTC decision on the merger seem ethically challenged.

It’s easy to speculate with stuff like this, so I figured I’d reiterate what I reported for ClickZ News in December when this blew up the first time around. Back then, the FTC told me “Jones Day has not appeared before the FTC on this matter."

More from that story:

DoubleClick affirmed the FTC's claim. A company spokesperson said in a written statement sent to ClickZ, "Jones Day was not engaged to represent, and has not represented DoubleClick before the Federal Trade Commission or appeared before the Commission on DoubleClick's behalf." Indeed, law firm Simpson Thacher & Bartlett is representing DoubleClick "in all aspects of its proposed acquisition by Google, including with respect to United States antitrust matters," the DoubleClick statement said.

Simpson Thacher & Bartlett's Web site confirms it has represented the ad management firm and its majority shareholder Hellman & Friedman in conjunction with the Google deal, and also represented Hellman & Friedman in its acquisition of DoubleClick in 2005. Simpson Thacher & Bartlett is also handling the case in Europe.

Posted by Kate Kaye at 2:43 PM | Permalink | Comments (0) | TrackBack

February 8, 2008

FTC Says New IAB Lead Gen Standards Not Exactly Groundbreaking

Just when you thought the IAB's Lead Gen Committee and the Online Lead Generation Association were getting a tad more friendly, OLGA has taken a swipe. The group has expressed its disappointment with the committee's new lead gen best practices for publishers, claiming in a statement "the IAB has not gone far enough." OLGA wants the IAB "to call for an end to the sharing of Personally Identifiable Information data by publishers with third-party marketing partners."

In that statement, OLGA said sites sharing Personally Identifiable Information with third party marketers should not only disclose they're doing so, but the disclosure should actually list the names of all the partners that could potentially receive the data. It's a sticking point for the IAB. As IAB Lead Generation Committee Chair Gayle Guzzardo told me earlier this week, the group decided against listing all partner names at the point of registration because it could cause competitive disadvantages for publishers with relationships they may not want their competitors to be aware of.

I asked her whether publishers were worried about a long list of sometimes unrecognizable company names deterring consumers from registering for promotions. She insisted that wasn't a factor.

OLGA was among the groups that assessed the guidelines before they were made public, which led me to believe maybe the two groups were burying the hatchet. But OLGA was pretty blunt about its disapproval of the IAB's guidelines. Thing is, OLGA doesn't have any official best practices at all, nor does it suggest in the standards and guidelines on its Web site that publishers should list all partners on registration pages. I was hoping to speak with OLGA about this today but got no response to requests to speak with OLGA Board Chairman Dan Felter.

Also, I'd love to know which publishers currently list all third-party marketing partners on their sites, much less on their lead gen reg pages. It doesn't seem like something they'd want to broadcast. And who's to know whether, if this actually became a standard practice, publishers would conveniently leave some names off the list?

The Federal Trade Commission's Division of Marketing Practices Associate Director Lois Greisman didn't think the guidelines were especially innovative. "The guidelines in terms of advertising disclosure do not cover new ground," she told me this afternoon. "These are things the agency has been looking at for several years…those are the basic rules of the road for Internet advertising."

Posted by Kate Kaye at 5:34 PM | Permalink | Comments (1) | TrackBack

February 7, 2008

Web Analytics and Your Tax Dollars

You'd think cash-strapped government agencies that operate Web sites would jump at the availability of free and very robust tools such as Google Analytics.

Think again.

Earlier this week, I was on a fascinating call with the people who run many of the major federal government Web sites. The group included one woman who does the same for a state agency. We mostly talked metrics, and what measurements to consider when gauging the performance of sites that are non-commercial in nature -- like theirs.

Given the budgetary constraints these sites operate under, we spent a good deal of time discussing free (and very low cost), Web-based measurement tools, such as Alexa.com, Compete.com, and Quantcast. And, of course, Google Analytics.

That's when the woman from the state agency spoke up. Because her site represents a state government, and because hers is not the state of California, she cannot use Google Analytics on the site she operates. Why? Google's TOS, which specify "This Agreement shall be governed by and construed under the laws of the state of California..."

That's why at least one state agency is paying for (an admittedly more robust) commercial analytics package.

OK, so it's not $3.1 trillion in defense spending. But still.

Posted by Rebecca Lieb at 2:01 PM | Permalink | Comments (0) | TrackBack

February 4, 2008

FTC Settles with Another Freebie Advertiser

After settling with EDP Technologies Corporation and its cohorts for $2.2 million over alleged deceptive marketing targeting "subprime consumers," the Federal Trade Commission last week settled with another firm engaging in bad lead gen practices. This time, it was Member Source Media agreeing to pay a much smaller sum of $200,000.

The company used "deceptive spam and online advertising to lure consumers to its Web sites," according to the FTC statement. Like a lot of misleading lead gen-driven ads and e-mails, they attracted consumers with promises of free iPods, laptops or gift cards. Turns out they weren't exactly free.

Like similar settlements by the FTC and authorities such as the Florida Attorney General's Office, the firm must disclose the true cost of the so-called "free" offers, and can no longer violate the CAN-SPAM Act.

The FTC and Florida AG's Office have focused on firms promoting "free" stuff. This approach appears to be working as a means of roping third-party companies using unseemly advertising techniques. The majority of the firms that have been caught in the regulatory net offer lead generation services, and collect contact info, mobile phone info, etc. on people showing an interest in free items.

We can probably expect more such settlements this year. Industry watchers believe the FTC is targeting the lead gen ad industry. Plus, we're still waiting for an announcement on Valueclick, which has admitted it is under inspection by the FTC.

Posted by Kate Kaye at 2:10 PM | Permalink | Comments (0) | TrackBack

February 3, 2008

Google Weighs In On Microhoo: It May Be Evil

David Drummond, Google SVP corporate development and chief legal officer, issued the company's official response to Microsoft's proposed acquisition of Yahoo this afternoon. Essentially, Google's position is combining its two main competitors could be bad for the Internet...even border on evil.

Drummond says in the official Google statement:

"It's about preserving the underlying principles of the Internet: openness and innovation.

"Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets.

"Could the acquisition of Yahoo! allow Microsoft -- despite its legacy of serious legal and regulatory offenses -- to extend unfair practices from browsers and operating systems to the Internet? In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet. Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors' email, IM, and web-based services? Policymakers around the world need to ask these questions -- and consumers deserve satisfying answers.

"This hostile bid was announced on Friday so there is plenty of time for these questions to be thoroughly addressed. We take Internet openness, choice and innovation seriously. They are the core of our culture. We believe that the interests of Internet users come first -- and should come first -- as the merits of this proposed acquisition are examined and alternatives explored."

Posted by Rebecca Lieb at 5:25 PM | Permalink | Comments (0) | TrackBack

January 31, 2008

What Would Jeane Dixon Think About Google/DoubleClick in the EU?

The research arm of Missouri-based brokerage and investment banking firm Stifel Financial Corp. has reported that "the staff of DG Competition, the European Commission agency responsible for merger reviews, has prepared its draft 'Statement of Objection' (SO) in the planned Google (GOOG) takeover of DoubleClick."

Privacy advocates already are pouncing on this as a potential roadblock in the European Commission's approval of the deal.

Let's make one thing clear: This is a draft. The analyst firm has not reported that an SO has been sent.

I just spoke with Rebecca Arbogast, a principal analyst with Stifel who focuses on legal and regulatory issues. She was not able to tell me who she learned about the draft from, nor even what type of entities the people she's gathered this information from represent. In other words, even if this draft does indicate something, ClickZ News has no first-hand confirmation that it exists.

Arbogast told me, "If they were sure they were going to clear [the Google/DoubleClick deal], they wouldn't have done it [drafted the SO]."

She added it is common practice among government lawyers, both in the EU and the US to draft such statements in order to clarify thoughts about a particular case, whether it actually is submitted or not. Thus, there's no telling whether this alleged draft will ever see the light of day, at least from what I've gathered from her.

In the end, Stifel predicted the European Commission won't block the merger.

Just last week, observers of the acquisition jumped on a Reuters report that suggested the deal would "likely go ahead." It based this conclusion on a source's statement that the Commission had not sent Google an SO. The source said, "If they had serious doubts, we're at the point where ... if you don't send (such a statement), you don't have time to complete the case."

This information was attributed to "a lawyer acting for a client concerned about the deal."

Well, I'm concerned about the deal between the Mets and Johan Santana going through, but I don't expect anyone will be citing me or my lawyer as reliable anonymous sources on the matter anytime soon.

I've contacted the Commission's Directorate General for Competition in the hopes of confirming this information, or at least vetting it. As far as we understand, the time is close to a reasonable deadline for submitting an SO to the defense, but let's not jump to conclusions based on pure speculation.

Expect to see several stories today and tomorrow that do just that, though.

Posted by Kate Kaye at 1:07 PM | Permalink | Comments (0) | TrackBack

January 15, 2008

For Political Advertisers, Legalities Can Deplete Power of Web's Immediacy

Commercial advertisers may be risk-averse, but they ain't got nothin' on political advertisers. Candidate campaigns might be the worst. In my talk recently with Mindy Finn, director of eStrategy for the Romney campaign, I asked her about how she handles FEC regulations and other legal issues.

“As a political campaign," she told me, "the one layer of vetting that everything goes through is legal…everything."

Of course, commercial advertisers often have the luxury of waiting a couple extra weeks if need be. But because they're wrapped up in the news of the day -- or the hour -- political campaigns have to turn on a dime, and often the lawyers prevent that. In fact, they sometimes limit the positive impact the Web can have for campaigns, according to Finn.

“The biggest legal constraint has been it derails the value you often get from doing something very quickly, and the Web is about quick movement and quick response," she said. "Often you miss out on the edge."

Finn agreed that sometimes holdups by interactive ad tech vendors can also deplete the impact of a Web effort. I've heard that from lots of people working with political advertisers.

Another interesting tidbit from our talk: there's only so much a campaign like Romney's will spend on online media before it becomes wasteful. “I don’t think there's room for online advertising to have a much greater share [in the Romney for President ad budget]," she said. "One thing to remember is that online advertising is just so much cheaper.” Finn did admit more money could be spent on ad creative or other online initiatives, though.

Read more about the Romney campaign's online strategy here.

Posted by Kate Kaye at 4:27 PM | Permalink | Comments (0) | TrackBack

December 21, 2007

Congressman Barton's Squeaky Wheel Gets Google Grease

Mere days after Congressman Joe Barton sent a letter to Google CEO Eric Schmidt, complaining that Google was giving him the cold shoulder, relations have warmed between the two. According to Adam Kovacevich, Google's Sr. Manager, Global Communications and Public Affairs, the firm met with Barton's staffers all day Wednesday at the famed Mountain View headquarters for a talk on Google products and privacy policies.

As for the extensive set of detailed questions Barton submitted to "Dr. Schmidt" regarding Google's collection, storage and usage of data, Kovacevich told me the Congressman has given the firm some leeway beyond the original December 18 deadline.

Stay tuned!

Posted by Kate Kaye at 12:15 PM | Permalink | Comments (0) | TrackBack

December 20, 2007

Possible Remedies in Europe's Decision on Google/DoubleClick

The FTC may have OK'd the Google/DoubleClick deal, but just hold your horses. The European Commission has yet to rule on it. The EU regulators have moved their review of the acquisition into stage 2. (That's the blue, or "Guarded" level if you're going by the Homeland Security threat level gauge).

What could it mean for the two firms? Well, for starters, we can expect the European Commission to hear out competitors of Google and DoubleClick, as well as privacy groups. And chances are, they'll consider consumer privacy-related concerns in making their decision; the FTC could base its ruling only on antitrust-related grounds.

OK, so, let's fast-forward a few months and assume, hypothetically, the folks across the Atlantic have approved the acquisition. I spoke with Douglas Lahnborg, antitrust partner at Heller Ehrman last week in preparation for the FTC decision. He told me, even if the deal is green-lighted in Europe, approval could be contingent on the two firms altering their business operations to assuage competition and/or privacy concerns.

That might not be so easy, especially for Internet outfits that are by their very nature global in scope and typically without physical entities or parts they can readily sell off (as, for instance, an auto manufacturer might).

"It can be difficult for companies to put in place remedies aimed at specific jurisdictions if they have global businesses," said Lahnborg. "From a commercial point of view, they may have to roll remedies out on a global level."

Of course, operational changes, known as "behavioral" changes, would require monitoring by the regulatory body, something they may be reluctant to do.

"From the European Commission's perspective, the most attractive remedy is a structural remedy, when you get rid of part of a business," he continued.

Structural components of DoubleClick could be sold, though. Many have raised the Performics SEM business as one that could be shed to remove the inevitable conflicts of interest stemming from the world's largest search ad seller owning a major buyer of search ads.

Performics already has a potential buyer with his hand up. Earlier this month Valueclick Chief Administrative Officer Sam Paisley told the crowd at the UBS Global Media and Communications Conference in NYC the independent ad management firm would be interested in snapping up Performics. "We would want to be on the short list of people" considered for the deal, he said.

Posted by Kate Kaye at 4:47 PM | Permalink | Comments (0) | TrackBack