Managing Risk: Legal Issues for Affiliate Marketers & Affiliate Marketing Managers
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Affiliate marketing is one of the most cost-effective techniques for monetizing web site traffic and driving sales. Unfortunately, it has a reputation for high risk. While the industry is unlikely to ever be risk-free, it is possible to manage risk by: (1) understanding how techniques like behavioral and contextual targeting affect consumers, affiliates and merchants, (2) understanding the legal and regulatory environment, (3) understating risks involved with prospective marketing partners, (4) using and maintaining proper contracts that allocate risk and provide appropriate indemnifications, and (5) keeping informed about the changes in technology, marketing practices and the regulatory environment. Attendees will learn how to identify these issues and develop policies and procedures to keep informed about the current technology, marketing strategies and regulatory compliance. Topics covered include: Behavioral/Contextual Advertising Regulatory/Industry Compliance : FTC Guides & Enforcement Actions CAN-SPAM compliance IP Law: Rules governing use of others™ Trademarks/Keywords, Right of Publicity/Endorsement Issues. Identifying, protecting against, and disputing accusations of Click-Fraud
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Managing Risk: Legal Issues for Affiliate Marketers & Affiliate Marketing Managers
- 1. Managing Risk: Legal Issues for Merchants & Affiliate Managers Presented By: David Adler Partner Leavens, Strand, Glover & Adler, LLC www.lsglegal.com www.ecommerceattorney.com Adlerlaw.wordpress.com @adlerlaw
- 2. Technological Change Is Causing A Shift In Affiliate Marketing
- 3. Effective marketing requires Legal Compliance
- 4. Technological innovation comes with Massive Risk
- 5. • 42.9% of publishers say they use 2 - 5 websites • U.S. Affiliate Marketing spend will reach $4.1B in 2014 (Forrester Research) • 62% of U.S. online buyers use social networking sites Only 2% of U.S. online buyers have purchased through social networking sites. (Forrester Research) • Click fraud reached 12.7% in Q2 2009 – down from 13.8% or Q1 2009 and from the 16.2% rate reported for Q2 2008. (Click Forensics) Game Changing Numbers
- 6. • Behavioral / contextual targeting (OBA) • FTC enforcement • Evolving Privacy Standards • Mobile • Text Spam Technology Advances = Greater Scrutiny
- 7. The Three C’s Content Contracts Compliance
- 8. Intellectual Property + Brand Protection Contests + Sweepstakes Content
- 9. Protect Your Investment • Protect your Content Avoid Simple IP Mistakes • Keywords, Right of Publicity, Endorsements Remember Advertising Restrictions • FTC Blogger Guidelines/Deceptive Practices Content
- 10. 1. Prepare. Pay attention to social media conversations 2. Evaluate. Is Email Marketing CAN SPAM Compliant? 3. Participate Content: Social
- 11. FTC / State AGs / Trade Associations Content: Industry Initiatives
- 12. a. Merchants b. Affiliates Contracts
- 13. a. Protect your Brand & IP Rights b. Protect Against Fraud Contracts: Merchants
- 14. Keep informed about changes in technology, marketing practices & regulations. As Affiliate Marketing becomes more pervasive, state legislatures, federal agencies trade groups are reacting. Compliance
- 15. State, Federal & Case law, as well as industry guidelines and terms and conditions • FTC Act and FTC rules • CAN SPAM • State and federal privacy laws • Traditional advertising, promotions and consumer protection laws • Industry guidelines • Terms and conditions for social media platforms Compliance
- 16. Review Program Contracts • Guidelines for Keywords/Trademarks/Copyrighted Content • CAN SPAM Compliance • Privacy Issues • Social Media Guidelines by Platform “Legal” Audit
- 17. Links to Important Reources Performance Marketing Assoc. http://performancemarketingassociation.com/nexus-tax/affiliate-nexus-tax-the-states Mobile Marketing Assoc. Affiliate Marketing Committee http://www.mmaglobal.com/policies/committees/affiliate-marketing Mobile Privacy • H.R 210 mobile device tracking tech Trends
- 18. Contact Details David M. Adler Leavens, Strand, Glover & Adler, LLC 203 North LaSalle Street, Suite 2550 Chicago, Illinois 60601 dadler@lsglegal.com Main: (312) 488-4170 Direct: (866) 734-2568 Direct Fax: (312) 488-4177 www.lsglegal.com www.ecommerceattorney.com adlerlaw.wordpress.com IndieFilmLaw.wordpress.com LinkedIn: http://linkedin.com/in/adlerlaw Twitter: http://twitter.com/#!/adlerlaw
Editor's Notes
- New techniques like behavioral and contextual targeting affect consumers, affiliates and merchantsexplosion of social mediaFTC enforcementevolving privacy standards “big data” Do Not Track standardsMobile
- Understanding the legal and regulatory environment is KEY to complianceFTC: Advertising/PrivacyState AGsCAN SPAMIndustry Initiatives
- Behavioral and contextual targeting affects consumers, affiliates and merchants; + explosion of social media = myriad new interactions/concerns FTC enforcementLegacy Learning Systems (endorsements): $250k + consent orderClick booth (health claims & "fake" news sites) $2MM + consent orderEvolving Privacy Standards = “Big Data” + Do Not Track standardsAlso Mobile + Text Spam
- Affiliate Marketing is shrouded in Uncertainty: what laws apply to affiliate marketing programs how to comply with these lawslawsuits have challenged various marketing programs and data collected by marketers. programs are governed by a wide variety of state and federal statutes and case law.This Preso provides an overview of the most popular types of programs as well as promotional text messages and mobile apps – as well as mobile privacy issues.
- It’s a Numbers Game – Not about the brandTrafficEmail ListsAdWareKeyword Advertising Click FraudConversionContent
- Protect your ContentDevelop unique Landing PagesGet product info from Merchants to create ArticlesAvoid simple IP mistakesKnow rights and limitations to use copyrighted content and trademarksAdvertisingBlogger Guides [handout]Epic marketing case (Browser-history sniffing) = FTC's deceptive practices enforcement had focused on affirmative misstatements (for example, in the Upromise case), Epic case marks continued trend -lack of transparency = inherently deceptive.
- FTC: Affiliate Marketing Rule 16 CFR Parts 680 and 698 [Regulation No. 411006] - Implements the affiliate marketing provisions in section 214 of the Fair and Accurate Credit Transactions Act of 2003DMA Online Behavioral Advertising (OBA) Compliance: http://www.dmaresponsibility.org/privacy/oba.shtml
- Contractual Provisions:Regulatory ComplianceCAN SPAMCOPPAUse of Third- Party Web SitesOn-Site “Stores” a la Auctiva/eBayRound-tripping“Bad” Traffic
- Require Affiliates to identify Sub-AffiliatesRequire Affiliates to generate own contentAsk Customers how they found youProhibit Affiliates from purchasing your brand name for PPC campaignsProhibit Affiliates from incorporating brand names or domain names into theirs (typosquatting)Define Fraud: click-through rates that are much higher than industry averages click programs generating clicks unsubstantiated by site trafficAdvertiser-reported fraudulent leadsmuch higher conversions rates than industry averagesUse of fake redirects, automated software, and/or email abuse
- FlogsAstroturfing: corporate or government messaging falsified as coming from the public or a grassroots movement. Fake News Sites: Clickbooth: FTC announced a $2 million settlement with the Clickbooth affiliate network over charges that Clickbooth’s affiliate marketers deceived consumers with “bogus weight loss claims on fake news sites” e.g. online6health.com, channel5healthnews.comSocial Media: Facebook, Inc. v. MaxBounty, Inc.,MaxBounty established a network of affiliates for which it created Facebook pages.