OTHER ADVERTISING ISSUES
I. Pop-Up Advertising, Adware, and Spyware
a.
What
is Pop-Up Advertising?
i.
Pop-up
advertising is a term for
advertisements that appear when you open a certain webpage or download
specific
content, such as pictures, documents, or movies
ii.
Pop-up
advertising has had a
great deal of criticism over the years, and some have suggested that it
can
deter more consumers than it is intended to attract
iii.
Although
pop-up advertising is
legal, it is still subject to all of the FTC Rules and Regulations
found here.
iv.
Video
Clip - http://www.youtube.com/watch?v=o69y7BFP1FQ
-
b.
Trademark,
Copyright, and Unfair
Competition Issues and Beyond
i.
There
has been some high profile
litigation that involved pop-up advertising and adware
ii.
U-Haul
International v. WhenU.com
(279 F. Supp.2d 723 (E.D. Va. (2003))
1.
This
case involved pop-up
advertising
2.
Plaintiff
U-Haul’s claimed that
the Defendant WhenU’s pop-up ads:
a.
Infringed
upon U-Haul’s
trademark,
b.
That
it constituted copyright
infringement, and
c.
That
it amounted to unfair
competition
3.
Defendant
WhenU.com distributed
a software program called “SaveNow” that
“bundled” with free software programs
available for download on the internet, such as screen savers
4.
The
user consents to the
installation of the SaveNow program onto his computer in a license
agreement
approved during installation of the free software
5.
The
SaveNow program tracks the
user’s Internet activities and determines whether any of the
domain names or
search terms he types match terms in a directory the program maintains
6.
If
there is a match, SaveNow
pop-ups an advertisement in a separate window on top of the
user’s open window that
is in the same category as the searched for term or the domain name
7.
U-haul
claimed that by bringing
up an advertisement that blocked out their site, it was trademark and
copyright
violation
8.
However,
the Court found that
because WhenU.com was not using any of U-Haul’s trademark or
copyright
protected materials in the advertisements themselves, they could not be
held
liable for infringement
iii.
1-800
Contacts, Inc. v. WhenU.com and Vision Direct,
Inc.
(414 F.3d 400, 2d Circuit (2005))
1.
In
this contemporaneously brought suit, WhenU.com
was sued, along with Vision Direct, by 1-800 Contacts
2.
1-800
Contacts was suing for the same reason as
U-haul in the above case – WhenU.com’s program
SaveNow would display
competitor’s websites in pop-up ads that would appear over
the Plaintiff’s
website
3.
1-800
Contacts claimed that this practice was “inherently
deceptive” and mislead consumers, in that they would think
that the
advertisements were being sponsored by the underlying website
4.
District
Court had issued a preliminary injunction
(which the 2d Circuit reversed here) on the grounds that WhenU.com
violated the
Lanham Act through trademark infringement, stemming from
“initial interest
confusion”
5.
On
appeal, the 2d Circuit said that WhenU.com’s
actions did not amount to a “use” as defined in the
Lanham Act
6.
The
Court reversed the District Court’s injunction
and ordered the dismissal of all claims related to Trademark or
Copyright
infringement
c.
Spyware
i.
What
Is Spyware?
1.
Spyware
is computer software
that gets installed on a user’s computer, generally without
the user knowing it
has happened and without the user’s consent which can violate
the user’s
privacy
2.
A
lot of spyware programs
display advertisements, usually in the form of pop-up ads
3.
Spyware
programs sometimes
display ads for sites that are being searched for, like adware
(explained
above), but many spyware programs can lead to more numerous pop-up ads
and
pop-up ads displaying objectionable content, such as ads for
pornographic
websites
4.
Spyware
has sparked a great deal
of controversy as to its legality, as it can collect personal
information and
can disrupt the user’s computer’s functionality
ii.
Legality
1.
Spyware
creators can be liable
both criminally and civilly
2.
Criminal
a.
In
the
b.
Twice,
the Internet Spyware
Prevention Act has been introduced in Congress, which would allow
imprisonment
of creators of certain kinds of spyware – it has, however,
not yet been passed
3.
Civil
a.
There
have been civil suits
brought by advertisers against spyware manufacturers who create
programs that
“hijack” their advertisements
b.
Claria,
a spyware manufacturer,
had a number of advertisers bring suit in 2002
4.
FTC
Policies on Spyware
a.
For
a good overview of the FTC
Spyware policies, look here
II.
Buzz
Marketing/Steering
a.
Buzz
Marketing
i.
Buzz
Marketing has been around
for a long time, but recently more buzz marketing campaigns have moved
online
ii.
Traditional
buzz marketing where
people hype products, or “buzz” the product,
through word of mouth or
endorsement
iii.
The
FTC has implemented policies
against buzz marketing, however, if the person
“buzzing” the product if is
being paid, bribed with free products or a vested financial interest,
and that
information is not given to the consumer
iv.
Online
buzz marketing typically
takes place in the blogosphere
v.
However,
it is also seen in
affiliate marketing, where a website advertises a product or service
with a
link to the product’s website and does not disclose that they
will be paid every
time a consumer clicks through the affiliate link and buys the product
or
service
vi.
The
FTC is applying the existing
restrictions that applied to paid endorsements and testimonials to
internet
marketing campaigns
b.
Steering
i.
Using
a fake name or “pen name”
to attract consumers
ii.
This
seems inherently misleading
iii.
However,
it is only subject to
self-regulation
III.
Advertorials,
Kick Through Ads, and In-Text Advertising
a.
Advertorials
i.
An
advertorial is an
advertisement that is intentionally made to look like an advertisement
ii.
There’s
a longstanding rule in
the publishing industry that any ad that could be confused with
editorial
content should be clearly labeled as an advertisement
iii.
This
is true for internet
advertising just as it’s always been true in print
iv.
However,
the advertorial has become
more and more prominent over the years
v. Here is an example of an advertorial that was launched by Sony in connection with National Geographic News. Click on the picture below to visit the website.
vi.
This
advertorial appears to be
stories written by a freelance author named Steve Deiwart, who talked
about his
travels in exotic places, and how important technology was to capture
his
journey
vii.
The
sidebar to the right of the
story had different technological devices that would be good to have,
such as a
camera, camcorder, laptop computer, and image processing software
viii.
All
of the recommended products
are Sony products
ix.
Nowhere
on the advertorial
website is there any mention that the story is simply an advertisement
rather
than a news story
x.
In
the UK, the Advertising
Standards Authority implemented a section of the Committee of
Advertising
Practice Code which stated that “Advertisement features,
announcements or
promotions, sometimes referred to as
‘advertorials,’ that are disseminated in
exchange for a payment or other reciprocal arrangement should comply
with the
Code if their content is controlled by the marketers rather than the
publishers” and that “marketers and publishers
should make clear that advertisement
features are advertisements”
xi.
There
is no such agency
regulation in the
b.
Kick
Through Ads
i.
Kick-through
ads had become
rampant for a while in online advertising
ii.
These
types of ads appear as
links on a website – however, if a user simply mouses over
the ad and does not
click, it will take the user to the website
iii.
Orbitz
had a campaign of
kick-through ads that went highly contested by the public
iv.
Kick-through
ads are rarely seen
anymore likely due to the fact that the public outcry against them was
so vast
c.
In-Text
Advertising
i.
IntelliTXT
created an
advertising scheme known as “in-text advertising”
ii.
This
is where certain words or
phrases within the text of a website are linked to ads that pop-up when
the
user mouses over them
iii.
A
good example can be seen here
iv.
Companies
such as Forbes.com and
eWeek used IntelliTXT ads, then dropped them due to protests from
staff,
industry watchdogs, and others
v.
The
reason for dropping the ads
went beyond the obtrusive nature of the ads – there was a
concern about who would
make decisions about editorial content and contextual links within that
content
vi.
This
would create an appearance
of a conflict of interest between the publisher and editor, which both
would
want to avoid
IV.
Conclusion
a.
Online
advertising, though
subject to FTC policies on disclosure and content, is highly
self-regulating
b.
Because
of this, the industry
needs to take proactive steps towards veracity in advertising
c.
This
is crucial if advertisers
want to keep this minimal amount of government oversight
d.
Advertisers
need to also
remember that the ultimate goal is to attract consumers to their
products, and
that by using advertising practices such as pop-up ads or advertorials,
they
can in fact alienate consumers
e.
Online advertisers
should
therefore push for stronger policies against these types of
advertisements
Sources:
1-800
Contacts, Inc. v. WhenU.com and Vision Direct, Inc., 414 F.3d 400 (2d
Cir.,
U-Haul
International Inc. v. WhenU.com, Inc.,
279 F. Supp.2d 723 (E.D. Va.,
Saunders,
Christopher. “U-Haul, 1-800 Contacts
Join Anti-Pop-Up Bandwagon.” ClickZ,
Spizziri, Martha.
“Ethical Issues In Online
Advertising.” About.com.
<http://advertising.about.com/od/onlineadvertising/a/guestethicalads.htm>
Clark, John.
“Road Scholar: An Airstream Traveler’s
Digital Diary.” National Geographic News, 2002.
<http://news.nationalgeographic.com/sonydigitallifestyles/>
“What If Pop-up
Ads Happened In Real Life?”
<http://www.youtube.com/watch?v=o69y7BFP1FQ>
“Advertorials
Must Be Clearly Identified,” http://www.out-law.com/page-4853
Segan, Sascha.
“Few Sites Reject Unusual $10M Sony
'Advertorial' Campaign.” Consumer Reports, 9 September 2002.
<http://www.consumerwebwatch.org/dynamic/online-advertising-investigation-sony-campaign.cfm>
Winslow,
Lance. “False and Misleading
Advertising Online - Steering,
Buzz Marketing and Dishonesty.” Ezine Articles.
<http://ezinearticles.com/?False-and-Misleading-Advertising-Online---Steering,-Buzz-Marketing-and-Dishonesty&id=1588932>