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  1. Internet Advertising: New Ways to Make Money or Promote Your Brand While Not Getting Sued Presented by:

  2. Speaker Kari L. Moeller • Kari Moeller is Senior Counsel with Turner Broadcasting System, Inc., • Her practice covers areas such as digital and wirelessadvertising, online behavioral advertising, user-generated content, electronic commerce, consumer data collection and usage, consumer protection, privacy, and data security. • She is a member of the Interactive Advertising Bureau Legal Affairs Council and also manages the Turner Legal Department Pro Bono Program. • Her past experience at Turner also includes handling online intellectual property enforcement matters and managing Turner’s domain name portfolio, during which she was a member of the ICANN Whois Working Group.

  3. Speaker Stephen Combs • Stephen is Director, Legal at HowStuffWorks, Inc. (, a subsidiary of Discovery Communications, LLC. His responsibilities include managing all legal issues for advertising relationships and content providers. • Formerly an attorney at Morris, Manning & Martin, LLP in the firm’s Technology Law Group, representing leading Internet companies on content licensing, advertising, privacy, and e-commerce transactions. • Corporate Counsel at Home Depot handling IT, privacy, e-commerce, and related issues for • Former Co-Editor of “Law of the Internet,” a LexisNexis legal publication dedicated to Internet legal issues; Appeared on “Layman’s Lawyer,” a PBS television show on the topic of the CAN-SPAM Act.

  4. Agenda • Categories of Advertising • Advertising Examples • Search Engine Marketing • Process and Technology • Pricing Models • Use of Intermediaries/Ad Networks • Legal Process • Privacy Issues • Legal Issues Checklist

  5. Categories of Advertising • Display Ads • (All Types) • Search Engine Marketing • (Discussed Briefly) • Affiliate Marketing • (Not Discussed-Be Careful) • Email Marketing • (CAN-SPAM)

  6. Advertising Examples

  7. Search Engine Marketing (Google) • Google's AdWords • Advertisers buy search keywords and get listed as a “sponsored link.” • Note that "organic search" is the best and least expensive (free) Internet advertising. Have good content on your site, and let Google index your site. • Google's AdSense For Content (AFC) • allows advertisers to pay for ads that are served on publisher's pages with content related to your business. • Google's AdSense for Search (AFS) • is generally the same as AFC except it relates to searches on Google's site or the publisher's site. Ads are displayed alongside search results instead of content.

  8. Process and Technology • The Parties • Ad Serving Phases • Impression Tracking Models • Publisher, 3PAS, 4PAS and Logging Process • Images Courtesy of Interactive Advertising Bureau ( • Used with permission. Further use, display or copying is prohibited.

  9. The Parties • Media Company/Publisher • HSW, Turner, etc. • Ad Networks • 300 or more players • 24/7 Real Media, Yahoo/Blue Lithium, etc. • Agency for Advertiser • Lots of Agencies • Advertiser • Retailers, Manufacturers, etc.

  10. Process and Technology • Campaign Management Systems • Solbright • Operative • Ad Server Systems • DART • ATLAS • Platform A • Analytics Systems • Omniture

  11. Process and Technology • Publisher, 3PAS, 4PAS and Logging

  12. Pricing Models • “Cost Per” Pricing • CPA (Cost-per-Action) • CPC (Cost-per-Customer) • CPC (Cost-per-Click) • CPL (Cost-per-Lead) • CPM (Cost-per-Thousand) • CPO (Cost-per-Order) • Sponsorships/Share of Voice • Flat Fees • Revenue Sharing on Content • % of Ad Revenue

  13. Use of Intermediaries/Ad Networks • Intermediaries control majority of display inventory; ~30% of revenue • Much lower CPM (<$1 vs. 5x to 30x for premium/direct sales) • Benefits of using Intermediary • Lower transaction costs • Allows clearing excess remnant inventory. • Concerns for Media Companies • Brand impact to media company from low quality ads • Sales channel conflict • Price erosion

  14. Legal Process • Review of Industry Groups • Insertion Order T&Cs • Potential Insertion Order Issues • Top 10 Gotchas for Insertion Orders

  15. Review of Industry Groups • Interactive Advertising Bureau (IAB): • A national trade association, founded in 1996, that represents the interests of companies that engage in and support the sale of digital advertising. Its members are responsible for selling over 86% of online advertising in the United States. • American Association of Advertising Agencies (AAAA): • A national trade association, founded in 1917, that represents the interests of advertising agencies. Its membership produces approximately 80% of the total advertising volume placed by agencies nationwide. Often referred to as the “4As.” • Network Advertising Initiative (NAI) [Discussed Further in Privacy Topic] • The NAI is a cooperative of online marketing and analytics companies committed to building consumer awareness and establishing responsible business and data management practices and standards.

  16. IAB/AAAA Terms and Conditions • Form IAB/4As Terms and Conditions • Created jointly by the IAB/4As to identify and address key issues in standard digital ad buys. • Do not fully address sponsorships and other buys involving content production or integration, but can be used as the basis for agreements covering those buys. • Where can you find them? The IAB website. • • This is the link to the official terms. • • This is the “cliff notes” version with notes from the drafting committee about the intent behind each section.

  17. IAB/AAAA Terms and Conditions • Bonus Impressions • If Agency is using a third party server Media Company can’t bonus more than 10% over the impressions guaranteed/cap listed in the IO without prior written consent. • If Media Company does, could be responsible for charges above that 10%. • Catch-22 that sponsorships/share of voice (SOV) buys run for specified dates regardless of over-delivery, unless the IO sets a cap. • Ad Materials • Ad content must comply with site/advertising guidelines and Media Company has broad ability to pull ads (subject to make-goods). • If a campaign doesn’t start due to late creative, Media Company can charge for the wasted inventory.

  18. IAB/AAAA Terms and Conditions • Confidentiality • The ad description and pricing are confidential. • Third Party Ad Server • Agency can track delivery through a third-party ad server. When a discrepancy occurs: • If it is 10% or less, the agency pays the invoice. • If it is more than 10%, the difference is treated as under-delivery and agency can opt to either accept a make-good or pay off the 3rd party numbers plus 10%. • Reselling • The inventory purchased can’t be resold to a third party.

  19. IAB/AAAA Terms and Conditions • “Parole Evidence” • Only the IO sets out the contract terms. Emails or other correspondence are not binding. • Acceptance • Signing or serving the first ad impression, whichever happens first, means acceptance of the terms. • Ad Placement • Media Company must comply with any placement requirements or editorial adjacency guidelines in the IO. • Cancellation • The IO can be canceled without penalty on 30 days notice before the first impression is served and 30 days notice after the first impression is served, until a straight 14 day notice becomes the later date.

  20. IAB/AAAA Terms and Conditions • “Without penalty” • Agency doesn’t have to pay for entire campaign – only through effective date of cancellation. • Short rates • Apply to the extent noted in the IO. • Measurement Guidelines • Provide for measurement standards and auditing process

  21. IAB/AAAA Terms and Conditions • Measurement Guidelines • From IAB/4A T&Cs: “Media Company will make reasonable efforts to publish, and Agency shall make reasonable efforts to cause the 3rd Party Ad Server to publish, a disclosure in the form specified by the AAAA and IAB regarding their respective ad delivery measurement methodologies with regards to compliance with the IAB/AAAA Ad Measurement Guidelines.” • Sets standards for audience measurement in online ad campaigns and for ad campaign reporting (e.g., impressions, caching, and robot and spider filtering.) • Establishes auditing guidelines for how various vendors and media companies should be audited. • Measurement Guidelines can be found at

  22. Editorial adjacencies or other placement restrictions Exclusivity Cancellation Use of third party ad networks/servers Serving, reporting, invoicing Over-delivery or under-delivery penalties IO applies to all ad buys IO automatically renews IO that looks like it is IAB/AAAA terms, but really isn’t READ THE TERMS! Top 10 Gotchas for Insertion Orders

  23. Key U.S. Laws Affecting Data Privacy • CAN-SPAM Act of 2003 • Children’s Online Privacy Protection Act (COPPA) • Federal and State “Do Not Call” Lists • State and Federal Consumer Protection Statutes

  24. Privacy Issues in Ad Sales • Integrated buys w/ sweepstakes • Surveys • Landing Pages • Mobile advertising • Behavioral targeting

  25. Self Regulation Affecting Data Privacy • Interactive Advertising Bureau (IAB) Privacy Principles • • Requirements under IAB/4As Terms & Conditions • Network Advertising Initiative (NAI) Privacy Principles • • NAI recommended disclosures for privacy policies • NAI-Opt-Out Page • Posted Privacy Policy • Applies for Media Company, Advertisers, and Intermediaries • All parties need to disclose privacy practices

  26. IAB/4As Privacy Terms • “It is Agency’s obligation to submit Advertising Materials in accordance with Media Company’s then existing advertising criteria or specifications (including. . .privacy policies).” • “All personally identifiable information provided by individual web users who are informed that such information is being gathered solely on behalf of Advertiser pursuant to Advertiser’s posted privacy policy is the property of Advertiser, is subject to the Advertiser's posted privacy policy, and is considered Confidential Information. Any other use of such information must be set forth in the IO signed by both parties.” • “Media Company, Agency, and Advertiser shall post on their respective Web sites their privacy policies and adhere to their privacy policies, which abide by the applicable laws. Failure by Media Company, on one hand, or Agency or Advertiser, on the other, to continue to post a privacy policy or nonadherence to its own privacy policy is grounds for immediate cancellation of the IO by the other parties.”

  27. NAI Privacy Principles • Working with the Federal Trade Commission (FTC), the NAI created a set of self-regulatory industry standards, called the NAI Principles, that mandate how 3rd party advertising networks can use information about users. • The NAI Principles require member companies to provide notice that • Advertising networks may place a 3rd party cookie on your computer; and • Such a cookie may be used to tailor ad content both on the site you are visiting as well as other sites within that network that you may visit in the future. • Member companies must also provide a link to the NAI global opt-out page

  28. Behavioral Advertising • Nov. 2007 - FTC “Town Hall” meeting and subsequent release of draft self-regulatory principles that define “online behavioral advertising” as “the tracking of a consumer’s activities online – including the searches the consumer has conducted, the web pages visited, and the content viewed – in order to deliver advertising targeted to the individual consumer’s interests.” • 1st party v 3rd party data collection lines are blurring definitions • E.g., widgets – who is collecting the data? On what web site is it collected? • Proposed do not track list

  29. Recent Problem Areas • Facebook Project Beacon • Negative PR + consumer backlash for program sharing and posting of behavioral tracking data • Blockbuster • Consumer sued Blockbuster over its participation in the Facebook Beacon program • Specific to video privacy law, but cogent example of why we need to consider all issues with new business methods

  30. Recent Problem Areas/Developments • Priceline, Travelocity, Cingular Wireless • NYAG case held these three advertisers liable for where/how ads were delivered and displayed by Direct Revenue software • Advertisers required to pay fines and reform practices • Case revolves around adware, but could indicate trend of holding advertisers liable when their ads are delivered via behavioral tracking done by an ad network • Phorm (UK) / NebuAd (US) • New type of targeted ads (ISP targeted or “deep packet inspection”) • System can track every click a person makes online by collecting clicks from user’s ISP • Legal concerns with interception of users’ data without consent

  31. Legal Issues Checklist • Privacy Policy Disclosures • Advertising Acceptability Guidelines • Legal Review for IOs and Third Party Partners • Privacy Office for Data Collection and Management • Technical Approval Process for Ad Specs and Third Party Partners • Measurement Guidelines and Auditing

  32. Questions Q&A

  33. Contact Information • Stephen Combs • • Kari Moeller • • Presentation will be posted at •