Relationships between online advertisers and publishers are becoming increasingly complex. In many cases, numerous intermediaries are involved. A car maker, for example, might hire an online ad network to place its ads, and the network may then turn around and pay another affiliate to place the ads in front of consumers. It may sound absurd, but if you asked online advertisers where their ads are appearing, many would not be able to give you a full account.

According to Ken Dreifach, chief of the Internet Bureau in the Office of New York Attorney General Elliot Spitzer, marketers -- and those they hire -- would be wise to seek this information out.

At a recent IAPP-TRUSTe KnowledgeNet in New York City, Dreifach gave a talk entitled “Spyware, Spam, and Other Online Marketing Pitfalls.” By “pitfalls,” Dreifach explained, he meant the tendency for advertisers to overlook the marketing initiatives conducted on their behalf -- or, as the case may be, the tendency to look the other way. An advertiser may assume that actions other parties take that are only indirectly related to its marketing are beyond the scope of its responsibility. That’s a risky assumption, claims Dreifach, because if a third party is acting deceptively and advertisers or middlemen benefit, they may be liable as well.

Online marketing pitfalls may include third-party agents delivering ads via software downloaded without user consent (spyware) or violating the advertiser’s privacy policy outright. Claiming that the third party was an independent contractor or wasn’t explicitly directed to act deceptively isn’t going to fly. If the agent is “more or less doing what you told them to do,” Dreifach said, and if it is acting fraudulently, then under New York law, you can be held responsible.

How do you prevent yourself from being caught up in such pitfalls? Dreifach’s suggestion to marketers: Perform due diligence. In emphasizing the importance of knowing what information third-party contractors collect from consumers and where ads are served, he echoed recent comments made by both the FTC and consumer groups. For example, as Ari Schwartz, deputy director of the Center for Democracy and Technology, argued in March, “The time is now for companies to take a more active role in policing their own online advertising activity.”

In addition, Dreifach emphasized that even a long chain of intermediaries between an advertiser and a deceptive act is not necessarily going to immunize those higher in the chain from liability. So it’s incumbent upon advertisers, as well as others down the chain, to obtain some level of transparency from those acting on their behalf. This may seem a burden to place on the shoulders of those who advertise online. It may not be such a terrible thing for online marketers to pay closer attention -- as many have started to -- to what exactly their ad dollars are buying.

Alan Chapell is president of Chapell & Associates, a consulting firm that helps companies understand privacy and incorporate consumer perception into product development. He publishes a daily blog on issues of consumer privacy.

 

AppLabs Technologies