By Kevin Newcomb , November 13, 2009
Heading into the holiday shopping season, search marketers are worried that Google's new trademark policy for AdWords will drive up costs for big brands.
"The holiday season will be a real proving ground, to see how quickly Google responds to issues," Jeremy Hull, account leader at Range Online Media, told ClickZ. "Do they have an adequate team in place, with policies and procedures that are scalable for the holidays?"
While the number of infringing ads a brand owner has to deal with will vary, the issue is amplified during the holiday shopping season, Hull said. "The fraudulent advertisers know that the legitimate marketers are swamped with holidays, and use the busy time to push out more trademark-infringing ads," he said.
The impact of other advertisers bidding on a trademark most often comes in the form of increased costs to the trademark owner, who has more competition on his trademarked terms, which drives up bid prices. There's also the issue of missed revenue, where a searcher will buy from another site advertising on a trademarked keyword, and not from the trademark owner's site, Hull said.
In May 2009, Google changed its policy toward trademark usage in AdWords ads. Previously, Google had not allowed advertisers to use trademarks they didn't own, either for targeting or in ad text, and Google was responsible for policing that policy.
Under the new trademark policy, advertisers can use trademarks they don't own under certain circumstances, such as if they are reselling a product or discussing the product on an informational site.
Advertisers that are using trademarked terms includes affiliates of a brand, who may or may not have permission from the trademark owner, and sellers of gray-market and black-market goods, who usually don't have permission.
"Anything you could buy as a knock-off on the streets of New York and rub the logo off with your fingernail...those are the same brands you are seeing victimized by fraudulent behavior online as well," Hull said. "So, major apparel, luxury, jewelry, fragrance, and other well-known and sought after brands are the hardest-hit by trademark infringement."
While gray- and black-market goods are an issue for some categories, the bigger issue for many retailers is inadequate trademark policies built into their own affiliate programs, according to Hull.
The increased competition has caused several Range clients, especially those with luxury retail brands, to see a dramatic decrease in clicks on their ads since the policy change, despite similar impression volume, Hull said.
Others have also seen an increase in cost-per-click (CPC) rates they pay for ads, according to Alison Childers, senior account manager at Range Online Media. On some brand terms, CPC rates have risen by as much as 50 percent, while clickthrough traffic has dropped by 30 percent, she said.
"Those numbers are holding true across all big brand terms," Hull said. "It's a free-for-all on brands."
What Brands Fear
Even when that's not happening, there is potential damage to the brand in the form of mixed messages to consumers, such as an affiliate using a low-cost message to sell a luxury brand, Hull said. Big brand owners go to great lengths to control the messages around their brands and align their efforts, but without trademark protection in AdWords, "they've lost control of the space," he said.
Additionally, the onus is on trademark owners find ads using their trademark without permission, and then bring them to Google's attention via an online form.
"We believe that this approach gives users more choices and access to as much information as is relevant to their search or interest," a Google spokesperson told ClickZ. "Some trademark owners support other advertisers using their trademarked terms in ad text to generate traffic and sales of their products; other trademark owners feel differently."
Google's Policy
Google will investigate allegations of trademark infringement "as a courtesy," when trademark owners file a complaint with them. If Google's investigation finds that an advertiser is using a trademark owner's term in the ad text in a manner which is competitive, critical, or negative, it will disapprove the ad for violation of Google's policies, notify the offending advertiser, and prevent the advertiser from using the trademark in similar ad text in the future. Repeat offenders of this policy are subject to account suspension, according to Google's spokesperson.
It was pragmatic, from a business perspective, for Google to change its policy, according to Patrick Garrett, managing director of Outrider, part of GroupM Search.
"They've handed off all the legwork required to track down violators to the advertisers. They've also opened up new spending opportunities by allowing more people to buy ads on keywords that they couldn't buy on before," Garrett said.
Google basically brought its policy in line with that of other search engines. But, since Google has such tremendous volume compared to other search engines, the changes Google made in May had a big impact on advertisers, Garrett said.
"There's been an onslaught of people playing in the trademark space [since Google changed its policy]. Some are people that have the right to use your trademark, others don't." Garrett said. "We're OK with taking on the burden of monitoring our clients' trademarks, but we'd like more clarity from Google on how they're going to help us combat issues when they come up."
For instance, Garrett would like Google to make it clear what criteria Google uses when deciding whether to take down a single ad or ban an advertiser completely. It's currently too easy for an advertiser to simply create a new ad that still uses the trademark after the first one is banned, he said. Also, he said it's not clear what evidence Google wants from trademark owners to help expedite the process.
Hull agreed that clarity into Google's trademark policy is uncharacteristically lacking. "Everything else with Google is so cut-and-dried; you know the process. This seems so nebulous," he said.
Monday, November 16, 2009
Friday, November 13, 2009
Privacy Advocates Want To Bust Blockbuster Over Beacon
Privacy advocates are asking a federal appellate court to uphold a ruling allowing consumers to sue Blockbuster for participating in Facebook's Beacon program.
In papers filed recently with the 5th U.S. Circuit of Appeals, the Electronic Privacy Information Center is urging the court to reject Blockbuster's argument that consumers have no right to bring a class-action lawsuit because the company's terms of service require mandatory arbitration.
"To permit companies to substitute unilaterally mandatory arbitration clauses for the express language set out in federal statute will undermine privacy safeguards, contribute to further privacy harms, and frustrate the intent of Congress," the privacy group argues.
The case grows out of Facebook's all-but-defunct Beacon program, which told users about their friends' activity at outside sites including Blockbuster, Zappos and Overstock. The program originally operated by default, spreading news about members' purchases unless they affirmatively opted out. Some users immediately complained that they were blindsided by the platform, which transmitted information that they had intended to keep private. Members also said they didn't see the opt-out boxes -- some of which were served via pop-ups that disappeared after just 20 seconds.
Within weeks of its launch, Facebook revised the program to make it opt-in. Shortly afterwards, the company allowed people to permanently opt out.
In April of 2008, consumers in Texas filed a potential class-action lawsuit against Blockbuster for participating in Beacon. The consumers alleged that the movie rental company had violated the Video Privacy Protection Act, a 1988 federal law passed after a newspaper obtained video rental records of U.S. Supreme Court nominee Robert Bork. That law provides for damages of $2,500 per violation.
Blockbuster said the dispute did not belong in court because its user contract called for arbitration and banned class-action lawsuits, but U.S. District Court Judge Barbara Lynn in Dallas rejected that argument. She ruled in April that Blockbuster's contract with users was "illusory" because the agreement said that movie rental store could change the terms and conditions at any time.
Blockbuster appealed to the 5th Circuit, which is now considering the case.
John Verdi, a lawyer with the Electronic Privacy Information Center, says that a decision in Blockbuster's favor would effectively allow companies to avoid federal privacy law.
"There's a real risk that the court could put consumers in a situation where, as a practical matter, they wouldn't have the rights that Congress intended them to have," he says.
Regardless of the appellate court's decision in this appeal, the consumers' lawsuit against Blockbuster could still be dismissed if a class-action settlement of a separate lawsuit in California against Facebook and its partners goes through.
In the California case, U.S. Magistrate Judge Richard Seeborg in San Jose tentatively approved a deal that calls for Facebook to shutter Beacon permanently and to pay $9.5 million -- approximately two-thirds of which will fund a new privacy foundation. If that settlement is approved in its current form, it would extinguish the Texas litigation against Blockbuster. But the consumers in Texas are likely to object to that settlement, and the ultimate outcome remains uncertain.
In papers filed recently with the 5th U.S. Circuit of Appeals, the Electronic Privacy Information Center is urging the court to reject Blockbuster's argument that consumers have no right to bring a class-action lawsuit because the company's terms of service require mandatory arbitration.
"To permit companies to substitute unilaterally mandatory arbitration clauses for the express language set out in federal statute will undermine privacy safeguards, contribute to further privacy harms, and frustrate the intent of Congress," the privacy group argues.
The case grows out of Facebook's all-but-defunct Beacon program, which told users about their friends' activity at outside sites including Blockbuster, Zappos and Overstock. The program originally operated by default, spreading news about members' purchases unless they affirmatively opted out. Some users immediately complained that they were blindsided by the platform, which transmitted information that they had intended to keep private. Members also said they didn't see the opt-out boxes -- some of which were served via pop-ups that disappeared after just 20 seconds.
Within weeks of its launch, Facebook revised the program to make it opt-in. Shortly afterwards, the company allowed people to permanently opt out.
In April of 2008, consumers in Texas filed a potential class-action lawsuit against Blockbuster for participating in Beacon. The consumers alleged that the movie rental company had violated the Video Privacy Protection Act, a 1988 federal law passed after a newspaper obtained video rental records of U.S. Supreme Court nominee Robert Bork. That law provides for damages of $2,500 per violation.
Blockbuster said the dispute did not belong in court because its user contract called for arbitration and banned class-action lawsuits, but U.S. District Court Judge Barbara Lynn in Dallas rejected that argument. She ruled in April that Blockbuster's contract with users was "illusory" because the agreement said that movie rental store could change the terms and conditions at any time.
Blockbuster appealed to the 5th Circuit, which is now considering the case.
John Verdi, a lawyer with the Electronic Privacy Information Center, says that a decision in Blockbuster's favor would effectively allow companies to avoid federal privacy law.
"There's a real risk that the court could put consumers in a situation where, as a practical matter, they wouldn't have the rights that Congress intended them to have," he says.
Regardless of the appellate court's decision in this appeal, the consumers' lawsuit against Blockbuster could still be dismissed if a class-action settlement of a separate lawsuit in California against Facebook and its partners goes through.
In the California case, U.S. Magistrate Judge Richard Seeborg in San Jose tentatively approved a deal that calls for Facebook to shutter Beacon permanently and to pay $9.5 million -- approximately two-thirds of which will fund a new privacy foundation. If that settlement is approved in its current form, it would extinguish the Texas litigation against Blockbuster. But the consumers in Texas are likely to object to that settlement, and the ultimate outcome remains uncertain.
Wednesday, November 11, 2009
FTC Urged To Clamp Down On Data Collection Online
Privacy advocates are renewing calls for the Federal Trade Commission to impose limits on online data collection and ad targeting.
"It should be evident to all that self-regulation to protect consumer privacy online has been a dismal failure," the Center for Digital Democracy and U.S. Public Interest Research Group wrote in comments submitted to the Federal Trade Commission in advance of its privacy roundtable next month. "We need strong baseline laws and regulations to ensure serious industry compliance."
The Interactive Advertising Bureau, which opposes new behavioral targeting regulations, doesn't plan to submit comments before the first roundtable, says Mike Zaneis, vice president for public policy.
"We're going to wait and see how this first day of roundtables goes, and see if it merits comments," Zaneis says. The FTC has scheduled the first of three day-long privacy discussions for Dec. 7.
The privacy advocates argue that Web companies are not providing consumers with enough power over the collection and use of their data. "Consumers are faced with a largely invisible and all-encompassing data collection apparatus, often operating automatically, that makes decisions about the prices and services they are offered," the groups write. They add that Web users "need to know, and should have the right to approve, the marketing segments into which they have been placed."
The advocacy groups also say the industry's new self-regulatory principles -- unveiled in July by the American Association of Advertising Agencies, Association of National Advertisers, Council of Better Business Bureaus, Direct Marketing Association, and the Interactive Advertising Bureau -- do not adequately protect consumers.
Among other criticisms, the privacy groups allege that the ad associations' new guidelines don't sufficiently guard sensitive data. The principles require companies to obtain consumers' consent to collect such data, but define it as financial account numbers, social security numbers, pharmaceutical prescriptions, or medical records about a specific individual. The privacy groups argue that the industry's definition of "sensitive" is far too narrow.
The digital rights organization Center for Democracy & Technology also filed comments that were critical of current online behavioral-targeting policies. The CDT called on the FTC to endorse broad fair information collection practices.
The FTC's current self-regulatory guidelines emphasize that companies should notify users about online tracking and targeting and allow them to opt out. But the CDT says that notice-and-consent regime doesn't go far enough because it only allows consumers to make a choice at the time of collection. "Long after data is collected, it lives in a Wild West of shared and sold personal profiles and databases that give consumers no control over how their identities will be tracked and used," the group wrote.
The CDT also expressed skepticism about whether industry self-regulation can protect consumers. "A self-regulatory system that relies on trade associations to provide implementation and accountability guidelines is clearly incomplete: the activities of non-members will remain unregulated," the organization argued.
Three years ago, the Center for Digital Democracy and U.S. Public Interest Group filed a petition with the FTC that kicked off the current debate about whether behavioral targeting compromises users' privacy. In January, they filed papers with the FTC alleging that mobile companies were using "unfair and deceptive" behavioral targeting strategies.
"It should be evident to all that self-regulation to protect consumer privacy online has been a dismal failure," the Center for Digital Democracy and U.S. Public Interest Research Group wrote in comments submitted to the Federal Trade Commission in advance of its privacy roundtable next month. "We need strong baseline laws and regulations to ensure serious industry compliance."
The Interactive Advertising Bureau, which opposes new behavioral targeting regulations, doesn't plan to submit comments before the first roundtable, says Mike Zaneis, vice president for public policy.
"We're going to wait and see how this first day of roundtables goes, and see if it merits comments," Zaneis says. The FTC has scheduled the first of three day-long privacy discussions for Dec. 7.
The privacy advocates argue that Web companies are not providing consumers with enough power over the collection and use of their data. "Consumers are faced with a largely invisible and all-encompassing data collection apparatus, often operating automatically, that makes decisions about the prices and services they are offered," the groups write. They add that Web users "need to know, and should have the right to approve, the marketing segments into which they have been placed."
The advocacy groups also say the industry's new self-regulatory principles -- unveiled in July by the American Association of Advertising Agencies, Association of National Advertisers, Council of Better Business Bureaus, Direct Marketing Association, and the Interactive Advertising Bureau -- do not adequately protect consumers.
Among other criticisms, the privacy groups allege that the ad associations' new guidelines don't sufficiently guard sensitive data. The principles require companies to obtain consumers' consent to collect such data, but define it as financial account numbers, social security numbers, pharmaceutical prescriptions, or medical records about a specific individual. The privacy groups argue that the industry's definition of "sensitive" is far too narrow.
The digital rights organization Center for Democracy & Technology also filed comments that were critical of current online behavioral-targeting policies. The CDT called on the FTC to endorse broad fair information collection practices.
The FTC's current self-regulatory guidelines emphasize that companies should notify users about online tracking and targeting and allow them to opt out. But the CDT says that notice-and-consent regime doesn't go far enough because it only allows consumers to make a choice at the time of collection. "Long after data is collected, it lives in a Wild West of shared and sold personal profiles and databases that give consumers no control over how their identities will be tracked and used," the group wrote.
The CDT also expressed skepticism about whether industry self-regulation can protect consumers. "A self-regulatory system that relies on trade associations to provide implementation and accountability guidelines is clearly incomplete: the activities of non-members will remain unregulated," the organization argued.
Three years ago, the Center for Digital Democracy and U.S. Public Interest Group filed a petition with the FTC that kicked off the current debate about whether behavioral targeting compromises users' privacy. In January, they filed papers with the FTC alleging that mobile companies were using "unfair and deceptive" behavioral targeting strategies.
Thursday, November 5, 2009
Tuesday, November 3, 2009
Net Neutrality Proponents Warn FCC Of Loopholes In Regulations
Leading net neutrality proponents are warning that the Federal Communications Commission's proposed net neutrality rules could create significant loopholes for Internet service providers.
The new regulations codify the four principles set out in a 2005 Internet policy statement, which provide that Web users are entitled to access all lawful content, applications and services, and that they can attach devices to the network. The FCC also proposed codifying two additional principles -- nondiscrimination and transparency.
But there are two major ambiguities in the proposed rules, according to advocates. One is that the FCC hasn't clarified what type of activity it will consider discriminatory. The other is that the FCC carves out an exception to all rules for reasonable network management practices, yet doesn't precisely define such practices.
Five law professors sent the FCC a letter on Monday stating that those ambiguities "appear likely to provide particularly generous opportunities to try to work around the Commission's efforts." The letter was signed by Yale's Jack Balkin, South Texas College's John Blevins, University of Louisville's Jim Chen, Harvard's Larry Lessig, Stanford's Barbara van Schewick and Columbia's Tim Wu.
"We think it is surprising that the FCC would not want to provide some guidance on the applicable standard for reasonable network management, lest, as a law professor would say, the exception swallow the rule," the academics wrote.
Broadband advocacy group Free Press raised similar concerns in policy brief filed Tuesday. "Since all six principles contained in the proposed open Internet rule are subject to 'reasonable network management,' a broadly permissive exemption standard would threaten to swallow the rules," the group wrote.
The advocates also asked the FCC to clarify the type of conduct it considers "discriminatory." The notice of proposed rulemaking says that nondiscriminatory means "that a broadband Internet access service provider may not charge a content, application, or service provider for enhanced or prioritized access."
But Free Press and the law professors argue that charging for enhanced access is only one illustration of discriminatory behavior and are asking the FCC to state that other forms of discrimination would be illegal.
Marvin Ammori, a University of Nebraska law school professor who advises Free Press, tells Online Media Daily that it's important for the FCC to define its terms so the public can weigh in on the proposals.
"Ambiguities around key terms like reasonable network management make it difficult to know how strong the rules will actually be," he says.
The new regulations codify the four principles set out in a 2005 Internet policy statement, which provide that Web users are entitled to access all lawful content, applications and services, and that they can attach devices to the network. The FCC also proposed codifying two additional principles -- nondiscrimination and transparency.
But there are two major ambiguities in the proposed rules, according to advocates. One is that the FCC hasn't clarified what type of activity it will consider discriminatory. The other is that the FCC carves out an exception to all rules for reasonable network management practices, yet doesn't precisely define such practices.
Five law professors sent the FCC a letter on Monday stating that those ambiguities "appear likely to provide particularly generous opportunities to try to work around the Commission's efforts." The letter was signed by Yale's Jack Balkin, South Texas College's John Blevins, University of Louisville's Jim Chen, Harvard's Larry Lessig, Stanford's Barbara van Schewick and Columbia's Tim Wu.
"We think it is surprising that the FCC would not want to provide some guidance on the applicable standard for reasonable network management, lest, as a law professor would say, the exception swallow the rule," the academics wrote.
Broadband advocacy group Free Press raised similar concerns in policy brief filed Tuesday. "Since all six principles contained in the proposed open Internet rule are subject to 'reasonable network management,' a broadly permissive exemption standard would threaten to swallow the rules," the group wrote.
The advocates also asked the FCC to clarify the type of conduct it considers "discriminatory." The notice of proposed rulemaking says that nondiscriminatory means "that a broadband Internet access service provider may not charge a content, application, or service provider for enhanced or prioritized access."
But Free Press and the law professors argue that charging for enhanced access is only one illustration of discriminatory behavior and are asking the FCC to state that other forms of discrimination would be illegal.
Marvin Ammori, a University of Nebraska law school professor who advises Free Press, tells Online Media Daily that it's important for the FCC to define its terms so the public can weigh in on the proposals.
"Ambiguities around key terms like reasonable network management make it difficult to know how strong the rules will actually be," he says.
IAB Lobbies Against Proposal To Expand FTC's Power
The online ad industry is sounding the alarm about a new bill currently pending in Congress that would expand the Federal Trade Commission's power by making it easier for the agency to create rules and to bring civil lawsuits.
"There are reasons why there have been limits on the FTC, and we want to see those limits preserved," says Mike Zaneis, vice president for public policy at the Interactive Ad Bureau. "This is legislative priority No. 1 for our industry."
The Consumer Financial Protection Agency Act (H.R. 3126) cleared the House Energy and Commerce committee last week and now moves to the full House, where it's expected to pass. But the proposal's fate in the Senate is uncertain.
The current House version creates a new consumer protection commission while also beefing up the FTC's power in a few key ways. The bill removes administrative hurdles to the FTC's rulemaking ability, makes it easier for the agency to pursue civil litigation, and allows the FTC to target ad companies that aid and abet unfair practices.
These new powers are so significant that industry observers are already saying the bill would effectively make FTC Chair Jon Leibowitz an "Internet czar."
For his part, Leibowitz said in a statement to the energy and commerce committee that the "modest new authority" given to the commission "will help ensure that we have the tools necessary to fight fraud and go after those who perpetrate it."
Industry executives say that the existing curbs on rulemaking ability have contributed to the FTC's decision to support industry self-regulation of matters like online behavioral targeting and privacy.
"We'd hate to see them move directly to government regulation in all of these areas, but that's the prospect that we're facing if this is enacted," Zaneis says.
Currently, the FTC can only make rules aimed at curbing a prevalent practice. But the bill would remove that restriction, allowing the agency to enact regulations as long as there's a rational reason to believe the rule would stem from unfair and deceptive conduct. The bill also would provide for a faster rulemaking procedure.
A host of consumer groups and privacy advocates, including the American Academy of Child and Adolescent Psychiatry, Consumers Union, Center for Digital Democracy and the Electronic Frontier Foundation, are advocating in favor of the bill. They argue that the current restrictions on the FTC hinder its effectiveness.
"We believe that the FTC must play a more proactive role addressing critical consumer concerns, including privacy, online marketing, and food advertising to young people," the groups wrote last week to the leaders of the House Energy and Commerce Committee.
The bill also would enable the FTC to pursue civil actions without prior review by the Department of Justice. In addition, the measure would let the FTC impose civil penalties without prior rules or orders.
A provision that would allow the FTC to prosecute companies that aid or abet an unfair act could be especially damaging to marketers and intermediaries, says the Association of National Advertisers. "This would have serious implications for advertising agencies, media companies and other companies that play any role in the communication/sale/delivery process," ANA Executive Vice President Dan Jaffe said last week in a letter to lawmakers.
Observers say the full House will probably pass the bill by the end of the calendar year. The proposal is expected to move more slowly in the Senate, where lawmakers are still hammering out a draft of the bill.
"There are reasons why there have been limits on the FTC, and we want to see those limits preserved," says Mike Zaneis, vice president for public policy at the Interactive Ad Bureau. "This is legislative priority No. 1 for our industry."
The Consumer Financial Protection Agency Act (H.R. 3126) cleared the House Energy and Commerce committee last week and now moves to the full House, where it's expected to pass. But the proposal's fate in the Senate is uncertain.
The current House version creates a new consumer protection commission while also beefing up the FTC's power in a few key ways. The bill removes administrative hurdles to the FTC's rulemaking ability, makes it easier for the agency to pursue civil litigation, and allows the FTC to target ad companies that aid and abet unfair practices.
These new powers are so significant that industry observers are already saying the bill would effectively make FTC Chair Jon Leibowitz an "Internet czar."
For his part, Leibowitz said in a statement to the energy and commerce committee that the "modest new authority" given to the commission "will help ensure that we have the tools necessary to fight fraud and go after those who perpetrate it."
Industry executives say that the existing curbs on rulemaking ability have contributed to the FTC's decision to support industry self-regulation of matters like online behavioral targeting and privacy.
"We'd hate to see them move directly to government regulation in all of these areas, but that's the prospect that we're facing if this is enacted," Zaneis says.
Currently, the FTC can only make rules aimed at curbing a prevalent practice. But the bill would remove that restriction, allowing the agency to enact regulations as long as there's a rational reason to believe the rule would stem from unfair and deceptive conduct. The bill also would provide for a faster rulemaking procedure.
A host of consumer groups and privacy advocates, including the American Academy of Child and Adolescent Psychiatry, Consumers Union, Center for Digital Democracy and the Electronic Frontier Foundation, are advocating in favor of the bill. They argue that the current restrictions on the FTC hinder its effectiveness.
"We believe that the FTC must play a more proactive role addressing critical consumer concerns, including privacy, online marketing, and food advertising to young people," the groups wrote last week to the leaders of the House Energy and Commerce Committee.
The bill also would enable the FTC to pursue civil actions without prior review by the Department of Justice. In addition, the measure would let the FTC impose civil penalties without prior rules or orders.
A provision that would allow the FTC to prosecute companies that aid or abet an unfair act could be especially damaging to marketers and intermediaries, says the Association of National Advertisers. "This would have serious implications for advertising agencies, media companies and other companies that play any role in the communication/sale/delivery process," ANA Executive Vice President Dan Jaffe said last week in a letter to lawmakers.
Observers say the full House will probably pass the bill by the end of the calendar year. The proposal is expected to move more slowly in the Senate, where lawmakers are still hammering out a draft of the bill.
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