Shhhhh! We can’t announce that Thomas Grace at AT&T correctly answered the November 2007 question. He knew the interesting film coincidence in which Mai Ling, who played Mei-Lei, a stewardess who happened to be a spy on a plane in the 1964 James Bond motion picture “Goldfinger,” also played a stewardess and again happened to be a spy on a plane, in the 1969 movie, “The Chairman,” starring Gregory Peck and Anne Heywood.
“Therein is the most dangerous power of the prosecutor: that he will pick people that he thinks he should get, rather than pick cases that need to be prosecuted. With the law books filled with a great assortment of crimes, a prosecutor stands a fair chance of finding at least a technical violation of some act on the part of almost anyone.”
Facebook has built a highly popular business, but it turns out making that popularity profitable appears to depend, in large measure, on advertising. Sound familiar? So Facebook announced a new program, Beacon, an online tracking tool. No, online tracking certainly isn’t new: companies track where your browser has been and your online activity, and routinely serve up ads based on “preferences”—where you have been, what you look for, and what you purchase. But that takes place behind the scenes—you just see the results: relevant, targeted advertising.
Facebook has taken online tracking one step farther: Beacon sends messages telling your Facebook buddies what you are buying and, in some cases, what you are doing. So don’t plan that surprise trip to Puerto Rico just yet—buying a ticket might ruin the surprise. In fact, don’t come back from the trip and rate the hotel—your friends who weren’t invited will know you’ve been there.
Facebook faced criticism last year when its “News Feed” function came under fire. Media and industry pundits and Facebook executives note often schizophrenic and hypocritical marketplace attitudes. Indeed, there is some irony to be considered when the generation that posts profiles, adding everything from drinking, sexual preferences, and religious affiliations, to family videos, in blatantly public web-spaces, complains about privacy. But consumers still distinguish between their choice to share, and allowing a host to decide what, when, where and how to share information about them, or whether to characterize activities as some form of an “endorsement without consent” to their friends.
As usual, privacy and consumer advocacy groups were poised to file complaints with the FTC, right on the heels of investigations already launched by several Attorneys General into Facebook’s privacy practices. The New York Attorney General has issued a subpoena to Facebook for copies of complaints about “inappropriate solicitation of underage users and inappropriate content on the site.” As innovators have learned, success shines a spotlight that creates a glow—and discloses warts; let’s see if they can keep Facebook blemish-free.
Webkinz? Barbie Girls? Be-Bratz? Club Penguin? Never heard of these? Your 6-year old has. At a time when advertising and marketing to children is in the cross-hairs of regulatory agencies, virtual worlds are discovering that imagination can run wild in an environment where children—some as young as 5 or 6 years old—can shop, adopt pets, and play dress-up.
Remember virtual pets? You could purchase a small, self-contained computer (of course it wasn’t marketed as a computer, but as a digital companion) with names like Tamagotchi or Giga Pets—often with a tiny display that had the “pet’s” image.
Small buttons on the outside of the casing allowed you to feed your pet or wash it, and there were even pets that could interact with other pets (e.g., Digimon). If you didn’t treat your pet right it might even die!
Now toys purchased at retail stores—toys for young children—are showing up with flash drives which, when plugged into a computer USB port, unlock features and hold the keys to virtual worlds where children can play—in dollhouses, shopping malls, with pets and characters. Building brand awareness is critical for marketing-driven companies, and building brand awareness in young children who may carry the imprints into their teenage and adult lives…well, you know…. Next up, potty-training your virtual baby. Stay tuned.
Years ago, a number of companies hoped that by offering to simplify financial record-keeping and collect your financial information in one place, consumers would find it easier than trying to keep track of all of the numbers, codes and IDs they have to contend with in the real world. The concept fizzled, primarily because there was resistance to giving one website all the information—putting all your nest eggs, so to speak, in one basket. Now, some companies are hoping to revive the concept, this time with the lure of education, advertising and sponsorship.
Although the basic idea remains, the new aggregation model uses sponsored links—recommendations based on an analysis of consumer data and financial information—all geared to educating consumers about the availability of financial products and services. Just as search engines accumulate information about browsing—to prioritize and serve advertising believed to be of higher value to the individual—these new sites use the same model to recommend financial services. If you use a credit card to purchase airline tickets, the site might recommend or display an advertisement for an affinity credit card tied to an air carrier or one which offers points for your purchases. Use an overdraft line of credit for your checking account? You might see an advertisement or recommendation to consider a home equity line of credit to potentially lower your tax bill while you borrow.
While advertising-supported revenue models may have greater appeal from an economic viewpoint and may attract financial institution sponsors and advertisers, these sites still have to overcome consumer discomfort with making all—or a significant portion—of their nonpublic financial information available at a single point of aggregation. With the identity theft, data breach and privacy issues front and center in the past few years, one has to wonder if the power of advertising can overcome that anxiety.
If you don’t know who said that or in what motion picture, stop reading and go to the next article. California Governor Schwarzenegger has just signed a bill specifically aimed at altering the future results of fact patterns analogous to two recent court decisions relating to the licensing of publicity rights for deceased celebrities. The two cases—one in New York and the other in California—dealt with a challenge to the right to license the use of Marilyn Monroe’s name and likeness for commercial purposes. The rulings stated that because at the time of her death neither California nor New York had a law allowing publicity rights to survive the death of a celebrity, and because those rights were not specifically bequeathed by Marilyn Monroe, those rights could not be construed as part of the “rest, residue and remainder” of her estate, and consequently not be part of the rights available to her estate (or subsequent licensors like the plaintiffs in these cases).
The legislation just signed by Gov. Schwarzenegger makes retroactive to before Jan. 1, 1985, the right of a celebrity’s estate to construe publicity rights as part of a “rest, residue and remainder” as a bequest in a celebrity’s will. January 1, 1985 was the effective date of the current California law allowing publicity rights to survive the death of a celebrity. Unfortunately, New York still does not have a law allowing publicity rights to survive the death of the celebrity.
Potentially signaling tougher enforcement initiatives ahead, New York recently enacted a law that gives consumers who shop online, essentially the same types of consumer protections available when buying over the phone or through the mail. New York’s law that now applies to sales over the Internet means that merchants must reasonably expect to be able to ship the goods ordered within 30 days or the order can’t be accepted; merchants who use a post office box or other fulfillment mail address must display (prominently) the company’s name and physical street address; merchants must allow a consumer to cancel any order that doesn’t actually ship within 30 days and either obtain a refund or pick substitute merchandise; the merchant must clearly detail the conditions under which the consumer will be entitled to a refund; and the merchant must keep records of consumer complaints that deal with failures to ship or to provide advertised goods and services.
Recently lawyers have begun to debate the question of just how much control advertisers can exert when paying for product placements or branded entertainment before the line between First Amendment expression by the creative staff putting together the program and the financial subsidies from advertisers is crossed. Now, the Ninth Circuit has dealt with a similar question relating to the immunity that interactive computer service providers have typically enjoyed under the Communications Decency Act (the “CDA”). The CDA insulates service providers from liability so long as the service provider remains a publisher of information and content of others (there are exceptions, so the immunity is not blanket and you should always consult legal advice for specifics that apply to your situation). That said, a company that operates an online web service that specializes in matching roommates based on their preferences has been held in violation of the Fair Housing Act because a questionnaire put together by the company asks for certain demographic information that, when posted on the website, could be used by users and site visitors to discriminate against others. The company, Roommates.com, asked users to disclose information, among other things, about roommate preferences such as age, sex, children, etc. The Ninth Circuit held that although Roommates.com was immune as long as it was simply enabling the distribution or display of information provided by its members, when it became an information content provider, it lost immunity with respect to that activity and information. And by putting together the questionnaires and soliciting their preferences in response, Roommates.com was not simply posting content authored by users, but rather was eliciting specific information that could be abused and that might or might not have been voluntarily posted or disclosed absent the questionnaires.
Hmmmm…user profiles, play lists, segmented marketing, asking consumers to participate in promotions…this is an interesting test of the limitations of the CDA to protect and insulate interactive online service providers from liability. As social networks, virtual worlds and other digital arenas that don’t simply enable but also solicit or encourage certain information to be provided, and as web services become more targeted, focused and segmented to match consumer preferences, the immunity is likely to be tested further. Stay tuned.
Read “After a Data Breach: Navigating the tangle of state notification laws can be exasperating—and costly” an Oct. 29, 2007 article by Jennifer McAdams, posted on ComputerWorld. I was interviewed and quoted in the article. I have helped numerous companies navigate the tangled web of state laws and regulations that have appeared in the past few years, and the ATM Law group tracks and keeps up-to-date on developments in state and federal law concerning this important issue.
User-generated content (“UGC”) on the Web is serious business and becoming more so by the day. While many know UGC as a challenge to IP rights, eMarketer is predicting advertising spending on social networking, photo sharing, gaming and amateur video websites to reach $4.3 billion by 2011—compared with the $450 million in advertising revenue they reported in 2006. That means companies are going to have to figure out how to differentiate themselves and maintain positioning in the face of increased competition. The ease of creation, coupled with technology—whether embedded players, gadgets and widgets, or more sophisticated interactive game sites—means that millions of users can create, post and “snag” user-generated content, and the trend shows no sign of diminishing. Social networking companies are significant sources of advertising revenue and are growing targets for investors seeking to build market share or obtain a piece of the transactional pie. Increasingly, mobile marketing and messaging companies are building the wireless and global brands, and are increasingly monetizing their social networking and messaging capabilities.
Legislators and regulators are noticing the exuberant success and popularity these services enjoy and, with a demographic skewed to a younger portion of the population, there is no question these services, the advertising they carry, and the content available on their sites, will continue to draw scrutiny in the months and years ahead. Rimon represents social networking companies, advertising agencies, and advertisers and media companies around the world. When you think of legal issues surrounding user-generated content—standards, copyright protection, digital rights management, filtering, viral or buzz marketing and so much more—please think of our Advertising Technology & Media Law practice group.