Yesterday evening, Rimon and Boyden Executive Search Agencies co-sponsored a seminar in which Douglas J. Wood, head of Rimon’s Media & Entertainment Industry Group, joined by Sarah Needleman from The Wall Street Journal, and Kathy Ewing, assistant general counsel at Benjamin Moore, discussed the legal, social and economic implications of the social media and social networking revolution.

Friday the 13th notwithstanding – it’s the third one this year and, for you Useless-But-Compelling-Facts fans, the most any single year can have – today is your lucky day. Even if you missed it, the seminar can be downloaded right here: “Making Sense of Social Media.” And, in keeping with our triskaidekaphobic theme, Legal Bytes is proud to present a double whammy.

Simultaneously with this first-in-a-series of seminars, we have released a groundbreaking white paper entitled Network Interference: A Legal Guide to the Commercial Risks and Rewards of the Social Media Phenomenon. The white paper, which you can also download by clicking the linked title above, was compiled by Stacy Marcus and edited by Douglas J. Wood (head of Rimon’s Media & Entertainment Industry Group) and Joseph I. Rosenbaum, Chair of Rimon’s global Advertising Technology & Media Law Practice). The white paper includes contributions from our social media task force – numerous Rimon lawyers across many disciplines affected by or involved in the social media revolution.

We will be adding, supplementing and updating these materials with even more chapters and new information as this exciting area continues to dynamically unfold. Whether you are an active participant in the commercial world of social media or are confused by it, this is a must read.

Oh, and if you want to actually be social and sociable Joseph I. Rosenbaum and Anthony S. Traymore will be presenting MCLE accredited and customized variations of these Social Media Seminars in our offices in San Francisco, the morning of December 8th, in Palo Alto at mid-day the same day and in Century City the morning of December 9th – so be social and if you are on the West Coast and your schedule permits, mark your calendar and watch the Whatz Gnu? section of Legal Bytes over the next week for further information and links to an invitation and registration.

If you or your brand advertising and marketing professionals think social media is a fad, you need to GWI or start waving goodbye. The train is leaving the station without you. But, if you recognize that digital and web-based technology, coupled with new interactive social platforms and applications are changing the way we interact, communicate, work, play, learn and entertain; are changing the legal and socio-economic landscape; and, indeed, are changing how brands and companies engage with their customers, their employees, their suppliers and yes, their investors and shareholders: well, then OMG, you totally get it.

But even if you do, navigating the waters as legislators, regulators and courts struggle to enact or apply a legal framework originally intended for a world with easily defined borders and tangible products, can be daunting. That’s why Rimon has a core and virtual team of lawyers who have experience and can advise you and guide you through the uncertainties. Contact me, Joe Rosenbaum, or Douglas J. Wood, Stacy Marcus, or Anthony Traymore, or any of the Rimon lawyers with whom you regularly work. How can we help you?

Presumably, that’s why Willie Sutton robbed banks. So I ask you, somewhat rhetorically, why would anyone defraud advertisers on the Internet. Well, if you don’t know, please refer to the title—that’s what this note is about.

Remember click fraud? That’s the name for illicit activity in which someone or something (a computer executing macros, automated scripts, etc.) emulates the click-selection process on a web advertisement. Why is that fraud? Well for one thing, if you are counting the number of times visitors “select” your advertising, click fraud makes it seem like lots of browsers out there are attracted to your advertising. But it ain’t necessarily so. Even worse, if an advertiser is paying each time a visitor browses the ad—pay per click—that advertiser can pay a significant amount of money for eyeballs that simply aren’t there. While you might think some clever computer hackers or scammers were engaging in this activity for kick (something like a teenager joyriding with the family car), when you find out your competitors are retaining the services of others to engage in that activity, making your advertising seem exceedingly successful and driving up your cost of sales while they are merrily trimming their costs—well that’s why they call it fraud after all.

Solid investigative work, pattern detection, programs designed to sniff out repetitive or rapid clicks and Internet protocol and address tracking—1000 clicks per second from the same address—can’t completely prevent click fraud, but they can make it more difficult, make the insertion companies, publishers and networks more accountable for accurate metrics and payment mechanisms, and can sometimes even lead to prosecutions.

More recently, even more sophisticated schemes have arisen, including fake advertisements, appearing to be for a legitimate company, but that are actually a launching pad for malicious code—capable of phishing or denial of service attacks, or penetrating corporate firewalls to access company networks and systems.

Now this is not a particularly new problem. After Hyundai was victimized, earlier this year, Initiative, the Agency of Record for Hyundai, sent out letters to its business partners, presumably to its publishing and advertising network partners, stating “someone allegedly working for Hyundai, or working at other agencies, has contacted various sites requesting proposals, and have even run a short campaign,” and requesting that they be notified immediately if contact is made “from an e-mail domain address of ‘Hyundai-inc.com’.”

Publicis, one of the world’s largest advertising holding companies and the largest global network within the Publicis Groupe, headquartered in France, has also been warning publishing networks about these fake ads. This past Oct. 5, Digitas, Optimedia, MediaVest, Zenith, and Spark (each of them Publicis companies) sent letters to their media partners [PDF] alerting them to: “rogue software and malicious advertising that is being placed on websites by individuals pretending to represent legitimate insertion requests.”

A recent article in The Wall Street Journal noted yet another scam in web-based advertising: invisible ads. Agencies and media buyers are generally unable to audit banner campaigns when bought through ad networks and purchased on a CPM basis. Now imagine you are paying for ads based on web pages loaded, not clicks. Well, according to the article, Ben Edelman, an assistant professor at Harvard Business School who has been studying Internet advertising, has discovered that these “invisible” ads use computer programming code to make it appear as if the ads are where they are supposed to be. But when you point your browser to the web page where the ad is supposed to be, NOTHING IS VISIBLE. Notice I didn’t say that nothing was there. I said it wasn’t visible. BUT, if you are reading this, pay attention.  Take your cursor and highlight the entire blank space above right after the words “ad is supposed to be,” all the way through to “Notice I didn’t say,” the previously hidden text becomes visible.  You see, the letters are there, but they are in the same color as the background, so they appear invisible to the reader. A fairly old trick. Now imagine there’s a web-based advertisement on an invisible web page. The browser “sees” the page and acts as if that page is loaded and open—only you can’t see it.

The Wall Street Journal article notes that security experts at Symantec and McAfee, as well as at online verification and audit companies DoubleVerify and Anchor Intelligence, have confirmed the programming code used to create the invisible ads. Code that ultimately causes advertisers, including some major companies and brands, to pay for advertising that is “there,” but not to the user. Just like the text color coded to appear invisible against the background here, these programming codes—normally used to tell the computer how to display a web page when a browser loads the page—make the display (referred to as an “iframe”) invisible, so the user won’t actually see anything within that iframe. Because you can’t see any of the contents, scammers can create multiple invisible iframes, even on the same page. Mr. Edelman reported that he “opened a series of invisible pages on the visitor’s computer with as many as 46 ads”—none of which could be seen.

I suspect that when Congress and regulators refer to targeted advertising, they aren’t thinking about criminals who target legitimate advertisers and publishing networks and ultimately cost them (and you) money. But here at Legal Bytes, and among the lawyers at Rimon, we are! Need to know more about digital advertising, publishing networks, media and marketing online? Call Joe Rosenbaum, or any of the lawyers at Rimon you work with. We are happy to help.