RECENT DEVELOPMENTS IN DIGITAL MEDIA
ADVERTISING LAW: Death of the Banner Ad
Steve Combs, SVP Legal
Sharecare, Inc.
Atlanta, GA
Steve’s Bio

Steve Combs is SVP Legal of Sharecare, Inc. (www.sharecare.com). Created by Jeff
Arnold and Dr. Mehmet Oz in partnership with Harpo Productions, Sony Pictures
Television and Discovery Communications, Sharecare allows people to ask, learn
and act upon questions of health and wellness, creating an active community
where knowledge is shared and put into practice.

Steve also serves as counsel to Forbes Travel Guide (www.forbestravelguide.com)
including its expert-anchored, socially-enabled online platform. Since 1958, Forbes
Travel Guide -- originator of the Five Star Ratings.

He was formerly Director, Legal at HowStuffWorks.com, a subsidiary of Discovery
Communications. Steve was an attorney at Morris, Manning & Martin, LLP in the
firm’s Corporate Technology Group. He was also Corporate Counsel at Home
Depot and HomeDepot.com for IT and e-commerce matters. He is a board
member of Surfrider Foundation, a non-profit dedicated to the protections and
enjoyment of oceans waves and beaches.

Steve has published various articles on topics such as leveraging intellectual
property assets, digital media, social media, and Internet advertising. He has a law
degree from Emory University and obtained his Bachelor of Science in Finance at
Florida State University.
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What is Digital Media Advertising?
Using websites, mobile applications, and other online services to deliver
promotional marketing messages to consumers.

Email marketing

Text message marketing

Search engine marketing (SEM)

Social media marketing

Display advertising/web banners

Video advertising

Mobile advertising

Native advertising
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Digital Media Advertising Industry
Digital media advertising remains strong with global revenue reaching
$116 billion for 2013, a 16% annual increase.

Mobile advertising currently comprises 11% of global ad revenue dollars with a
47% increase.

The number of global Internet users is still increasing albeit at a slower rate of less
than 10%.

Most importantly, the manner in which users are accessing content is increasing
significantly: Smartphones (+20%), Tablets (+52%) , Mobile Data Traffic (+81%)

Source: Internet Trends 2014 – Code Conference May 28, 2014)
(http://www.kpcb.com/internet-trends)
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Who are the Parties?
Various parties are involved in the delivery of digital media advertising to
consumers.

Media Companies/Publishers who integrate advertisements into its online content

Advertisers who provide the advertisements to be displayed on the publisher's
content

Advertising Agencies who help generate and place the ad copy

Ad Servers and Other Technology Providers who use technology to deliver and
track the ads
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Interactive Advertising Bureau (IAB) Guidelines

Ad Standards & Creative Guidelines

Native Advertising

Ad Verification

Online Ad Effectiveness Best Practices

Data

Online Traffic Fraud

Digital Video

Operational Efficiency Best Practices

Email & Lead Generation


Games Advertising
Platform Overviews: Status Reports
on Emerging Platforms

Interactive Television

Programmatic

Local Search Whitepaper

Quality Assurance Guidelines
Initiative

Measurement Guidelines

Real-Time Bidding

Mobile

Terms & Conditions

More info at
http://www.iab.net/guidelines
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V3.0 and V2.0 of the IAB/4A Terms
Significant portions of the following sections were updated in 2009 for
Version 3.0

Section XII: Non-disclosure, Data Usage and Ownership, Privacy and Laws:
Entirely new data usage language has been developed for Media Companies,
Agencies, and Advertisers – this is the section where the most new material has
been added so pay close attention.

Section II: Ad Placement and Positioning: Standard editorial adjacency language
has been developed to handle most Advertisers’ concerns and specific language
regarding UGC site/page requirements has been added.

Section III: Payment and Payment Liability: Among other things, invoicing
requirements have been changed and proof of performance is no longer required
unless explicitly requested.

Section V: Cancellation and Termination: Cancellation terms have been rewritten
to include different cancellation periods for different types of inventory and
services (guaranteed, performance, pre-launch development costs, etc).
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V3.0 and V2.0 of the IAB/4A Terms

Section IX: Ad Materials: The late creative policy has been updated to something
that will hopefully be easier for Media Companies and Agencies to voluntarily
agree to.

Section X: Indemnification: Indemnification language has been reorganized and
updated.

Section XIII: Third Party Ad Serving and Tracking: Third party ad serving, tracking,
and billing language outlines conditions in which, if satisfied, Agency third-party
numbers can be used by default for billing

A Definitions section has been added at the front of document.

The IAB published an Education Guide is available to explain the key provisions.
(http://www.iab.net/media/file/IAB_AAAAs_v_3_0_Education_20091215_FINAL.p
df)

Insertion Orders and Addenda: Insertion Orders and Addenda can fundamentally
alter a deal including with respect to payment terms, cancellation rights, and
adherence to additional privacy standards.
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Native Advertising
As consumers consume content in more varied ways, native advertising is
becoming an increasingly important category .

Online advertising method in which the advertiser attempts to gain attention by
providing content in the context of the user's experience.

Formats match both the form and function of the user experience in which they
are placed.

Intent is to make the paid advertising feel less intrusive and thus increase the
likelihood users will click on it.
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Native Advertising Units
The IAB identifies six types of native advertising units

In-Feed Units (e.g., Facebook “Sponsored Posts” in your Feed

Paid Search Units (e.g., Google “Sponsored Ads)

Recommendation Widgets (e.g., Outbrain “From Around The Web”)

Promoted Listings (e.g., Amazon “Ads from External Websites”)

In-Ad With Native Element Units (EA “Game Units”)

Custom/Can’t Be Contained (e.g., Pandora)
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Online Behavioral Advertising
What is Online Behavioral Advertising?

Online behavioral advertising means the tracking of a consumer’s online activities
over time − 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. (http://www.ftc.gov/reports/federal-tradecommission-staff-report-self-regulatory-principles-online-behavioral)

“Online behavioral advertising” is also sometimes called "interest-based
advertising.“

Behavior is tracked and data collected by the cookies, pixels, or other technology
using a consumer’s browser or mobile device.

Online behavioral advertising is NOT
– First-party advertising-where no data is shared with third parties
– Contextual advertising-where advertisements are based on a single visit or search
query
– First-party data collection and analysis-for website optimization/analytics
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FTC Guidance on Online Behavioral Advertising
There is no federal law statute online behavioral advertising. The FTC has
issued staff reports and guidance which are summarized below.

FTC’s Self-Regulatory Principles for Online Behavioral Advertising

In February 2009. The FTC released Self-Regulatory Principles for Online Behavioral
Advertising (www.ftc.gov/reports/federal-trade-commission-staff-report-selfregulatory-principles-online-behavioral). The 2009 FTC Report set forth key
principles of online behavioral adverting: transparency, consumer control and
consent.

FTC’s Mobile Privacy Disclosures: Building Trust Through Transparency

In February 2012, the FTC issued Mobile Privacy Disclosures: Building Trust
Through Transparency http://www.ftc.gov/reports/mobile-privacy-disclosuresbuilding-trust-through-transparency-federal-trade-commission). The 2012 FTC
Report called for notice, choice and more transparency for the mobile
environment.
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FTC Guidance on Online Behavioral Advertising

FTC’s Protecting Consumer Privacy in an Era of Rapid Change, Recommendations
for Businesses and Policymakers

In March 2012, the FTC issued Protecting Consumer Privacy in an Era of Rapid
Change, Recommendations for Businesses and Policymakers
(http://www.ftc.gov/reports/protecting-consumer-privacy-era-rapid-changerecommendations-businesses-policymakers). The 2012 FTC Report (based on prior
2010 preliminary report) details a framework for privacy by design, simplified
choice, greater transparency, and a Do Not Track mechanism. The FTC also
describes using “just-in-time” disclosures for space-constrained mobile devices at
the time of download or at collection or transmission of data.
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Industry Self-Regulatory Frameworks for OBA
In response to FTC guidance on online behavioral advertising, various
trade groups issued their own principles and frameworks

Digital Advertising Alliance (DAA) Self-Regulatory Principles for Online Behavioral
Advertising

In July 2009, the DAA, a network of media companies and marketing trade
associations released its own Self-Regulatory Principles for Online Behavioral
Advertising having the same name as the 2009 FTC Report
(http://www.aboutads.info/obaprinciples).

The Material Changes Principle calls for obtaining consumer consent before a
Material Change is made to an entity's Online Behavioral Advertising data
collection and use policies unless that change will result in less collection or use of
data.

The Sensitive Data Principle recognizes that data collected from children and used
for online behavioral advertising merits heightened protection, and requires
parental consent for behavioral advertising to consumers known to be under 13 on
child-directed Web sites. This Principle also provides heightened protections to
certain health and financial data when attributable to a specific individual.
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DAA Implementation Guide
In October 2010, the DAA published an Implementation Guide as its self
regulatory program.

The DAA Program corresponds to the FTC guidance and recommendations in the
2009 FTC Staff Report. (http://www.aboutads.info/resources)

The Blue Pointy Icon

What’s the blue pointy thing that’s all over the Internet?

The DAA Program introduces the “Advertising Option” icon along with the
approved words: ‘Why did I get this ad?', 'Interest Based Ads', or 'Ad Choices'. The
icon indicates that indicates that the advertising is covered by the self regulatory
program, and by clicking on it consumers will be able to link to a clear disclosure
statement regarding the data collection and use practices associated with the ad,
as well as an easy-to-use opt-out mechanism.
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Other DAA Principles

DAA’s Self-Regulatory Principles for Multi-Site Data

In November 2011, the DAA published the Self-Regulatory Principles for Multi-Site
Data (http://www.aboutads.info/msdprinciples) to standards governing the
collection and use of data collected from a particular computer or device regarding
Web viewing over time and across non-affiliated Websites.

DAA’s Application of Self-Regulatory Principles to the Mobile Environment

In July 2013, the DAA published Application of Self-Regulatory Principles to the
Mobile Environment (http://www.aboutads.info/principles) to provide guidance
on collection and use of data in the mobile Web site and application environment
as it relates to the DAA OBA Principles and the Multi Site Data.

The online home of the DAA’s Self-Regulatory Program for Online Behavioral
Advertising is at http://www.aboutads.info.
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Network Advertisers Initiative (NAI)
NAI members include ad networks, exchanges, platforms, creative optimization
firms, yield optimization firms, sharing utilities and other technology providers.

Network Advertisers Initiative (NAI) Code of Conduct, a set of self-regulatory
principles for collection and use of data for interest-based advertising.

In 2013, the Network Advertising Initiative (http://www.networkadvertising.org)
published a new version of the NAI Code of Conduct
(http://www.networkadvertising.org/code-enforcement/code).

The 2013 Code updates are directed at the more complex online advertising eco
system, technology updates, and regulatory changes such as enhanced notice
requirements.

The Code requires (i) transparency and notice, including an opt-mechanism to
disallow interest based advertising; (ii) user control including with respect to
merging data; collection of geolocation data; and use of financial, health, and
other sensitive data; (iii) use limitation, such as employment, credit, healthcare,
and insurance eligibility information; (iv) transfer restrictions with respect to
personal data and merging data; and (v) data access for users, quality systems, and
security of data.
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NAI Requirements
NAI members must meet various requirements in addition, to the opt-out
mechanism,

NAI members are required to represent compliance with the Code in their publicly
available privacy policy and undergo annual review for compliance with the Code.

The application and enforcement of the NAI self-regulatory principles across
mobile devices (including mobile web browsers and mobile applications) are
scheduled to begin in 2015. The NAI Mobile Application Code is limited to “cross
app” advertising and review process.

The NAI opt out tool is hosted at http://www.networkadvertising.org/choices/ for
purposes of allowing consumers to "opt out" of the interest-based advertising
delivered by NAI members.
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Other Digital Media Advertising Laws

FTC’s Guides Concerning the Use of Endorsements and Testimonials in
Advertising

The FTC revised its Endorsement Guides in October 2009 to keep them up-to-date
with current marketing techniques, such as blogging and word-of-mouth
advertising. Marketers who are compensated to promote or review a product
should disclose it. (http://www.ftc.gov/policy/federal-register-notices/guidesconcerning-use-endorsements-and-testimonials-advertising-16 )

California Do Not Track Law

Effective January 1, 2013, the California's Online Privacy Protection Act (CalOPPA)
(http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB3
70 ) requires operators of websites, mobile applications, and online services that
collect personally identifiable information about consumers to disclosed their “do
not track” policies and procedures. The new law does not require the operators to
honor do not track requests, but it requires operators to inform consumers if they
disclose consumer data to third parties.
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California Do Not Track Law

The responses to California’s Do Not Track Law fall into the following categories:
– Parties who follow the Do Not Track browser signal. See Twitter.com and others at
http://donottrack.us/implementations
– Parties who do not follow the Do Not Track signal because there is no clear industry
guidance on how to respond to such signals. See AT&T Privacy Policy at
http://www.att.com/gen/privacy-policy?pid=2506
– Parties who do not follow the Do Not Track signal because does they do not track users
over time and across third party websites to provide targeted advertising. See Apple’s
California Do Not Track Notice at http://www.apple.com/legal/privacy/california-dnt/
– Parties who do not have specific “Do Not Track” language in their privacy policies. As
of a May 2014, a survey of Top 100 Websites indicates 67 websites did not have “Do
Not Track” language in their privacy policies.
– See Athena Privacy California Online Privacy Protection Act--Do Not Track Survey at
http://www.athenaprivacy.com/cookiesandcookieaudits/caloppadntsurvey.html

The law includes penalties of up to $2,500 per violation which for apps could be
measured in app downloads. However, a violation of the law occurs, “only if the
operator fails to post its policy within 30 days after being notified of
noncompliance.”
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FTC Dot Com Disclosures

In March 2013, the Federal Trade Commission updated its staff guidance known as
the “Dot Com Disclosures.”
(http://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-staffrevises-online-advertising-disclosure-guidelines/130312dotcomdisclosures.pdf )
The Commission originally issued such guidance in 2000 to explain how to make
online disclosures clear and conspicuous and avoid deception. The 2013 guidance
addresses new issues related to smartphones and social media marketing.

The 2000 guidelines defined proximity as “near, and when possible, on the same
screen” (i.e., no scrolling required). The 2013 guidance indicates disclosures
should be “as close as possible” to the relevant claim recognizing that smaller
screens on mobile devices and in social media may require other approaches. The
new guidance provides examples disclosures to assist advertisers in these new
areas.
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Search Engine Guidance

On June 25, 2013, the Commission sent letters to search engines with updated
guidance emphasizes the need for visual cues, labels, or other techniques to
effectively identify advertisements in search engine results.
(http://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-consumerprotection-staff-updates-agencys-guidance-search-engine-industryon-needdistinguish/130625searchenginegeneralletter.pdf) Such guidance was issued in
response to concerns that paid search results were becoming increasingly less
distinguishable as advertising.

The Federal Trade Commission had previously issued guidance to search engines
on distinguishing paid search results and other forms of advertising from natural
search results. http://www.ftc.gov/enforcement/cases-proceedings/closingletters/commercial-alert-response-letter).

The letters acknowledge that “social media, mobile apps, voice assistants on
mobile devices, and specialized search results that are integrated into general
search results offer consumers new ways of getting information.” The letters
advise that such forms of advertising must still be clearly distinguishable from
natural search results.
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FDA Social Media Guidance

In June 2014, the Food and Drug Administration published draft social media
guidelines for pharmaceutical companies and medical device manufacturers. The
FDA issued two documents for public comment:

Internet/Social Media Platforms with Character Space Limitations—Presenting
Risk and Benefit Information for Prescription Drugs and Medical Devices

Internet/Social Media Platforms: Correcting Independent Third-Party
Misinformation About Prescription Drugs and Medical Devices

Available at
http://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacc
o/CDER/ucm397791.htm

The guidance emphasizes that despite limited space, risk information must be
adequately disclosed to consumers. Sample tweet for a fictional drug NoFocus:
“NoFocus for mild to moderate memory loss – may cause seizures in patients with
a seizure disorder www.nofocus.com/risk.”

The FDA draft guidance clarifies FDA's policies on the correction of misinformation
created or disseminated by independent third parties on the Internet or through
social media platforms.
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Questions
 Steve Combs
 steve@combsventures.com
 http://linkedin.com/in/scombs
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