Multi-Platform Comes to Ad Sales. At Last.

Summary:  The Tribune Company just launched Tribune 365 (www.trb365.com) that claims to provide integrated marketing campaigns—that is, ads across multiple platforms available within the Tribune media—newspapers (e.g., The Chicago Tribune and The Los Angeles Times), other print outlets and television stations.  In fact—and probably more important—it represents integrated ad sales:  one team to sell ad inventory across all of their platforms (and, with hope, others, as well).  We think this is a brilliant step—and long, long overdue.

The Details.

It is pretty straightforward—and both astonishing and understandable (OK, OK, so it’s a contradiction:  Call it a paradox)—that a major, and heavily indebted, media company has finally figured out one of their biggest assets:  multiple platforms.  The Tribune Company’s initiative is called Tribune 365 (www.trb365.com).

Selling ads across these platforms to an advertiser in what the ad industry calls “integrated ad campaigns” becomes a lot more attractive.  More to the point, they overcame one of the biggest obstacles, which is the silo-like ad sales structures of newspaper ad teams selling their ads, TV station ad sales teams selling their inventory, and so on.  Media reports point to a recent campaign for Target, with ads in newspapers, on Tribune TV stations and Tribune websites.

So What?

“Integrated ad campaigns” are not that new but what is new is that they are now available where they count:  where the inventory resides.  This makes it likely that we will see them with more frequency.  Moreover, think about it for a bit:  What the Tribune is doing is a classic case of the model that like very much, which is “audience integration.”  That’s what diversified media companies do best.  They bring audiences to advertisers.  The more diversified they are then the more audiences they can aggregate.

Aggregation recognizes that audiences get their content from multiple sources.  While there may be some overlap (someone who reads “The Trib” and watches a Tribune TV station), there are many people who use one medium and not another.  If those media happen to be owned by one media company, why not place ads across all of them?  That’s audience aggregation.

It’s not always so simple.  We have often seen civil war break out in media companies among the ad sales teams.  The sales team responsible for TV ad sales rebels when the website sales team for the TV station calls on the same clients for their inventory.  It can get ugly.

And it is understandable, because you are dealing with the livelihood of salespeople.  Someone who has cultivated the ad agency (or internal ad buyer) of a large advertiser for years relies upon the sales commission to pay the mortgage .  Why should he or she let a competitor—even someone in the same corporate family—put the salesperson in financial jeopardy?

And (we hope) that’s what the Tribune Company has figured out.  We hope that the integrated sales team means that commissions are not limited to one medium because that is the only way that you can (and should) change the ad sales culture.  After all, ad revenues amount to the lifeblood of most media companies.  And selling ad inventory makes that lifeblood pump.  And earning those commissions is what enables the sale of that inventory.

There is one more thing to add, which is that the ad sales team will be sitting on some of the most lucrative assets–the date from the various media.  User data are what advertisers want.  Multi-platform ad campaigns are what can generate rich data.

FTC to Bloggers: Tell the Truth on Endorsements

Summary:  The Federal Trade Commission just issued regulations that, in essence, require bloggers (among others) to disclose any “material connections” between advertisers and endorsers.  No one should be surprised:  Restrictions on endorsements have been around for a very loooong time, consistent with the FTC principles of truth in advertising.    It remains to be seen exactly what will be sufficient disclosure but it should not be a problem.  The regulations also update (the first since 1980) the regulations for other endorsers, including celebrities.  (Read the release at www.ftc.gov/opa/2009/10/endortest.shtm.)

The Details.

You’ve probably read a blog that raves about some new gadget.  It may well be that that the blogger has cut a deal with the manufacturer of that gadget—whether payment or simply receipt of one of the gadgets.  And yet, you as the reader had no idea of that connection.

Well, that part—your lack of knowledge of any link—is about to change.  The FTC now requires a blogger to disclose any material connections.  The FTC went to great lengths in its notice in the Federal Register to discuss public comments and to provide examples (see www.ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf).

So What?

So we read about great gnashing of teeth and rending of hair among bloggers.  It might be that these regulations touch an nerve of libertarianism incipient in the digital world.  Or it could be that more than a few bloggers make at least beer money (and perhaps even a living) from these endorsements.  It turns out that there are sites you can visit and sign up for such endorsements, which makes it easier.

But, putting that aside, perhaps it is as it should be.  Blogging is just another means of communicating—a medium, to use an arcane word.  Shouldn’t users trust opinions that are not based on payment or special favors?

What To Do?

But let’s put aside all of the polemics and just look at what has to be done.  Look at Example #7 on page 79 of the FTC notice we mentioned above (see www.ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf and go to p. 79).  Referring to a video game blogger who received a free game to review, the FTC says:

Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge.

Not much help.  But thinking about the FTC’s long tradition, it is helpful.  They hate—and will often pursue—those who bury the disclosure in fine print.  Moreover, they specify that the type of material connection—in this case, receipt of a free copy of the game—must be disclosed.

Soooo, trying something like the following will probably work:

“[Name of Blogger] received a free copy of the Lawyers in Love video game reviewed below”, in the same size font as used throughout the blog and near the introduction or above the fold.  But, truthfully, we don’t know yet (and if you do, then let us know).

Think about it this way:  What would you want to know and where would you want it to be on the website?

FTC to Online Advertising Industry: Clean Up the TOUs & Privacy Policies

Summary:  Online advertising has been self-regulated for some time but the FTC has made it clear that it is not happy with the resulting dense legalese of TOU’s and privacy policies.  They set forth new guidelines that they expect publishers to use during the next year–at which time the FTC will consider new legislation.  (Please note:  Various ad industry associations offered their response, which is discussed in the post below at digitaldumonde.wordpress.com/2009/07/23/new-ideas-for-online-data-collection-use-the-industry-responds-to-the-ftc/.)

Although the guidelines are only just that–guidelines–they should “guide” your revisions to your TOU’s and your privacy policy.  Here is a quick summary.

I.  Introduction.

The staff of the United States Federal Trade Commission (FTC)  recently released a report (February 12, 2009) that will directly affect the documents governing the relationship between an online content provider and viewers/consumers-Terms of Use (TOUs), End-User License Agreements (EULAs) and Privacy Policies.  The report also suggests implications for the use of private information.  Please email us atjcrext@globalcaplaw.com and a copy of the report will be sent to you, or you can find it on the site of the FTC.

The report sets forth principles for self-regulation for the online advertising industry relating to online “behavioral advertising.”  (The report defines behavioral advertising, which is set forth below under “Definition”).  Technically, it is a supplemental report, but it has the effect of finalizing the December 2007 draft “Self-Regulatory Principles for Online Behavioral Advertising.”

It should be emphasized that these are principles for self-regulation for the online advertising industry.  Arguably, this means that they are not binding, and, indeed, the report makes that clear. However (and this is an important caveat), the principles will definitely guide the enforcement actions instituted by the FTC.  Moreover, it seems that the FTC is pre-disposed to initiate legislation in this area, which will probably codify much of what is found in these principles.  And states often look to such reports for guidance on their legislation on privacy.

In reading the footnotes, another point emerges from the report.  The FTC staff appears to believe that those who draft TOUs and privacy policies have not been keeping a close eye on the enforcement actions and decisions that the FTC staff believes to be relevant-and these include decisions that do not involve online matters but do involve clear disclosure for consumers.  In fact, the report footnotes include quotes from FTC commissioners that can be summed up as the following rule:

Policies that bury relevant information and choices for consumers in legalese will do so at the peril of the publisher.

(Please note that the above rule is our language and not that of the FTC or its staff.)

II.  So What?

1.  Clean up These Documents. Dense legalese will probably not “pass muster” with the FTC.  They are keeping a close eye on this area.

2.  Consumers’ Choices Must Be Clear. Just as dense legalese is for the FTC tantamount to unacceptable (and often illegal) “fine print,” obscuring consumers’ choices is frowned upon.  In particular, the report mentions “check boxes” that are already checked–something frowned upon in the report.

3.  Certain Changes to Terms Must Be Affirmatively Accepted. Any material changes or “retroactive” changes (i.e., affecting policies on data already collected) must be affirmatively accepted by the site users.  Prospective changes do not (yet) need such approval but it is pretty clear that the staff leans in that direction.  This possibly means that the common technique of saying “Use of this site means acceptance of the terms” together with the “warning” that changes can be made at any time will not be acceptable by the FTC.

4.   The PII/non-PII Distinction is Diminishing. The US approach has been to try to protect “personally identifiable information” at a higher level than that which is not personally identifiable.  This differs from the European model.  Now, the FTC is moving towards the European model and this is understandable.  The staff understands that PII can often be gleaned from non-PII, which makes the distinction too porous.  In particular, the report wishes to increase the protection of data that can identify an individual machine (PC, mobile phone, etc.), while the earlier approach was to preclude identification of an individual user.

5.   Self Regulation is a Testbed and is on Probation. The FTC simply sidestepped resolving many issues, leaving it to the “industry” to try various methods.  However, one can infer that “industry” has about a year before the FTC moves towards legislation.

III.   The Report.

We have not included the entire (50+ page) Report, but we have quoted almost the entire conclusion, which summarizes the final version of the “Principles” of self-regulation.  The numbering is directly from the Report:

A.  Definition

For purposes of the Principles, 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. This definition is not intended to include “first party” advertising, where no data is shared with third parties, or contextual advertising, where an ad is based on a single visit to a web page or single search query.

B.  Principles

1.  Transparency and Consumer Control

Every website where data is collected for behavioral advertising should provide a clear, concise, consumer-friendly, and prominent statement that (1) data about consumers’ activities online is being collected at the site for use in providing advertising about products and services tailored to individual consumers’ interests, and (2) consumers can choose whether or not to have their information collected for such purpose. The website should also provide consumers with a clear, easy-to-use, and accessible method for exercising this option.  Where the data collection occurs outside the traditional website context, companies should develop alternative methods of disclosure and consumer choice that meet the standards described above (i.e., clear, prominent, easy-to-use, etc.)

2.  Reasonable Security, and Limited Data Retention, for Consumer Data

Any company that collects and/or stores consumer data for behavioral advertising should provide reasonable security for that data. Consistent with data security laws and the FTC’s data security enforcement actions, such protections should be based on the sensitivity of the data, the nature of a company’s business operations, the types of risks a company faces, and the reasonable protections available to a company.  Companies should also retain data only as long as is necessary to fulfill a legitimate business or law enforcement need.

3.  Affirmative Express Consent for Material Changes to Existing Privacy Promises

As the FTC has made clear in its enforcement and outreach efforts, a company must keep any promises that it makes with respect to how it will handle or protect consumer data, even if it decides to change its policies at a later date. Therefore, before a company can use previously collected data in a manner materially different from promises the company made when it collected the data, it should obtain affirmative express consent from affected consumers.  This principle would apply in a corporate merger situation to the extent that the merger creates material changes in the way the companies collect, use, and share data.

4.  Affirmative Express Consent to (or Prohibition Against) Using Sensitive Data for Behavioral Advertising

Companies should collect sensitive data for behavioral advertising only after they obtain  affirmative express consent from the consumer to receive such advertising.

New Ideas for Online Data Collection & Use: The Industry Responds to the FTC.

Summary:  In response to the FTC Staff Report (on which we blogged earlier), online advertising industry associations joined together and came out with their own principles to improve the data collection and use principles of the online experience.  In essence, it is a last-ditch effort by the industry to keep its role of self-regulation.  You can read the entire report atwww.iab.net/behavioral-advertisingprinciples.

The online advertising industry has responded to the February 2009 FTC Staff Report on the topic (which is called “behavioral advertising”).  Here is a summary of the main principles in our words (not theirs):

• The Education Principle—an 18-month campaign to educate consumers.
• The Transparency Principle—which mandates clear and easily accessible data collection and use practices and changes to websites.
• The Consumer Control Principle—enhanced options for determining which and how data are collected.  It is expected that a “data consent” toolbar will be created for a broad range of online providers (ISPs, browsers, publishers) that will enable consumers to consent to data collection.  There will also be steps to “de-identify” the data.
• The Data Security Principle—essentially a data security and retention policy to improve security of the data and limit the period such data are retained.
• The Material Changes Principle—requiring consumer consent to any material changes to privacy and use policies.  If successful, this will address one of the principal concerns of the FTC, which is the now-current practice of empowering online providers (e.g., publishers) to change their TOUs, etc., with retroactive application.  This is something courts have now found invalid in such online agreements, too.
• The Sensitive Data Principle—addresses concerns for data from sensitive groups—e.g., children—and sensitive data—e.g., health and financial records.
• The Accountability Principle—should be the implementing programs for these principles and disciplinary procedures.

So What?

One thing is clear:  the online agreements that govern the use of websites are now in the crosshairs—meaning that those agreements should be revised now.  The FTC Staff Report provides pretty good guidance on what to include and what to exclude.

The industry report is something more abstract but it also has some gems that can provide some great innovations for new practices.  Among them, the “data consent” toolbar is a good idea.

In addition to that idea, we really like the idea of steps to “de-identify” the data.  In fact, we think that this is probably the most important step forward.  Those data can be tremendously powerful in that form.  That is the fulcrum point—and where fortunes will be made.   And some lost, too.

(See some TOUs, etc., we have drafted:  www.npbn.com and www.photospin.com for some examples.)

AP’s Attack on “Misuse” Scores the First Points

Summary:  In what may be a variation on the model of the RIAA campaign against illegal music downloaders, AP has launched an assault on the “free” use of news on the Internet-not just their feeds but, apparently headline links.  A part of this assault is a suit in US district court in New York against All Headline News Corp., a news aggregator.  That court just denied a motion to dismiss the suit, applying the principle of “hot news” to online news for the first time.  One point for AP.  That decision and the legal theories underpinning the “assault” are connected.  Add another point for AP.

AP recently announced that it is fed up with the misuse of its news feeds–an understandable lament given that its customers (newspapers) own AP.  You may be hearing echoes of the famous move, Network, and they are more than echoes.  At the annual AP board meeting, the chairman, Dean Singleton said “We are mad as hell and are not going to take it anymore.”

We take no position on whether this is a good or bad thing.  Many, many talking heads (“typing hands” for a new name for bloggers?) are decrying what they see as a frontal assault on the doctrine of “fair use.”  We do not see it that way.  We do see it as an opportunity to clarify not only the application of that doctrine online but also a way to discuss, and eventually clarify, the appropriate business models for online news and information.

A Few Details

They plan on policing the misuse of copyrighted material.  How is a matter of speculation.  AP has signed up with Attributor, a company with technology that can track use of digital information (stories and photos) that have a digital “fingerprint.”  Armed with that information, AP could demand some portion of ad revenues from sites using the offending materials in a manner beyond the limits of the “fair use” doctrine.  (You heard it here first, by the way.  We wrote several weeks ago that demands by newspapers for such revenue are not unreasonable as a move to increase revenues for online newspapers.)

Fair Use May Change.

We get it.  We might not support the approach (and we might also support it) but fair use has been strained to, if not beyond, the limits of credulity to justify online use of information created by others, for which the copyrights are also owned by those others.  In these situations-where a legal doctrine lags too far behind market development-the doctrine becomes the focus of legal assaults and the consequences are a changed doctrine.  Regrettably, the public debate on this matter has begun to take on ideological “hate” language that relies more on ad hominem attacks than reasoned analysis and argument (in the “rhetoric” sense of that word).

The First Salvo:  All Headline News.

AP is going after All Headline News, a news aggregator.  They have been accused of stripping attribution (including copyright notice) from AP articles and re-publishing them without any changes whatsoever.  Again, we take no position on what they are doing.  AHS filed a motion to dismiss, which was denied by the district court in an interesting opinion.

Why?  Because the court anchored its action to the “hot news” doctrine from 1918 (an opinion from a case that arose from the start of the business of the real-life model of our favorite film character, Citizen Kane).  There, news that is so “hot” (like breaking news) becomes the quasi-property of the people creating the news stories in the first place.  Whatever your opinions on the doctrine, this is the first time that “hot news” has been applied to the online news world.

So What?

We discern a certain theoretical strategy behind AP’s approach, something that seems to have escaped notice with all the screaming against AP now underway.  In a sense, hot news can become something of an argument against a “fair use” defense.  That is not quite it-but we will leave that sentence in, anyway.  Rather, finding the applicability of the doctrine, the court gave AP the basis for arguing “misappropriation.”  That can become the basis of a legal theory that differs from mere infringement.  In a simple manner, it can be explained that the word is the civil law equivalent of “theft” in the criminal context.  Putting aside discussions of legal theories, strategies and tactics, the opening into this legal argument carries with it the potential of using “freighted” language to use in the PR battles that AP faces and will continue to face.

Information Wants to Be Free??

That rallying cry has energized much of the discourse that coincides with the explosive growth of all things digital.  Whether something as diffuse as “information” can be called something singular in that context is one thing;  whether it can “want” anything is another.  But that’s not our point.

There might be a tectonic shift underway (OK, warning: Now we’re getting really speculative).  Most obviously, the collapse of the newspaper industry alarmed people (OK, primarily the pundits and shareholders and employees but you get the point) enough for alternatives to “free” to be openly discussed as new (or recycled) business models.  At an even more abstract level, the conservative interpretation of the “free” market is now in retreat (rightly or wrongly is not our point), and so also might other ideological positions that tend toward a libertarian bent.  We don’t know.  But we do know that AP has a fight ahead of it-and it is a good fight.

The outcome might not be what AP wants-or what anybody wants-but it will be a changed world because of it.

European Newspapers Embrace the Digital Future

Summary:  The digital ventures of European newspapers look like they are paying off with new hopes for robust newspapers.  Plus, you get to lose weight, too.

We have posted quite a few blogs on newspapers (see others at globalstrategic.wordpress.com), an industry caught in a Chicken Little kind of depression.  So we turned to Europe to see what’s happening and it is digital and good.

Want to join a weight-loss club?  Pay $90.  Through the newspaper site.  Want to revise your profile?  Pay more.  In Norway, a tabloid newspaper, Verdens Gang, is affiliated with VG Nett, which provides news for free but charges for other premium services (like the weight-loss club).

Now, paying to upgrade your profile may be a bit much (unless the weigh-loss membership has not been successful) because of the nearly ubiquitous networking sites, but the point is to offer other services for a fee.

The Old Horse of Repurposing Content

Axel Springer, a large player in the publihsing space, revived an old concept, which makes perfect sense:  Write once, distribute many times.  Write the article and post it on multiple sites.  This is the old concept of “repurposing” content for different platforms and different audiences.

Data as a New Source of Revenue

And lest we not forget the lifeblood of newspapers is delivering audiences to advertisers.  If they think about it, the newspapers can mine vast amounts of data and deliver even better information to the advertisers.  This is a good thing.

So, new thinking–including some old thinking–gives these newspapers new revenue and new audiences.  They are not only building their brand, they are building it across platforms to reach both the same audiences and different ones.

And some of them get to lose weight, too.

Data, The New York Times, Basketball & Agreements

We are trying an experiment here.  Rather than rewrite a post we have made on another of our blogs we have set forth the link below.  That blog is for general counsel but the point is applicable to digital matters.

Here is a summary:

An article in The New York Times Magazine on Sunday March 14th on basketball provides an object lesson that you should own whatever data may emerge from any digital initiatives memorialized in a legal agreement.

http://globalgeneralcounsel.wordpress.com

Site Scraping Gets Rough

Why this matters:  traffic=ad revenues.  Scraping gets riskier.

Last month, the New York Times Corporation settled a suit brought by Gatehouse Media Inc., which runs websites for 125 Massachusetts newspapers.  The NYT’s Boston Globe was essentially scraping the Gatehouse sites.

Technically (and this distinction is important), the Globe site was returning readers TO the page of the article.  Gatehouse complained that readers were bypassing the ads on the home page.  This is interesting.

Intuitively, one would think that a large number of readers who were returned to the Gatehouse site (albeit at a subsidiary page) would in fact go to the gatehouse homepage.  But no, Gatehouse wanted more (rightly or wrongly).  It also turns out that Gatehouse could figure out how to block this process, which probably led to the NYT offering to settle–so as to avoid case law that goes against them.

So what?

Sites regularly scrape or otherwise link to other sites–usually to the subsidiary pages.  We get a lot of people asking of us if they can do it.  Well, this case—though settled and therefore not an opinion for purposes of precedent–suggests (to no one’s surprise) that doing so will subject you to legal challenge that will cost a lot to defend.

It makes sense, too.  Again, no opinion as to whether it is right or wrong, legal or not, but common sense should tell us that people who own the rights and go to the trouble of posting content where they want it posted should be able to control access to it.

Of course, Google is another matter.

The Ad Model Will Prevail

The online ad model is taking a pounding because some of the major names in the biz are not hitting their numbers and CPMs–and other metrics with which to make money–are plummeting.Here’s the prediction:  It will dip for a while and then climb–fast.  And here’s why:

1.  The current dip comes from these sources and, if you ponder them for a bit, you will see that they reinforce each other:

Source One:  The contaminated economy in general.

Source Two:  The te3rrible ad-spend market, related to the lousy track record of large media companies in hitting their numbers.  (And in particular, companies with a big Internet or mobile play)

Source Three:  Advertisers still “don’t get the web.” (OK, let’s expand our brains and start saying something like:  “Advertisers don’t get the digital platforms.”)

So, you have the ad people unwilling to stick out their necks:  What they really want to do is preserve their jobs while all around them are losing their heads.

2.  The upside?

2.1 (love this numbering system, huh?):  The reach per dollar spent is pretty enormous in the digital markets.

2.2 The demographics are changing–of the ad buyers and ad placement people:  They are “digital natives.”

2.3  The production costs are nearly nil.

2.4 You can change ads on the fly and according to market response.

2.5  And the main reason:  The granularity of the demographics and the data.  It is soooo good (and getting better every day) that people do not know what to do with it.

2009 is one of those transition years–the shift of more money to new media platforms.  Ad agencies will look like geniuses because “now they get it.” But, …

It does not follow that this is advice for new investments.  A lot of people are not sanguine about start-ups and the ad-driven model.  IN other words, the fortunes have been made there.  Now it is the spread of the model to the established economy.  Advertising needs scale or depth–breadth of audience or depth in a niche audience (which, when you think about it, is really the same thing).  Venture capitalists are not looking very closely at startups with the ad-driven model.  So even if you think you are the next Google, please be prepared for a lot of rejection.

Please be prepared for a lot more going on in the new media ad world?  Digital platform ad world?

And where will that take us with the digital transformation occurring in February????