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The Digital Advertising Alliance (DAA) recently issued guidance explaining how its Self-Regulatory Principles for Online Behavioral Advertising and Multi-Site Data apply to certain types of data in the mobile space.  The DAA’s Self-Regulatory Principles are a direct response to the Federal Trade Commission’s (FTC) call for advertising industry self-regulation in the digital space.

The DAA clarified that its Self-Regulatory Principles are applicable to three newly-defined classes of mobile data: (1) data collected from a particular device regarding app usage over time on non-affiliated apps (Cross-App Data), (2) data about the physical location of the individual or device (Precise Location Data), and (3) calendar, address book, phone/text log or photo/video data created by a consumer and stored on a device (Personal Directory Data).  In addition, the DAA reaffirmed the applicability of the Self-Regulatory Principles to the collection of data over multiple sites (Multi-Site Data).   Significantly, the DAA acknowledged that it may not be feasible to comply with the Self-Regulatory Principles on mobile devices in the same manner as on desktops.  For example, devices with small screens might make it difficult to provide notice of Multi-Site Data collection on the same webpage where this data was collected.  In such instances, the DAA stated that notice would be acceptable as long as it is “clear, meaningful, and prominent.”

Data collection for operations and systems management, market research, product development and reporting for ad delivery purposes are all exempt from the Self-Regulatory Principles’ notice requirements.  In addition, de-identified data that does not associate or connect an individual with a particular device is carved out from certain compliance obligations.  Note, however, that none of these categories of data may be used to determine eligibility for employment, credit, healthcare treatment or insurance.

Notably, the DAA made clear that the new guidance is in an “implementation phase” and that, during this phase, the guidance will not be in effect or enforced by the DAA.  However, once the DAA announces that this new guidance is effective, it will begin to enforce any non-compliance through its accountability mechanisms.

The Way I See It

Spamming has taken a new form in this era of mobile phones and text messaging.  In addition to fighting the clutter in our e-mail inboxes, we are also faced with clutter on our cell phones.  In the words of the FTC, text message spam is a “triple threat.”  First, mobile spam often uses the promise of free gifts or product offers to get you to reveal personal information such as bank account, credit card, or Social Security information.  Alternatively, clicking on a link in a text message can lead to the installation of malware that collects information on your phone and sends it to a third party.  Second, the spam can lead to unwanted charges on your cell phone bill. Third, these unsolicited messages can slow your cell phone’s performance.

With few exceptions, it is illegal to send unsolicited commercial e-mail messages to wireless devices, unless the sender gets your permission first.  The FTC has taken an active interest in preventing this spamming from continuing.  In March 2013, the FTC filed eight different complaints in courts around the United States charging twenty-nine defendants with collectively sending more than 180 million unwanted text messages to consumers, many of whom had to pay for receiving the texts.  The messages promised consumers free gifts or prizes, including gift cards worth $1,000 to major retailers such as Best Buy, Walmart, and Target, in exchange for providing sensitive personal information, applying for credit, or paying to subscribe to services.  The text message spamming network involved the individuals sending the spam, who got paid by website operators based on how many consumers entered information on each website, and website operators, who were paid by businesses that gained customers through the process.

In July 2013, the FTC continued its campaign against these spammers by filing another complaint in the U.S. District Court for the Northern District of Illinois naming another set of defendants in this network.  Cell phone companies as well as major big box retailers, fearing that this practice tarnishes their brands, have also warned their customers and provided avenues through which to lodge complaints.

 The Way I See It

  • I see that, while text message spamming was inevitable, it, unlike e-mail spamming, may have an end in sight since there are direct costs to the consumer from simply viewing the message, there are direct effects on cell phone service, and there are many ways for consumers to prevent this spamming from occurring (i.e., putting one’s number on the National Do Not Call Registry or submitting a complaint to a cell phone company, retailer, or the FTC).

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    Continue Reading “Canning the Spam” – The FTC on Mobile Spamming

The way we get our news is changing.  Every morning and throughout the day people around the world log on to Twitter to find out what is making headlines, new key developments on topics of interest, and what is “trending” – literally and figuratively.  And Twitter is not the only social media network being utilized to gather news and check for updates.  Facebook’s “Timeline” offers users the ability to share news articles within their network. Many social media users will check various social media sites more often than they may like to admit, looking for news or articles posted by “friends.”

The New York Times may have caused a stir when it introduced a paywall to access unlimited news content, but for many people, established news organizations are no longer that critical.  After all, they don’t have to look beyond their social networks to find the news they want.  Critically, with this shift in media consumption, advertising dollars are shifting too – the industry is going social.  Based on exponential increases in ad spend on social and digital networks, a recent BIA/Kelsey study predicts that social media ad spending will grow significantly over the next few years, from $4.7 billion last year, to $11 billion in 2017.

 THE WAY I SEE IT

I see the shift to social continuing and more advertisers spending less on traditional media including digital news outlets, TV, and print, and spending more on social networks.

  • I see the shift to social continuing and more advertisers spending less on traditional media including digital news outlets, TV, and print, and spending more on social networks.

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    Continue Reading Ad Dollars Go Social

The Federal Trade Commission (FTC) recently released updated Dot Com Disclosure guidelines to fast forward to the present day and catch up with the technology consumers use more and more frequently – including smartphones, tablets, and social media. I previously gave you an overview of what the updated guidance means and how marketers need to approach the new FTC standards, and you’ve read “The Way I See It” on the updated guidelines.

I wanted to turn to an industry expert to discuss what the new FTC Dot Com Disclosure guidelines mean for advertising on various key platforms and what could be next for mobile and tech.

The Way the Industry Sees It:

I sat down with Jerry Karnick, Vice President and Deputy General Counsel at Verizon Wireless, to get his thoughts.

 We all seem to agree that the updated guidance was a necessity, but do you think the Dot Com Disclosures will help grow advertising potential on mobile and online platforms?

I do. Advertising through online and mobile platforms is here to stay, and the new Dot Com Disclosures recognize and embrace that reality. Of equal importance, the new Dot Com Disclosures also provide advertisers with added clarity on what is required, while continuing to allow advertisers the necessary flexibility to meet those obligations. With the guidance provided by the new Dot Com Disclosures, more and more reputable advertisers will have increased comfort advertising on these platforms, especially on the small screens available in the mobile arena. At the same time those advertisers won’t have to worry that their ads, which include the disclosures necessary to ensure the ad is neither false or misleading, will be less appealing than the ads of other online or mobile advertisers that may not have otherwise included the necessary disclosures, either at all or in proximity to the main advertising message.

With smartphones and tablets, the majority of issues presented by the old Dot Com Disclosures were how to present disclosures in the new space constraints. For the mobile industry, does the new guidance meet these concerns and are there any significant new issues that are raised?

The new Dot Com Disclosures provide the necessary clarity about whether and how the traditional advertising rules will apply in the mobile space. What they don’t do – nor, of course, could they – is increase the size of the screen. The industry will continue to wrestle with space constraints. But, now that there is clarity on what is required, it will be up to all of us to find new and creative ways to design ads in ways to ensure the necessary information is communicated effectively and the overall message conveyed to consumers is not misleading.

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Continue Reading A Conversation With Verizon’s Jerry Karnick On The FTC’s Updated Dot Com Disclosure Guidelines

I talk here on Madison Ave Insights all of the time about the importance of mobile and social media for advertisers.  Technology is always changing, and with new technology comes a set of new challenges for industry groups, brands, and regulators.  In light of the rise of smartphones, tablets, and social media, the Federal Trade Commission (FTC) updated its online advertising disclosure guidelines.  Known as the Dot Com Disclosures, the guidance updates the original guidelines which were introduced in 2000, since, as we all know, a lot has changed since the turn of the Millennium.  While the general principles of traditional advertising law apply equally to online and mobile media, the updated guidelines provide specific guidance for making “clear and conspicuous disclosures” on mobile and social media platforms.

The FTC’s updated Dot Com Disclosures signal to marketers that traditional consumer protection laws apply to mobile marketing, regardless of space limitations.  While there is no set formula for a clear and conspicuous disclosure, when evaluating whether a disclosure meets this requirement, an advertiser should consider its placement in the ad and its proximity to the relevant claim.  Due to the smaller screen size and different format of mobile platforms, the FTC changed its definition of “proximity” from “near and, when possible, in the same screen” (from the 2000 version) to now be “as close as possible” to the relevant claim.

Mobile marketers may need to become creative if they want to continue to use hyperlinks, as hyperlinks need to be obvious and labeled to explain the nature and importance of the information to which they link – terms like “disclaimer,” “more information,” “details,” or “terms and conditions” may no longer be adequate.  The FTC also makes clear that the disclosures that are necessary to comply with the FTC Endorsement Guides need to be disclosed in space-constrained ads such as Tweets and cannot be disclaimed via a click-through or hyperlinked disclosure, but need to say something like “#Ad” in the Tweet.

The Way I See It

  • Mobile marketers should look at the FTC’s new guidance in a positive light.  For too long, we have been applying the FTC’s decade-old Dot Com Disclosures guidance to mobile media, which raised unique challenges given mobile’s space limitations.  With the flexible principles and specific examples presented in the updated guidance, mobile marketers now have the necessary tools to provide disclosures that meet FTC requirements.
  • I see the FTC making clear that if a platform does not allow marketers to make clear disclosures, that platform should not be used for advertising and this should be taken seriously in order to meet FTC standards and avoid any enforcement actions or false advertising litigation down the road.

Surrounding a breakfast seminar, which was held at Davis & Gilbert today entitled, “Complying with the FTC’s Final Amendments to its COPPA Rule: What You Need to Know,” I thought a great post would be to examine that very topic.  In addition, I had the chance to speak to Wayne Keeley Director of the Children’s Advertising Review Unit (CARU) of the Council of Better Business Bureaus and interview him as my Q&A guest this week.

Advertising to children has long been laden with complex issues.  Advertising promoting products that target children have long faced criticism from consumer advocates and regulators who raise safety, health, or inappropriate content concerns.  In the digital age filled with online privacy and data collection concerns at every corner and constantly evolving technologies that put individuals – especially children – at risk, the Federal Trade Commission has increased its regulation and enforcement.  With the increased use of mobile technology and apps by children under the age of 13, the FTC initiated its review of the Children’s Online Privacy Protection Act of 1998 (COPPA) in 2010 to allow children’s advocates, website and app developers, and advertising executives and coalitions to chime in on how the FTC should update the outdated rule to protect children from the new dangers of social media, location-based software, video chatting, photo sharing, and more.  With COPPA’s expanded scope, the FTC is making an effort to ensure its regulations cover new technology and innovation.

The Way I See It

  • I see the new COPPA rule expanding the types of companies that are required to obtain parental permission before collecting data and information from children to reflect the digital world we live in today.  COPPA clearly covers mobile and tablet apps, location technology tools, voice recognition tools, social sharing networks including Instagram, Facebook, and Twitter, and online advertising networks, among others.
  • I see the FTC making strides in privacy and data protection regulation with the expanded COPPA provisions, and advertisers and marketers being forced to adapt to new rules for behavioral advertising in particular.
  • The advertising industry has long championed self-regulation for advertising to children, so while the new COPPA rules are broader, the industry may not have too many new practices to adapt.  Many have also begun taking stricter precautions in engaging with and advertising to children in anticipation of the expansion of COPPA.
  • I see that new restrictions on cookie-based and other identification systems could mean some websites targeting children may reduce or stop their use of advertising networks.

The Way the Industry Sees It


I sat down with Wayne Keeley, Director of the Children’s Advertising Review Unit (CARU) of the Council of Better Business Bureaus, to discuss the FTC’s recent amendments to COPPA and what it means for advertisers, tech innovation, and regulation.

Let’s start by discussing CARU’s response to the expansion of COPPA.  Does the regulation overlap areas of the CARU guidelines?  In what ways is the regulation new for the industry?

Rather than overlapping, I believe that the COPPA rule modifications have brought the COPPA Rule more in line with CARU’s Guidelines.  CARU’s Guidelines represent self-regulatory practices.  Self-Regulation can sometimes go beyond what is required in the law and/or regulatory standards.  For example, CARU’s guidelines went beyond the COPPA Rule in those instances where website operators had a reasonable expectation that a significant number of children will be visiting their websites.  In those instances, CARU said they should employ age screening mechanisms to determine whether verifiable parental consent or notice and opt-out is necessitated.  The old COPPA Rule had an actual knowledge standard.  Under the new Rule, however, the FTC has provided an option for websites with mixed audiences that is closer to our self-regulatory model by providing that sites that target children as a secondary audience can screen users via an age gate.  Accordingly, operators will be required to provide notice and obtain consent only for those who identify themselves as under 13. This is a great example of how the experience gained under self–regulation can make a positive contribution to fashioning workable regulatory approaches as well.  The regulation is also new for the industry in that definitions are added and expanded and the FTC’s oversight of safe harbor programs is enhanced and strengthened. The new definition brings the collection of information for behavioral advertising within the regulation for the first time and will require child-directed sites to obtain parental consent before allowing the collection of information for interest-based advertising on their sites even if that information does not identify a specific child.

What does CARU see as the biggest threat to child safety and protection (i.e., location-based technology, personal data collection, etc.)?  Are there certain trends in social media or mobile technology that are red flags for CARU?

CARU has always seen the collection of personal information from young children as an important issue and had adopted data collection guidelines even in advance of the COPPA legislation.  That aspect has not changed.  The modified COPPA Rule responds to technological innovation (e.g., geo-location based technology) and current technology use (e.g., increase in use of Smartphones by children).  Social media and mobile technology have always been on CARU’s radar from their inception.  Their importance to CARU has grown in direct proportion to the increasing number of young children accessing social media and mobile technology.  While young children are increasingly adopting mobile and social media technology, the basic concerns underlying the creation of CARU – that young children are a vulnerable audience and therefore need protection – remain the same.  We look forward to working with responsible industry members to assure that these concerns are addressed. This is particularly true in the expanding area of mobile apps which are developing rapidly and are subject to the new COPPA rule as well as CARU’s general guidelines if they are child-directed.

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Continue Reading Understanding the FTC’s Expansion of COPPA: A Conversation with the Director of the Children’s Advertising Review Unit

February 1st was a big day for the Federal Trade Commission (FTC). Not only did the FTC release its report regarding mobile privacy disclosures, it also announced that it had reached a settlement with Path, a social networking app, which agreed to pay $800,000 to settle charges that it deceived users by collecting personal information from their mobile address books without their knowledge and consent, and that it collected personal information from children without their parents’ consent in violation of the Children’s Online Privacy Protection Act (COPPA).

The FTC’s report entitled “Mobile Privacy Disclosures: Building Trust Through Transparency” provides specific recommendations on improving mobile privacy disclosures for mobile platforms, app developers, advertising networks, and other third parties. Most notably, the report recommends that mobile platforms provide “just-in-time” disclosures to consumers and obtain their affirmative consent before allowing apps to access sensitive content, such as geolocation data. The report also recommends that mobile platforms consider providing “just-in-time” disclosures and obtain affirmative consent for other sensitive content, such as contacts, photos, calendar entries and audio/video content. The report further recommends that mobile platforms consider developing a one-stop “dashboard” approach to allow consumers to review the types of content accessed by the apps they have downloaded as well as icons to depict the transmission of user data. The report recommends that mobile platforms consider offering a Do Not Track (DNT) mechanism for smartphone users and makes several other recommendations aimed at providing better disclosures to consumers regarding mobile privacy.

The report also makes a number of recommendations to app developers, including that they have a privacy policy that is easily accessible through the app stores, provide “just-in-time” disclosures and obtain affirmative consent before collecting and sharing sensitive information, improve coordination and communication with ad networks and other third parties and participate in self-regulatory programs and industry organizations. In addition, the report recommends that advertising networks and other third parties communicate with app developers so that those developers can provide truthful disclosures and work with platforms to ensure effective implementation of DNT. Finally, the report suggests that app developer trade associations, academics and experts develop short-form disclosures for app developers, promote standardized app developer privacy policies and educate app developers on privacy issues.…

Continue Reading FTC Announces Mobile Privacy Disclosure Guidelines

It’s finally here. Football fans everywhere have spent the last year counting down to Super Bowl Sunday, the main event for the NFL. But advertising and marketing executives have spent the last year actively planning for Super Bowl Sunday. And let’s face it, a lot of people who are not football fans watch the Super Bowl for one thing: the commercials. The ads typically dominate water cooler conversation the next day, and now take over social media and traditional media as well – for many, the final score doesn’t even matter.

In ad land, Super Bowl Sunday is a holiday. A lot of us are like little kids on Christmas – only we’re glued to the television instead of staring at the chimney waiting for Santa to slide down. Year after year, brands deliver. The ads are creative, hilarious, inspiring. We talk about them for a year after they air… until the next Super Bowl. Which brand do you think will have the most popular ad this year?

The Way I See It

  • For advertisers, Super Bowl Sunday is the biggest day of the year. I see brands paying millions of dollars for 30-second spots during the Super Bowl and investing in ads that they hope will draw lots of sales and big returns.
  • I see brands using Super Bowl commercials not just to entertain, but increasingly to engage the consumer offer by incorporating social media or mobile elements to their TV ads.
  • I see each brand that advertises trying to push the envelope with creative spots that will stand out to consumers – helping the brand to achieve a coveted spot as one of the top ads of the year, but also boosting sales for the brand.
  • I see advertising executives from all ends – creative, compliance, consumer, privacy, legal – coming together to create ads that define their brands, attracting consumers and creating buzz – and making sure that the buzz around an ad translates into buzz around a brand, which is often easier said than done.
  • What is the lesson for advertisers from the “blackout in New Orleans”? How do you protect yourself when there is a problem at a live event? I see advertisers thinking about integrated campaigns not just on the positive side – how they can all work together, but on the negative side – what happens if something goes wrong.

The Way the Industry Sees It

I sat down with Jeff Klein, Senior Director of Marketing at Frito-Lay to discuss advertising during the Super Bowl and the importance of the NFL’s biggest game for the advertising industry.

Doritos’ “Crash the Super Bowl” has become one of the most anticipated consumer contests of the year and is very successful, having won the USA Today ‘Ad Meter’ polling in three of the last four years. On a larger scale, consumer engagement through the use of contests, giveaways, and social media engagement, has become a huge trend for brands around the Super Bowl. Do you think consumers now have different expectations about the types of initiatives that brands will launch around the big game? How has consumer engagement with Super Bowl advertising evolved in recent years?

I think expectations of brand communication and activation have evolved considerably regardless of the communication medium, but they are certainly amplified at the Super Bowl. The days of talking at your consumer and expecting some sort of action are long gone. It’s more about consumer engagement – how can you continually engage your target in a conversation that goes well beyond the 30-second ad. How do brands achieve this on the world’s largest advertising stage? That depends largely on a brand’s narrative, but you can bet there will be innovative ways to extend their messaging beyond the game. Doritos literally invented the crowdsourcing model around the Super Bowl, and a few brands have been inspired to take similar approaches. It works for Doritos because it’s authentic. It’s not just a Super Bowl campaign, it’s part of our brand’s DNA.

90% of Super Bowl ad spots were sold by early September 2012 – just over five months before the game airs. What makes so many brands look to invest in this expensive space year after year? What is it about the Super Bowl and its viewership that holds such importance for brands?

For brands, it is absolutely a huge investment, but it also offers a unique communication opportunity in today’s fragmented media environment. From a pure eyeballs perspective, no program comes even close to the reach Super Bowl offers. There are few opportunities better in the year to drive awareness of a brand’s positioning, innovation, or programming – and the timing of the game allows you to set the tone for the year. Beyond this, it’s important to understand that not all Gross Rating Points (GRPs) are created equal. It’s very easy for consumers to avoid a brand’s messaging with technology. Not only is the Super Bowl virtually DVR proof, but people actually tune-in FOR the commercials.

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Continue Reading Advertising’s Big Night: Super Bowl 47

The Federal Trade Commission (FTC) ended 2012 with a bang by adopting final amendments to the Children’s Online Privacy Protection Act (COPPA). For those of us who work in children’s advertising, these long awaited amendments came as no surprise. The final amendment, which goes into effect on July 1, 2013, came only weeks after the FTC issued a report that found that mobile applications have demonstrated “little progress” in addressing concerns about the privacy of children’s data.

COPPA was first enacted in 1998 and requires that operators of websites and online services that are either directed to children under thirteen or have actual knowledge that they are collecting personal information from children under thirteen notify parents and obtain their verifiable consent before collecting, using or disclosing personal information from children. The FTC initiated the review to ensure that keeps pace with evolving technology, such as mobile devices and social networking. In other words, the FTC wanted to ensure that COPPA protects the six year old child you see on the bus everyday playing with his parent’s iPhone.

Fast forward to the present. In a move intended to give parents greater control over data collected about their children online, the recent amendments to COPPA increase its scope, requiring additional types of companies to obtain parental consent before collecting personal information from children under thirteen. Specifically, child-directed sites or services that integrate outside services, such as plug‑ins and advertising networks, which collect personal information, are now covered by COPPA. Plug‑ins and ad networks whose operators have actual knowledge that they are collecting personal information through a child-directed website or online service are also now subject to COPPA. In addition to expanding the kinds of companies under COPPA’s purview, these amendments also expand the types of information sites and services are not permitted to collect, use or disclose without parental consent. Geolocation information, photos, videos, and audio files that contain a child’s image or voice, and persistent identifiers that can be used to recognize users over time and across different websites all require parental consent prior to collection. One important exception to the rule is any circumstance in which an operator collects a persistent identifier for internal operational purposes-for example, site analysis and network communications. In such instance, no parental consent is required.…

Continue Reading FTC Amends COPPA to Strengthen Children’s Privacy Protections

2012 is projected to be a big holiday shopping season, with consumer spending expected to return to near pre-recession levels.  The National Retail Federation’s 2012 consumer holiday spending survey forecasts that the country’s holiday spending will rise 4.1% to about $586 billion – the most optimistic forecast since the recession.  But a lot has changed since the pre-recession 2007 holiday shopping season.  The consumer shopping experience has seen significant changes in these past five years, and the holiday shopping season is different today than it was then – a sign of the technological advances that have been made, as well as the strides retailers and advertisers are making with digital, data, social media, and mobile.

The Way I See It

The ‘Holiday Shopping Season’ starts earlier and earlier every year, and this year was no exception, with retailers unveiling holiday displays and deals before Halloween.  And Thanksgiving Day became the new Black Friday this year, with major retailers opening on Thursday evening with outrageous “while supplies last” deals on technology, toys, big screen TVs, and other hot items.

  • I see online shopping continuing to boom with sales on the web and mobile devices continuing to grow – aligned with the growth in advertising on digital and social media, and the increased use of social media by retailers.  The NRF survey estimates that online sales this year will grow 12% during the holidays to $96 billion, with more than half of consumers surveyed – 52% – planning to shop for some gifts online, which is up from 47% last year.
  • I see gift card sales continuing to be a major “gift” for consumers and retailers alike.  Retail gift cards have always been a hot item, even five years ago, but now technology has infused the gift card medium, so some of the hottest gift cards are online gift cards, prepaid debit gift cards, and mobile gift cards.  With the NRF survey revealing that 81.1% of consumers will buy at least one gift card this year, it will be interesting to see how much of the pie is taken by the “new” gift cards.
  • I see the explosion in reliance on consumer data changing holiday marketing and shopping – by far the largest and most influential change for holiday shopping in the last five years.  With data, more relevant information – products, offers, and deals – are being delivered to more consumers than ever before.  This effectively results in advertising and marketing dollars doing a better job of getting consumers to shop and buy.

The Way the Industry Sees It


I sat down with Dana Traci, Vice President in Marketing Rewards at Discover, to discuss the countless ways that the holiday shopping experience has changed for consumers in the past five years.

In your eyes, if you had to choose one development or area of change or growth that has had the largest impact on holiday shopping since 2007, what would it be?

Without a doubt, it’s the access consumers have to information via mobile and Internet channels.  They now have the ability to see a wide selection of products and prices without having to leave their houses.  They can browse deals and/or make purchases on the go, on their own time, without needing to visit an actual store.

How has technology and data changed the way your company prepares for the holiday shopping season and the way you advertise to consumers?

It’s imperative for us to advertise our messages where consumers are, and that means whether they are shopping in-store, looking at products online, etc.  In order to stay relevant and competitive, we need to expand our reach and presence as new technologies change the way consumers shop.

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Continue Reading 2012 Holiday Shopping Season: Significant Changes in Only Five Years