Chapell & Associates

Wednesday, April 26, 2006

Exclusive Q&A with the NY AG's Office

iMedia Connection - April 26, 2006 A Chapell Article
The New York Attorney General, Eliot Spitzer, is often at the forefront of legal issues relating to technology, marketing and the internet. As head of the Internet Bureau of the NY Attorney General's office, Ken Dreifach has been deeply involved in these issues for several years. In his last days working for Mr. Spitzer, Dreifach sat down with Alan Chapell to discuss the legal issues facing the online media world.

Their discussion began with the broad idea of "agency," as Dreifach describes how advertisers, email marketers and others in the online space might be held accountable for the actions of their business partners. Touching upon adware, email and affiliate networks, Chapell and Dreifach muse on policing agents, how online marketing will develop and grow, and the costs of developing the necessary infrastructure. They also discuss digital rights management (DRM) and best practices for disclosing the "essence of the bargain" to consumers in a clear and concise way. Read the interview here.

posted by Isaac on Wednesday, April 26, 2006 | |

Wednesday, April 12, 2006

Q&A with WhenU's Bill Day

iMedia Connection - April 12, 2006 A Chapell Article
Alan Chapell, president of Chapell & Associates, talks with WhenU's CEO about providing consumers value, branding, privacy and more. Read the interview here.

posted by Isaac on Wednesday, April 12, 2006 | |

Tuesday, April 11, 2006

Feds Shut Down Spam Ring for Good

CNET News.com - April 07, 2006
In a deal with the Federal Trade Commission and the state of California, the people behind a prolific spam operation have agreed to pay $475,000 and refrain from illegal activity. The deal, which does not include an admission of any wrongdoing, was reached with Optin Global, Vision Media, Qing Kuang "Rick" Yang and Peonie Pui Ting Chen, the FTC said in a statement Thursday. The defendants violated federal and state laws by sending millions of junk e-mail messages hawking mortgage loans and other products and services, the FTC charged. Consumers forwarded nearly 2 million of the messages to the agency.

The Chapell View
This case began about a year go when the FTC and state authorities in California sued these defendants, charging them with a number of violations of CAN-SPAM. In particular, the marketers were alleged to have failed to include a postal address in their commercial email, had falsified headers, did not include a valid opt-out mechanism, nor even identified the messages as advertisements. Given the number of violations, they might have gotten off lightly by settling - and not admitting any wrongdoing.

But I think this case emphasizes what we at Chapell & Associates have been hearing - and trying to repeat as many times as possible: vet your vendors. In online marketing, there's no excuse for not knowing who the third parties you contract with are, what they're doing on your behalf, and what they're reputation is.

CNET reports that the defendants in this case contracted with "third-party affiliates" to send the spam. Moreover, MediaPost reported today that as part of their settlement with regulators, the defendants must "obtain detailed information from any affiliates" and that "affiliates must submit emails in advance for approval."

It's always been a good marketing decision to know who is doing what on your behalf online; increasingly, it's becoming a good legal decision as well. The so-called "agency theory" of liability is gaining steam. The Center for Democracy and Technology (CDT) and the FTC have both made it clear in recent months that they intend to "shame" marketers who work with less than reputable affiliates. In addition, the New York Attorney General's office has made it quite clear that they will hold marketers indirectly liable for the actions of their affiliates.

I do think that more online advertisers are taking notice. But it's worth saying again: there's no replacement for knowing who you're working with.
posted by Isaac on Tuesday, April 11, 2006 | |

Wednesday, April 05, 2006

Hollywood Studios to Start Selling Films Online

SiliconValley.com - April 4, 2006
Hollywood studios will start selling digital versions of films such as "Brokeback Mountain" and "King Kong" on the Internet this week, the first time major movies have been available online to own. The films can't be burned onto a disc for viewing on a DVD player. Still, the move is seen as a step toward full digital distribution of movies over the Internet. Six studios said Monday that sales will begin through the download Web site Movielink. The site is jointly owned by five of the seven major studios.

The Chapell View
Based upon this announcement, there are two things we'll be looking at in the near future.

  • Ads anyone? - Now that we have an online distribution model for movies, how long until consumers are offered an ad-supported version of the movie? Moreover, how will those ads appear? Will they resemble the traditional 30 second spot? Will the ads be in addition to upcoming movie trailers which most of us already see on the DVDs we rent? Since most of these downloads are exclusively for use on the computer, will the user receive pop-up ads, or have their surfing behavior tracked? It'll be interesting to see how this is all presented to the User - but c'mon kids, we all know it's coming.


  • DRM for dummies - How will the movie studios be able to secure their intellectual property in a way that allows some level of reasonable use for the consumer? If I pay $30 for a download of King Kong, am I going to be able to play it for my grandkids in 20 years? Is it reasonable for me to expect to do so given that NOBODY knows what we'll be using to play movies then? (On an unrelated note, I've heard from a reliable source that Smell-o-Vision is going to replace television.) More importantly, if the movie studios are going to restrict the use of their intellectual property, are they going to communicate those limitations in a manner and place that the average consumer is likely to read and understand? As my good friend Dr. Phil says, "past behavior is a great indicator of future success." If that's true, then I definitely have my doubts.
posted by Alan on Wednesday, April 05, 2006 | |

Tuesday, April 04, 2006

Regulators: Privacy Notices too Confusing

Seattle Post-Intelligencer - March 31, 2006
The privacy notices stuffed into envelopes with bank and brokerage-firm statements and credit card bills aren't getting much of a reading from consumers and are too complicated for most to understand, regulators say. The notices from financial institutions disclosing their privacy policies, required by law, should be simpler, shorter and better designed so that consumers can understand them, said the report issued Friday.


The Chapell View
It's become something of an accepted fact in online marketing that consumers are unlikely to read privacy policies. According to this report from the Federal Reserve and other banking regulators, evidently this holds just as true offline as well.

This might not be entirely surprising. But what's interesting, I think, is in the reasons given by consumers as to why they don't pay attention to the privacy notices that come with their bank statements. When we talk about privacy policies online, one of the major concerns is accessibility - where the link to the privacy policy is, whether it's available from an End User License Agreement, and so on. But getting a privacy policy in an envelope is fairly accessible. So why aren't they being read? They're too complicated.

While this may neither be that surprising, it might imply two things. In the online world, we can make privacy policies and EULAs as accessible as we'd like, but if they remain full of legal jargon or scroll on for an extended number of pages, consumers still aren't going to necessarily make their way through them. Avoiding a deceptive privacy policy can often mean providing conspicuous notice. If consumers aren't reading privacy policies because of their complexity, 'conspicuous' might have as much to do with brevity or ease of understanding as accessibility.

Offline, I do wonder, though: even if the privacy policies stuffed in with credit cards were shorter, clearer and more concise, would they be read? No matter how simple an online privacy policy is, it still hasn't been obvious that more consumers will click on it.
posted by Isaac on Tuesday, April 04, 2006 | |

Monday, April 03, 2006

Potential Solution Strategies for Spyware

iMedia Connection - April 03, 2006 A Chapell Article
A recent panel discussion between technology and legal analysts provided a different angle on the spyware controversy. This discussion was actually quite different from what I'd heard before -- for two main reasons. First, the arguments over spyware have, as we had hoped, moved forward. Today's problem is less, What is spyware? And more, What are we going to do about it?

Second, this panel wasn't made up of folks from the online marketing sphere. So their perspective was a little different, and sometimes even hostile to many advertising platforms. Yet while I may not have agreed with everything said, it was valuable to hear a take on solutions to spyware from outside of the marketing sphere. In fact, many in the online space may do well to take note of what was suggested. (more).

posted by Isaac on Monday, April 03, 2006 | |

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