Vintage Filings Legal Blog

Does it seem like your online marketing campaigns aren’t hitting their goals? You may be the victim of click fraud. Click Forensics today released industry pay-per-click (PPC) fraud figures for the second quarter 2009 from the search advertising industry’s leading independent click fraud reporting service – the Click Fraud Index. Now in its fourth year, the Click Fraud Index provides statistically significant industry PPC data collected from online advertising campaigns for both large and small advertisers across all leading search engines. Traffic across more than 300 ad networks is also reflected in the data. Key findings for Q2 2009 include:

• The overall industry average click fraud rate was 12.7 percent. That’s down from 13.8 percent for Q1 2009 and from the 16.2 percent rate reported for Q2 2008.
• Click fraud traffic from sophisticated sources and scripted programs rose again in Q2 2009. This included a rise in the incidents of publisher collusion fraud on ad networks.

“The increased diligence of online ad networks to detect and block invalid traffic sources has contributed to the decline in the overall click fraud rate this quarter,” said Tom Cuthbert, president of Click Forensics. “However, increasingly sophisticated attacks, such as publisher collusion fraud, continue to be a concern. Ad networks should pay close attention to such threats in the coming months.”

The data in Q2 also showed that many of the new click fraud schemes identified last quarter continue to increase in number and sophistication. Publisher collusion fraud was one example. This scheme occurs when online publishers use rotating IP-addresses or botnets to click ads on their own sites in order to generate inflated commissions from unprotected ad networks. Ad networks have difficultly differentiating such attacks from valid clicks.

The battle between traditional and online media continues.  McPheters & Company has released results of a study conducted in co-operation with Condé Nast and CBS Vision which explored the relative effectiveness of ads on television, in magazines, and on the Internet. The study represents an unusual example of collaboration on the part of companies with competing media interests.

The study used McPheters & Company’s AdWorks™ methodology to provide comparable measures of ad effectiveness across multiple media, using 30-second TV ads, full-page 4-color magazine ads, and Internet banner ads in standard sizes. Additionally, eye-tracking software was used to determine whether – and under what circumstances – Internet ads were actually seen by respondents. The work was conducted in CBS Vision’s state-of-the-art Television City facilities at the MGM Grand in Las Vegas.

Matched groups of respondents were recruited to spend 30 minutes with a single medium in a laboratory setting. They either watched a choice of sit-coms, read a magazine they selected, or surfed the Internet at will. At the end of the period, they filled out similar online surveys that asked whether they recalled seeing 4 ads which appeared in the medium they consumed; in order to establish the level of over-claiming, which is known to vary by medium, they were also asked whether they recalled seeing 4 ads that had not appeared. These results were then used to calculate net recall or ad absorption for each medium.

Among the major findings were:

• Within a half hour, magazines effectively delivered more than twice the number of ad impressions as TV and more than 6 times those delivered online
• Though TV doesn’t deliver as many ads per half hour as do magazines, net recall of TV ads was almost twice that of magazine ads; magazines in turn had ad recall almost three times that of Internet banner ads
• 85% of Internet ads served appeared on-screen and could be identified by brand
• Among web users, 63% of banner ads were not seen. Respondents’ eyes passed over 37% of the Internet ads and stopped on slightly less than a third
• For Internet ads, almost all net recall could be attributed to ads that were seen
• Internet video ads appeared much less frequently than banner ads, and their exposure skewed heavily towards young men. When they did appear they were twice as likely to be seen as banner ads.

When study results were used in combination with other information on probability of exposure, a full-page 4-color magazine ad was determined to have 83% of the value of a 30-second television commercial, while a typical Internet banner ad has 16% of the value.

Ever wonder which of your online ads are generating the most exposure?  Well, Lotame, a platform enabling targeted advertising to customizable audiences through social data, today revealed surprising results of a recent study comparing the impact of different online ads. The study, based on 148.3 million ads served in 2009, demonstrated a distinct advantage for 300 x 250 “medium rectangle” ads over the 728 x 90 “leaderboard” format typically found at the top of a page, and 160 x 600 “skyscraper” ads.

While relative advertising rates for the three ad sizes vary according to the Website, page position and other factors, few if any reflect the distinct differences in the average time spent viewing each ad size. Of the ads studied by Lotame, internet users spent an average of 13 seconds viewing each medium rectangle, 5.4 seconds viewing each leaderboard, and 1.9 seconds viewing each skyscraper.

“Advertisers plan campaigns and buy ads based on traditionally accepted criteria including size and placement, but the data clearly shows that the rates commonly charged for each ad type don’t accurately reflect the impact delivered to the audience,” said Scott Hoffman, CMO for Lotame. “Thanks to the same technology that uncovered these findings, Lotame can eliminate questions around what ad types deliver the most value and help advertisers design campaigns that deliver demonstrable impact.”

In order to accurately measure the impact of the time spent with an ad, Lotame’s Exposure Tracker technology counts the time that a user actually spends viewing an ad without counting time when the ad is obscured, minimized or scrolled out of view. By accurately monitoring and combining the time each user spends with the ad in plain sight, Lotame can measure the actual impact on the desired audience. In this way, Time Spent removes the single biggest flaw of traditional display advertising – the fact that an “impression” may not make any impression at all.

Platform-A’s Business Intelligence organization, in partnership with IRI has released the results of a new study on trends in consumer couponing with interesting results. Based on input from more than 36,000 IRI panelists gathered in September, 2008, the study gauged consumer usage of traditional newspaper coupons and interest in digitally distributed online coupons.

The research comes at a critical juncture, when American families are extremely value-focused and eager to stretch their buying power, yet newspaper circulation (and thus the traditional vehicle for coupons) is in steep decline.

“This data highlights a number of trends that are converging to make online couponing an appealing option for CPG manufacturers,” says Mark Ellis, Senior Vice-President, AOL / Platform-A. “We have an economy that makes coupons much more relevant to the average consumer, a rising generation of families totally at home with the Internet, and an overall decline of the newspaper and its Sunday circular distribution. There’s clearly a huge window of opportunity here.”

The study reports that more than 90 million consumers (78% of retail shoppers) currently use newspaper coupons, with nearly one out of every four of the newspaper coupon clippers likely to be at least 65 years old. It also revealed that nearly four out of every 10 shoppers – a total of 40 million consumers – would be very likely to use coupons accessed online. Not surprisingly, the younger the consumer, the more comfortable they were with the idea of accessing coupons online:

• The youngest market segments are the most receptive to online coupon offers, with 51% of 18-24 year-old shoppers indicating that they would be very likely to use coupons presented to them online.
• While historically ambivalent to traditional coupons, younger couples are the most likely life-stage group to use online coupons, indicating an opportunity to influence product choices within this segment.
• Young couples without children are among the respondents most likely to use a coupon they found online, followed by shoppers with younger children.

Value-focused promotion is clearly the strategy of choice right now in the CPG market, evident in the fact that eight out of Platform-A’s top 10 CPG clients use value-based messaging in their online advertising. And, many of these advertisers are already taking advantage of the innovative approaches to couponing available online, such as AOL’s Shortcuts.com. Launched in 2008, the site allows consumers to apply online coupon promotions directly to their grocery loyalty cards, making coupon discounts paperless and automatic at checkout.

“What’s particularly remarkable about the study results is how open young people are to the idea of using coupons online – even though clipping coupons from the newspaper really hasn’t been their thing,” adds J. P. Beauchamp, senior vice president, IRI Consumer & Shopper Insights. “I think we’ll be seeing CPG manufacturers jumping on this trend – using online coupons to court a new generation of consumers and build loyalty during these cost-conscious times.”

The world’s best organizations comprehend and actively leverage social media to drive holistic marketing efforts and tap into the rising tide of consumers who are participating in social sites such as blogs, wikis and Twitter. According to a new Aberdeen Group survey, co-sponsored by Visible Technologies, leading companies are successfully integrating digital channels more effectively into their marketing campaigns by developing processes and using software platforms to monitor, measure and support consumer interaction in social media conversations.

The survey, “The ROI on Social Media Marketing,” found that the most successful organizations have tools and methodologies in place to help drive marketing ROI by listening to and learning from customers and prospects.

“Regardless of the current economic environment, companies need to directly connect with consumers through new digital channels to increase marketing ROI,” said report author Jeff Zabin, research fellow with Aberdeen’s customer management practice. “Platforms like Visible Technologies’ TruCast help brands such as Microsoft, GM and Hormel listen to and measure the effectiveness of social interactions.”

Leading companies “use multiple approaches to identify the individuals who wield the greatest amount of influence in any given topic area and to track changes in their influence over time,” according to the report. “Best-in-Class companies engage these top influencers as brand evangelists, and then track the impact of their words and actions in terms of return on marketing investment.”

The report found that 68 percent of the companies gauged Best-in-Class have a process for monitoring social media. However, only a third of “average” companies and fewer than one in five of “laggard” organizations have a monitoring process in place, the report concluded.

The survey also highlighted the enormous potential of social media monitoring tools and platforms. Fewer than half of the Best-in-Class respondents indicated they use tools and platforms to strengthen their social media monitoring process, and only 40 percent had defined metrics for measuring social media monitoring effectiveness.

“Companies exploring online engagement can use the Aberdeen findings to help build best practices to listen and learn from their brand advocates and detractors to determine where the most influential conversations are happening,” said Blake Cahill, senior vice president of marketing, Visible Technologies. “We’re proud to partner with Aberdeen once again to shed light onto this rapidly emerging and increasingly influential field for brands.”

The Aberdeen study also highlighted experience from Marty Collins, senior product marketing manager for Microsoft’s Windows Live and Visible Technologies customer.

“We monitor in excess of 1,500 discussion threads a day on very specific topics where we think we can add value to the conversation,” Collins said in the report. “There are ways to identify which conversations are the most influential, which ones have the greatest reach and those are the ones in which we’re mostly likely to participate.”

Sponsorship dollars for a company can either help establish a brand in hard to reach markets, or can simply be a wasteful use of money.  Sponsorships in the auto and motorsport industries have been highly debated lately, especially with businesses tightening their excess marketing budgets during the recession.

Automakers and dealers are being forced to question the value of every dollar spent. With that in mind why would any manufacturer sponsor motorsports – especially in these challenging times? The answer is clear: because it sells cars and trucks.

In the recent new vehicle buyer survey by Foresight Research, motorsports influence is compared to 15 different forms of marketing communications used by buyers. Interestingly, among the total sample of new car and truck buyers 43% indicated that they had watched at least one motorsports event in the last 12 months. 14% had attended at least one race and 23% indicated that motorsports had at least some influence on their new vehicle purchase decision.

But what may be the most compelling reason to be involved in motorsports is the power that some fans can have in the purchase decision of other buyers. “Shouters” are people who influence the automotive purchase of others and are often influenced by motorsports. This group of buyers reported giving an average of 10 new vehicle recommendations per year to other people. It’s this strong power of influence that makes motorsports sponsorship deliver a better ROI than many other forms of marketing.

Among those who were influenced by motorsports, 67% said that power and performance was a key message. But a whopping 60% reported price and value as key takeaways and 56% learned about a specific vehicle make and model. How does this happen? 59% of race attendees visited the manufacturer’s display.

Online retailers who open a physical store during the holiday shopping season could see more than a 15% decrease in online sales, according to research by professors at MIT Sloan School of Management. The opening of stores triggers the requirement to charge sales tax, which affects online sales because customers can look at competing retailers online and find alternative options at better prices, they explained.

The professors found in a paper titled, “How does an Obligation to Collect Sales Tax Affect Consumer and Firm Behavior?” that U.S. state sales tax laws have a significant impact on both customer and retailer behavior, providing a disincentive for retailers to establish a physical presence in high-tax states as well as a disincentive for customers to make online purchases when sales tax is charged.

Coauthor and MIT Sloan Marketing Professor Duncan Simester said that retail websites are required to charge state sales tax once they establish a physical presence in a state such as a retail store, warehouse or office. “On the Internet, we found that when sales tax was charged, demand dropped about 16%,” he said.

The authors found that a way to mitigate the decrease in online sales is to offer price discounts. “The deeper the discount, the less likely customers were to look at competing retailers and the smaller the impact of charging sales tax,” said Simester. “You may still have to pay 5% more because of sales tax, but the reality is that you are already getting a good deal so there is less incentive to search elsewhere.”

The effects of an automaker bankruptcy would inflict much higher costs to United States taxpayers, up to four times the amount of the proposed federal bridge loans if at least two companies failed, according to a joint analysis released today by Anderson Economic Group (AEG) and BBK, an international business advisory firm with extensive experience in the automotive industry. The analysis is the first comprehensive study of the likely costs of a bankruptcy declared by the Detroit automakers contrasted with the taxpayer costs of the requested federal bridge loans. The results were released during a press conference at BBK headquarters in Southfield, Michigan, and show that the nation’s economy would be far better served by providing bridge loans to the automakers.

“We hope this research report provides policymakers and taxpayers with an objective, independent assessment of what an automaker bankruptcy would look like,” said Patrick L. Anderson, Principal and CEO, Anderson Economic Group. “The findings indicate a bridge-loan scenario would be the more financially sound choice of the scenarios currently under debate in Washington, with lower relative economic costs than not providing any type of financial support.”

The study estimated direct taxpayer costs of multiple scenarios for a bridge loan, and a bankruptcy, over a two-year period. It revealed that the losses of employment, income, and tax revenue in a bankruptcy scenario are unequivocally much higher than the losses from company restructuring with the help of federal bridge loans. Under a bankruptcy scenario, which contemplates two of the three Detroit-based automakers failing, there would be more than 1.8 million one-year jobs lost, and nearly $70 billion dollars less in federal and state tax revenue over a two year time period.

“The report shows the immediate impact of the collapse of even two automotive manufacturers that would only further exacerbate our current economic crisis and likely would precipitate a complete shutdown of nearly all auto production in the U.S. for some time,” according to Kriss Andrews, Managing Director and Automotive Practice Lead, BBK. “The other direct economic costs of a bankruptcy would be similarly distressing – from additional debtor-in-possession financing of an already bankrupt automaker by the Federal government, to the disruption of the credit and related markets.”

Very few companies push the envelope when it comes to marketing their product like Apple (AAPL), however we found out that even they are not outside of the confines of the law.  Recently Apple advertised they said “all the parts of the internet are on the iPhone”.  See the commercial below:

However it turns out that, as amazing as the new iPhone may be, it cannot access “all parts of the Internet”.  There are several sizable technology components such as Flash Video and Java Script that do not work on Apple’s wireless device.  Apple attempted to defend the claim by saying that the intent of the assertion was simply to state that the iPhone’s web browser could access any website, but not every particular service.  However, considering that some of the most popular websites are not able to fully render on the phone, the courts ruled that Apple was misleading the public with their ads, see below for the official statement,

“We noted Apples argument that the ad was about site availability rather than technical detail, but considered that the claims “You’ll never know which part of the internet you’ll need” and “all parts of the internet are on the iPhone” implied users would be able to access all websites and see them in their entirety.  We considered that, because the ad had not explained the limitations, viewers were likely to expect to be able to see all the content on a website normally accessible through a PC rather than just having the ability to reach the website.”

So regardless how large your brand reach is, accurate advertising is a prerequisite to keeping legally clean.  And if you are working for a publicly traded company, make sure that each piece of marketing material that is displayed to the public is true.