Q2 2014 Quick Links, Part 3 (Privacy, Marketing, E-Commerce & More)

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Photo credit: 3D Quick Link Crossword // ShutterStock

Photo credit: 3D Quick Link Crossword // ShutterStock

Privacy

* Snapchat’s basic value proposition (“Disappearing digital photos”) has been deceptive from the beginning. The FTC busted them for it. (I saw James Grimmelmann added this to his Internet Law casebook. We’ve also added it to our Advertising Law casebook, coming out shortly).

* European Court of Justice rules that the European Data Retention Directive is invalid.

* Dark Reading: Recent breaches of retail and credit card data are making customers think twice about where they shop and how they pay, researchers say

* Sutter Health v. Superior Court, C072591 (Cal. App. Ct. July 21, 2014). In lawsuit over data security breach of medical records, “No breach of confidentiality takes place until an unauthorized person views the medical information.”

* Seyfarth Shaw: Social Media Privacy Legislation state-by-state summary

* K.W. v. Holtzapple (M.D. Pa. July 10, 2014). College students can’t sue pseudonymously to keep discipline for drug possession from appearing in web searches.

* Scott J. Savage & Donald M. Waldman, The Value of Online Privacy:

the representative consumer is willing to make a one-time payment for each app of $2.28 to conceal their browser history, $4.05 to conceal their list of contacts, $1.19 to conceal their location, $1.75 to conceal their phone’s identification number, and $3.58 to conceal the contents of their text messages. The consumer is also willing to pay $2.12 to eliminate advertising. Valuations for concealing contact lists and text messages for “more experienced” consumers are also larger than those for “less experienced” consumers. Given the typical app in the marketplace has advertising, requires the consumer to reveal their location and their phone’s identification number, the benefit from consuming this app must be at least $5.06.

Marketing

* WSJ on a Dollar Store promotion for diapers that ended up causing big problems for Walmart’s and Target’s price-matching policies.

* New Wikimedia policy against paid editing:

These Terms of Use prohibit engaging in deceptive activities, including misrepresentation of affiliation, impersonation, and fraud. As part of these obligations, you must disclose your employer, client, and affiliation with respect to any contribution for which you receive, or expect to receive, compensation. You must make that disclosure in at least one of the following ways:

a statement on your user page,
a statement on the talk page accompanying any paid contributions, or
a statement in the edit summary accompanying any paid contributions.

Also, MIT Technology Review: The Decline of Wikipedia

My article on these topics.

The Internet Industry

* Bloomberg: Go Easy on Silicon Valley’s Nerds

* NY Times: “Thanks to the high hopes and deep pockets of tech investors, a host of high-profile tech firms are now offering incredible business and consumer services at impossibly low prices.”

E-Commerce

* About the new EU Consumer Rights Directive:

3) Banning pre-ticked boxes on websites: When shopping online – for example when buying a plane ticket – you may be offered additional options during the purchase process, such as travel insurance or car rental. These additional services may be offered through so-called pre-ticked boxes. Consumers are currently often forced to untick those boxes if they do not want these extra services. With the new Directive, pre-ticked boxes will be banned across the European Union.

* Starkey v. Gap Adventures, Inc., 2014 WL 1271233 (S.D.N.Y. March 27, 2014)

Starkey contends that there is no legal precedent to support the proposition that a hyperlink is a reasonable form of communicating the “Terms and Conditions” of a contract. Instead, Starkey argues that Gap Adventures should have included the text of the “Terms and Conditions” in the body of the three relevant communications—the confirmation email, the confirmation invoice, and the service voucher. However, this court has already decided that a hyperlink is a reasonable form of communicating the “Terms and Conditions” of a contract. See Fteja v. Facebook, Inc., 841 F.Supp.2d 829, 839 (S.D.N.Y.2012)…In this case, Starkey acknowledges that she received the confirmation email, confirmation invoice, and service voucher. These three communications stated that in purchasing her ticket, Starkey read, understood, and agreed to the “Terms and Conditions” of her contract with Gap Adventures. Each communication provided a link that Starkey could click on to review the “Terms and Conditions.” However, Starkey chose not to click on any of the links and review the contract.

* Associated Press: Clothing resale sites boom as more shoppers buy with reselling in mind. First sale FTW!

Jurisdiction

* AF Holdings v. Does 1-1058, 12-7135 (D.C. Cir. May 27, 2014):

AF Holdings has made absolutely no effort to limit its suit or its discovery efforts to those defendants who might live or have downloaded Popular Demand in the District of Columbia. Instead, it sought to subpoena Internet service providers that provide no service at all in the District. As Duffy reluctantly conceded at oral argument, AF Holdings could have no legitimate reason for objecting to the court’s quashing the subpoenas directed at these providers. Oral Arg. Rec. 33:00–04. Even for those providers that do serve the District of Columbia, AF Holdings’s discovery demands were overbroad because it made no attempt to limit its inquiry to those subscribers who might actually be located in the District. It could have easily done so using what are known as geolocation services, which enable anyone to estimate the location of Internet users based on their IP addresses. Such services cost very little or are even free. See Amicus Br. of Electronic Frontier Foundation, et al. 24 (observing that “Neustar IP Intelligence . . . provides on-demand geolocation services for $8 per 1,000 addresses); see also http://freegeoip.net (last visited May 22, 2014) (providing this service for free). While perhaps not precise enough to identify an Internet user’s street address, these services “can be accurate,” as Duffy acknowledged at oral argument, Oral Arg. Rec. 23:58–24:01—certainly sufficiently accurate to provide at least some basis for determining whether a particular subscriber might live in the District of Columbia rather than, say, Oregon

Does this suggest the failure to use geo-location will be imputed against Internet defendants in other cases?

* Telemedicine Solutions LLC v. WoundRight Technologies, LLC (N.D. Ill. March 14, 2014). Denying personal jurisdiction when:

None of Defendant’s alleged contacts—its website, Facebook page, Twitter feed, and conference-based marketing efforts—was targeted or aimed at Illinois, or prompted any more than happenstance interactions with Illinois residents

* Advanced Tactical Ordnance Systems, LLC v. Real Action Paintball, Inc. (7th Cir. May 9, 2014):

As a practical matter, email does not exist in any location at all; it bounces from one server to another, it starts wherever the account-holder is sitting when she clicks the “send” button, and it winds up wherever the recipient happens to be at that instant. The connection between the place where an email is opened and a lawsuit is entirely fortuitous. We note as well that it is exceedingly common in today’s world for a company to allow consumers to sign up for an email list. We are not prepared to hold that this alone demonstrates that a defendant made a substantial connection to each state (or country) associated with those persons’ “snail mail” addresses.” Cf. Burger King, 471 U.S. at 478 (contracting with an out-of-state party alone cannot establish automatically sufficient minimum contacts in the other party’s home forum.). It may be different if there were evidence that a defendant in some way targeted residents of a specific state, perhaps through geographically-restricted online ads. But in such a case the focus would not be on the users who signed up, but instead on the deliberate actions by the defendant to target or direct itself toward the forum state. Advanced Tactical introduced no such evidence in the district court and makes no such argument on appeal.

July 27th 2014 Marketing

Lawsuit Over Google’s Unified Privacy Policy Pared Down, But Two Claims Survive

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This is a lawsuit against Google for “commingling user data across different Google products.” Under the policy in effect before March 2012, information collected in one particular Google product was not automatically combined with information from another product. This changed when Google implemented a “unified privacy policy” in 2012, which made clear that Google could combine information collected from different products. The claims were brought on behalf of a class who acquired a Google account prior to February 2012 and who maintained that account after March 2012, when Google’s new privacy policy went into effect.

Claims were also brought on behalf of those who acquired an Android-powered device while the old policy was in effect and switched to a non-Android device after March 2012, and people who acquired an Android-powered device and who downloaded an app on the Android market.

Standing: the court finds that any harm associated with Google’s disclosure of consumers’ information alone does not satisfy standing. The court distinguishes Krottner v. Starbucks, a case where the Ninth Circuit did find standing, and says that mere disclosure (as opposed to a data breach along with access of the data via criminal activity) brings this case closer to Low v. LinkedIn and Yunker v. Pandora Media, two cases where courts said mere improper disclosures are insufficient for standing. As the court has said before, the court again concludes that being forced to switch phones (due to dissatisfaction with Google’s privacy policy) confers standing, as does depletion of battery life.

Claims Asserted by the Device Replacement Subclass: Plaintiffs brought a CLRA claim based on the theory that an older Android privacy policy misled consumers into buying those devices on the premise that Google would not associate device-related information with the person’s account. Plaintiffs alleged that Google never intended to honor this promise. Google asserted a variety of bases for dismissal of this claim, most of which the court disagrees with. However, the court still finds a core problem with plaintiffs’ claim: plaintiffs never allege they saw the older version of the privacy policy. Plaintiffs made a variety of arguments as to why they need not plead exposure specifically, but the court is not persuaded by any of these arguments. This claim fails.

As to the UCL claims on behalf of those who switched devices, the UCL claim under the unlawful prong was premised on the CLRA violation, so this fails. The claims under the unfair prong fail as well. Those claims are premised on a violation of plaintiffs’ right to privacy granted under the California constitution. Pleading a constitutional violation requires a serious or egregious violation of social norms, and the type of disclosure alleged by plaintiffs here does not cut it. As the court notes:

courts in this district have consistently refused to characterize the disclosure of common, basic digital information to third parties as serious or egregious violations of social norms.

Claims Asserted by the App Disclosure Subclass: The app disclosure subclass alleged that Google breached the terms Android users agreed to, by disclosing user data to third parties following download or purchase of an app. Google argued that the complaint was vague as to when the class members made their app purchases and what privacy policies they supposedly relied on, but the court says that absolute specificity is not required, and given that this claim isn’t a fraud-based claim, it need only satisfy Rule 8’s pleading requirement. Google also tried to argue that plaintiffs are not parties to Google’s general privacy policy but instead agreed to specific policies applicable to the Android and app store. The court rejects this argument because of a dispute over the authenticity of the older version of the policy. (The court struck a portion of a Google declaration that attached this policy.) Finally, Google argued that the complaint failed to allege what terms specifically Google breached, and the court says this argument is “simply false” – the Android device policy assured customers that although Google may share aggregated non-personal information, the information shared “[would] not identify [users] personally.” The court points to a few other examples of limitations in operative privacy policies that Google appears to have later disregarded.

The court dismisses the intrusion upon seclusion claim brought by this sub-class, noting that there is a “high bar” for such a claim and it’s not satisfied here.

Finally, the app disclosure subclass claim brought UCL claims. The claims under the unfairness prong were dismissed in the previous order and the court says the rationale from that order applies equally to the revised complaint. However, the UCL complaint under the fraudulent prong survives. Whatever its fate at the summary judgment phase, at the pleading stage, plaintiffs’ allegations—that Google had a policy in place that access to information would be limited to certain groups and it knew it planned to distribute data outside these groups—were sufficient.

Ultimately, two claims remain: the breach of contract and UCL claims brought by the app disclosure sub-class.

__

Judge Grewal (like Judge Koh) tends to issue thoughtful and readable opinions, and this one is no exception. (Bonus cite to Rocky rising from Apollo’s uppercut in the 14th round.) Both sides will probably tout this as somewhat of a victory, although there is plenty to be unhappy about for both sides. For Google, the fallout from combining its privacy policy continues. Meanwhile, for plaintiffs, a pair of claims for a small subclass survive, but those claims face uncertain prospects at best as the case continues. Among other problems, the class claims may not lend themselves to class-wide resolution, not to mention the fact that reliance on a privacy policy in legally sufficient terms is not something plaintiffs should take for granted. (See “Privacy Plaintiffs Lose Because They Didn’t Rely on Apple’s Privacy Representations — In re iPhone App Litigation.”)

Overall, the ruling illustrates that bringing a privacy claim based on a network’s allegedly improper use of consumer information faces continues to be a challenging endeavor. Numerous lawsuits, ranging from those involving flash or persistent cookies to the incidental passing of personal information, may survive a motion to dismiss but only after they are whittled down significantly. This case is no exception. The claims that survive interestingly are tied to a device, which means that the average Google account-holder unhappy about Google combining her YouTube data with her Gmail data is out of luck. Cf. Rodriguez v. Instagram, discussed in this post: “Court Blesses Instagram’s Right to Unilaterally Amend Its User Agreement–Rodriguez v. Instagram“.

There are some interesting factual allegations in the complaint that the court recounts in the order. One that caught my eye involved Google’s “Emerald Sea” plan to allegedly “reinvent [Google] as a social-media advertising company,” and “creating cross-platform dossiers of user data that would allow third-parties to tailor advertisements to specific customers.” In general, although the court is recounting the allegations in the pleadings, the order contains a healthy dose of cynicism towards Google’s actions.

[As a sidenote, I should mention that I find the process of navigating Google's privacy settings and trying to avoid accessing material while logged in to an account (or controlling which account I'm logged in through) needlessly confusing. Consumer friendly from a privacy standpoint is certainly not a selling point for Google.]

Case citation: In re Google, Inc. Privacy Policy Litigation, 12-cv-01382-PSG (N.D. Cal. July 21, 2014)

Related posts:

Judge Koh Puts the Kibosh on LinkedIn Referral ID Class Action — Low v. LinkedIn

The Cookie Crumbles for Amazon Privacy Plaintiffs – Del Vecchio v. Amazon

A Look at the Commercial Privacy Bill of Rights Act of 2011

Flash Cookies Lawsuit Tossed for Lack of Harm–La Court v. Specific Media

Judge Recognizes Loss of Value to PII as Basis of Standing for Data Breach Plaintiff — Claridge v. RockYou

Another Lawsuit over Flash Cookies Fails — Bose v. Interclick

LinkedIn Beats Referrer URL Privacy Class Action on Article III Standing Grounds–Low v. LinkedIn

The Cookie Crumbles for Amazon Privacy Plaintiffs – Del Vecchio v. Amazon

Facebook and Zynga Privacy Litigation Dismissed With Prejudice [Catch up Post]

July 25th 2014 Marketing

How To Do Audience Research That Helps Focus Your Content Marketing

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It’s Sunday afternoon. You’ve popped around to see your gran, and she’s asking after your health. “Well, Gran,” you answer, “this weekend I got totally wasted and fell asleep in a trash can.” An unlikely response? I’m guessing it is for most people….



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July 15th 2014 Marketing

Removing The Fog From The Marketing Cloud

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Consider this: just 20 years ago, a retailer having a website was a huge novelty. Back then, the main purpose was to connect customers to service reps or find a store, and it took years before you could effectively showcase and optimize products like you can today with a marketing cloud. Websites…



Please visit Marketing Land for the full article.

Lawyer’s Suit Over “Professional Recognition” Spam Flops

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shutterstock_148273682-Say you’re a lawyer and you receive a promotional email intimating that you’re one of the “Top Lawyers in California.” You probably just delete it and move on, right? That would be too easy. Nicholas Bontrager sued Showmark alleging that he believed he received an accolade from a “respected legal association or organization.” The email purported to charge a $159 fee for a plaque memorializing the award. Bontrager never paid the fee because, upon inquiring, he did not receive a response from Showmark, but he did end up wasting his time, bandwidth, and email storage space. He did the logical thing that lawyers do when email wastes their time: he sued Showmark for violating California’s spam statute.

Bontrager alleged that Showmark’s email contained a misleading subject line. Ordinarily, the court says this presents a question of fact, but the court says that the subject line in this case is not misleading. The court contrasts this email with other emails where courts have found subject lines potentially misleading because they insinuated a personal relationship (Tagged; Reunion) or where the subject line leads the recipient to believe that she will get something for free (Member Source; ValueClick).  This is not the case here:

The phrase “Lawyer Media, Top Lawyers in California” indicates that the body of the email will concern top lawyers in California. This is in fact the subject addressed in the body of the email. Although the information contained in the body of the email may have been misleading because it suggested that Bontrager had received a fictitious award, the fictitious award was an award for top lawyers in California. This is exactly the topic identified the subject line. For that reason, no reasonable trial [sic] of fact could conclude that the subject line of the email was misleading.

….

Nothing in the subject line of the email Showmark sent indicated that Bontrager would receive a “Top Lawyer” plaque if he took certain action (e.g., opening the email), while the body of the email required him to take different action to receive it (e.g., paying a fee). Nor did the subject line indicate that the email was from a personal acquaintance, or even from the organization making the fictitious award, rather than a company that manufactures plaques. For these reasons, no reasonable trier of fact could find that the subject line of the email was likely to deceive a reasonable consumer. Bontrager’s § 17529.5(a)(3) claim must therefore be dismissed.

Bontrager’s claims under the false advertising statute and unfair competition laws also fail. He did not pay any money to Showmark, or for that matter to any third party, as a result of the emails. He now knows the true nature of the email, so he’s not entitled to injunctive relief against future misleading emails of this nature. He also fails to allege damages sufficient to confer standing. He failed to allege how his loss of time, bandwidth, and email storage translated into economic losses (e.g., he did not plead that he paid for email storage at work).

Finally, Bontrager alleged negligent misrepresentation, but his allegations on damages fall short on this claim as well. He has to allege that he suffered damages as a result of the misrepresentations. He did not purchase the plaque—in fact, he investigated the award and “determined not only that he had not [won an award], but also that there was no organization that made such awards.” Thus, even if he had purchased a plaque, the purchase would not have been caused by Showmark’s misrepresentations.

Bontrager gets a chance to amend some of the claims, but he’s unlikely to do so for obvious reasons.

__

Ouch. Lawyer-plaintiffs and their often poorly-faring lawsuits are a perennial favorite on the blog. To his credit, Bontrager did not represent himself. [Eric's comment: Bontrager's thrashing in court does suggest that “Lawyer Media, Top Lawyers in California” was, in fact, a dubious claim based on this lawsuit's result. Even if another lawyer represents him/her, a lawyer-in-the-role-of-plaintiff should have known better. I think Venkat and I should send a "Thank You For Demonstrating Your Legal Acumen To Prospective Clients" plaque to future lawyers who get drubbed in court when they become plaintiffs.]

CAN-SPAM litigation has diminished significantly, but as this lawsuit shows, plaintiffs still sue under California’s spam statute. Courts grappled with preemption, but unfortunately they have drawn a murky line at best. When coupled with decisions under California’s spam statute that give an expansive reading of that law, plaintiffs have wiggle room to sue under California’s spam statute.

That said, this is a nice data point for litigation over email subject lines. There’s nothing materially misleading about the subject line in this case, and the court nicely groups the cases where courts have found for the plaintiffs. I suppose the court could have said that, because there’s no award and the recognition is fake, this causes the subject line to be misleading, but the court takes an approach that looks for material accuracy. (It’s similar in this vein to cases such as Mummagraphics that decline to find causes of action based on technical inaccuracies with other aspects of a commercial email.) The court says that the subject line says nothing about the legitimacy of the award. It merely says that the email is about the topic of lawyer recognition…which it, in fact, is. Perhaps the court wasn’t touched by the usual sympathy for a plaintiff because this case involved a lawyer?

Bontrager also argued that the subject line was misleading because it failed to indicate the email was a solicitation, but the court said there’s no such requirement in the statute.

Case citation: Bontrager v. Showmark Media LLC, No. 14-01144 MMM (Ex) (C.D. Cal. June 20, 2014) (h/t Kronenberger Rosenfeld)

Related posts:

Advertiser May Have Claims Against SEO Firm Using Undisclosed Spammy Practices

Court Accepts Narrow View of CAN-SPAM Preemption but Ultimately Dismisses Claims – Davison Design v. Riley

Spam Arrest’s Sender Agreement Fails Because Email Marketer’s Employees Lacked Authority–Spam Arrest v. Replacements (Forbes Cross-Post)

Another Spam Litigation Factory Unravels –- Beyond Systems v. Kraft

Independent Contractor Relationship Between Sender and Advertiser Dooms Spam Claims – Kramer v. NCS

CAN-SPAM Violations For Private WHOIS Information and Putting Disclosures in Remotely Served Images – ZooBuh v. Better Broadcasting

Crazy SOPA-Like Attempt to Hold International Banks Liable for Pharmacy Spam Fails on Jurisdiction Grounds–Unspam v. Chernuk

Courts Allows Text Spam Class Action Against Voxer, a Cell Phone Walkie-Talkie App — Hickey v. Voxernet

Court Refuses to Dismiss Claims Against Alleged Twitter-Bot Spammer–Twitter v. Skootle

Is SOPA’s “Follow the Money” Meme Infecting Anti-Spam Litigation? – Project Honey Pot v. Does

Text Spam Class Action Against Jiffy Lube Moves Forward – In re Jiffy Lube Int’l, Inc., Text Spam Litigation

California Appeals Court Says Emails That Don’t Identify Sender Violate State Spam Statute – Balsam v. Trancos

Old School Spam Plaintiff Rebuffed in the Ninth Circuit

Text Spam Lawsuit Against Citibank Moves Forward Despite Vague Allegations of Consent — Ryabyshchuk v. Citibank

Court Dismisses Lawsuit Under Michigan Spam Statute Based on Preemption and Lack of Standing — Hafke v. Rossdale Group, LLC

Spam Claims Covered by Contract’s Indemnity Clause–Commonwealth Marketing Group v. IMG Assocs.

In Facebook’s Lawsuit Against Alleged Spammer, Court Denies MaxBounty’s Motion to Dismiss

Seventh Circuit Awards e360 a Whopping $3 in Damages Against Spamhaus — e360 v. Spamhaus

Court Rejects First Amendment Challenge to CAN-SPAM Indictment — US v. Smallwood

Jury Rejects Lawyer’s Claims Under DC’s Anti-Spam Law — CyberLaw v. Thelaw.net

July 13th 2014 Marketing, spam

Twitter Revamps Analytics To Show Impressions & Engagement On Organic Tweets

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Twitter gave its analytics dashboard a major upgrade today, offering advertisers a deeper look at how well their organic tweets are performing. Users with access to the dashboard — advertisers, Twitter Card publishers and verified users — are now able to see how many times each of their…



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Pinterest Updates Follow Button To Preview Brands’ Latest Pins

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Pinterest rolled out a new Follow button today that gives users a visual sample of what following a brand or business will mean. Users who click on the button will see a dialogue box with previews of an account’s latest pins, “and your visitors won’t ever have to leave your website to…



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July 9th 2014 Marketing, Social Media

The Weekly Compete Pulse

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Weekly-Pulse-2014

This Fourth of July weekend brings you some of our favorite articles from the web, on topics like social analytics and rising digital trends. You’ll certainly learn a lot from these pieces, so read on and find out more!

Understand Google Analytics Metrics for Social Analytics

With great content comes great responsibility… to maintain corresponding social accounts, at least!  But how do you keep track of your progress, or the impact your social media presence has on your content? Through analytics, of course – and Google Analytics has metrics to help you sort out your social media. Read this article from Business 2 Community to see how metrics from Google Analytics can give you better insights into your social performance.

Digital Transformation and the High Performance Enterprise

Change is inevitable, and change will be primarily digital. So how might large organizations see these effects? ZDNet looks at a variety of research conducted by MIT, Accenture, Oxford Economics, and PwC to track different aspects of this transformation. The informative charts and explanations help you see how the digital transformation trend can potentially yield real business benefits – so learn more here.

3 Social Media Rules Most Entrepreneurs Don’t Follow

Social media, perhaps the most direct and rapid touchpoint between you and your customer, is becoming increasingly delicate for that reason. There are important things you must do besides publishing brand content – you have to manage your engagement well (or risk social media blunders)! These three tips from Entrepreneur Magazine explore a variety of ways to refine your touch with your audience and to satisfy social-media-savvy clientele. Read more at their website!

10 Brands that Brilliantly Differentiated Themselves from the Competition

A company’s brand is (almost) everything. A strong brand should be the core of a company’s identity – but following up with digital superiority is paramount. Hubspot outlines 10 different brands from a wide variety of industries to show you examples of companies that totally nail their brand + digital strategy, so head on over to take a look at those who are getting digital right! Here’s a hint: a lot of bonus points go to websites with clean and effective UX.

Testing Is At The Heart Of Marketing Success

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Marketing for any business is an ongoing effort that requires consistent refinement and improvement to see positive results in the long-term. It is not enough to simply create a quality marketing program and leave it alone to do its job. Rather, the marketing plan for any business needs to be…



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Facebook Reports Month-Long “Discrepancy” In Reach & Engagement On Pages

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If any Facebook Page administrators were wondering about iffy reach and engagement metrics for posts recently, Facebook quietly provided an explanation today. As reported first by the Inside Facebook blog, Page managers who access the Insights dashboard are seeing this message: There is a…



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July 4th 2014 Facebook, Marketing, Social Media