Red Bull and Jaguar Test New Music-Streaming Ads

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The music-streaming service space continues to heat up for both advertisers and musicians. SoundCloud has now launched five new ad products that it hopes will help reel in the same kind of advertising spend that Spotify, YouTube and Pandora have generated from big brands.

Ads from Red Bull, Squarespace, Jaguar, Sonos and Comedy Central will start rolling out on SoundCloud's Web and mobile platforms over the next few weeks as part of its On Sound initiative. Promos will run against a handful of labels and distributors, comedy networks, independent artists, podcasts and multi-channel networks. In exchange for serving up ads, these content creators will receive cuts of the ad spend as a royalty.

The new ad products will eventually push SoundCloud to roll out subscription pricing to compete in the competitive music streaming industry. "We're introducing advertising into the service now. In the coming months, we're going to introduce a subscription offering that allows people to remove ads if they want to remove ads, and it will have other features," explained Jeff Toig, Chief Business Officer at SoundCloud.

Taking a Page From Twitter
SoundCloud has two native ad products, both of which mirror similar ad products from Twitter.

One of SoundCloud’s new ads is called promoted tracks, which pushes a piece of content to the top of desktop and mobile music streams, a format akin to Twitter’s Promoted Tweets. RedBull and Squarespace are testing the paid placement.

"Similar to a [how a Promoted] Tweet on Twitter is a real tweet, it's just promoted, these native ads are actually tracks that Squarespace will upload and then we promote," said Dan Gerber, head of sales at SoundCloud.

Squarespace’s campaign offers 10 percent off its services, and RedBull’s shows off its involvement with six artists.

Brands can also pull in their assets like visuals on top of music so that ads play like a slideshow after clicking on a promoted track.

The other native ad format promotes brand profiles, which are pages that marketers can set up as branded hubs of content. Red Bull’s profile, for example, has about 32,880 followers and aggregates playlists.

Audio-Based Marketing
SoundCloud is also launching audio ads as pre-rolls before songs, similar to YouTube’s offerings.

The first 15 seconds of the ad are non-skippable. Then, consumers can choose to skip the ad, and advertisers can run content for an additional 15 seconds. Squarespace’s audio ads begin rolling out today.

Mobile-Only Display
In terms of display ads, SoundCloud has launched mobile interstitial ads to get around the fact that banners on smartphones and tablets are almost always clicked on accidentally

The idea is that consumers must actively be doing something on the screen, like swiping or clicking, before they are served an ad.

The final two types of ads are sponsorships and contests that help brands link up with artists and bands. SoundCloud hasn’t worked with a brand on a sponsorship campaign yet, but it did reference a contest with Hans Zimmer where users submitted ideas for the chance to work with the composer’s team in his studio.






August 22nd 2014 Marketing, Technology

Twitter Gives Advertisers Objective-Based Campaigns, Pricing

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Twitter announced a new way to optimize Twitter Ad campaign performance with objective-based campaigns, reports, and pricing. Advertisers will be able to create and optimize successful campaigns, while only paying for the actions that are “aligned with” their marketing objectives.

These campaigns and pricing are available in beta to SMBs and API partners around the world, and will be rolling out to managed clients on an invitation basis over the coming months.

“Since we launched Twitter Ads in 2010, advertisers have used Promoted Tweets and Promoted Accounts to connect with an engaged audience at precisely the right moment,” says Twitter senior product manager Christina Lee. “Over the last four years, we’ve analyzed thousands of Twitter Ads campaigns and identified best practices to help advertisers effectively achieve their marketing goals.”

“With objective-based campaigns, we’ll provide a custom workflow aligned to your campaign goals,” she says. “You can select from a range of key objectives, including driving Tweet engagements, website clicks or conversions, app installs or engagements, followers, or leads.”

The workflow recommends the best ad format to use, and includes tools like an image cropper and drag-and-drop feature to make ad creation easier. You can create a website clicks or conversions campaign, and promote a tweet with a ink or a Website Card.

Reports for the campaign will display metrics deemed most relevant to your campaign’s goals.

Image via Twitter

August 8th 2014 Marketing, Twitter

Does Yelp Have The ‘Most Trusted Reviews’? A Court Wants To Know More (Forbes Cross-Post)

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Few online algorithms generate as much criticism as Yelp’s algorithm for filtering its users’ reviews, but Yelp has so far successfully avoided a serious legal challenge to its filter. Recently, a California appellate court green-lighted a lawsuit over how Yelp publicly describes its user reviews. This means a judge may look more closely into the prevalence of fake reviews on Yelp and the operation of Yelp’s filtering algorithm.

What Happened

James Demetriades owns the restaurants Jimmy’s Taverna, Rafters, and Red Lantern in Mammoth Lakes, California. He didn’t like the way Yelp’s review filter handled users’ reviews of his restaurant. For example, he alleged the Yelp filter screened out nearly half of the reviews on one of his restaurants, and it didn’t filter a review that allegedly contained false statements.

Based on a law Congress enacted in 1996, 47 USC 230 (Section 230), Yelp isn’t legally liable for its users’ reviews, even reviews that Yelp knows are fake. Section 230 also makes clear that Yelp isn’t liable for filtering reviews it deems objectionable, even if its filter makes mistakes. To avoid Section 230, Demetriades instead sued Yelp’s marketing descriptions of its filter algorithm, including the following statements:

1. “Yelp uses a filter to give consumers the most trusted reviews”;
2. “All reviews that live on people’s profile pages go through a remarkable filtering process that takes the reviews that are the most trustworthy and from the most established sources and displays them on the business page. This keeps the less trustworthy reviews out so that when it comes time to make a decision you can make that [decision] using information and insights that are actually helpful”;
3. “Rest assured that our engineers are working to make sure that whatever is up there is the most unbiased and accurate information you will be able to find about local businesses”;
4. “Yelp is always working to do as good a job as possible on a very complicated task—only showing the most trustworthy and useful content out there”; 5. “Yelp has an automated filter that suppresses a small portion of reviews—it targets those suspicious ones you see on other sites.”

Photo credit: Trustworthy arrow bar // ShutterStock

Photo credit: Trustworthy arrow bar // ShutterStock

To me, this language sounds like typical marketing hype, or puffery, which isn’t legally actionable. The appellate court disagreed, concluding that Yelp made “specific and detailed statements intended to induce reliance” and spoke “with the authority of a website that intends to attract users with the accuracy of its filter.”

The lower court rejected Demetriades’ lawsuit as a “SLAPP,” or a lawsuit designed to suppress socially beneficial speech. California has a strong anti-SLAPP law that weeds out bad lawsuits early; it’s like a fast lane for cases we don’t want in the court system. The appellate court held Demetriades’ lawsuit wasn’t a SLAPP because Yelp’s statements about its review filter fit into a statutory exception for “commercial speech,” such as advertising. The court says:

Yelp’s statements about its review filter—as opposed to the content of the reviews themselves—are commercial speech about the quality of its product (the reliability of its review filter) intended to reach third parties to induce them to engage in a commercial transaction (patronizing Yelp’s website, which patronage induces businesses on Yelp to purchase advertising).

The appellate ruling doesn’t mean that Yelp will be liable for its descriptions of its review filter. The appellate court simply revived the case and sent it back to the lower court to begin a normal judicial process. Still, this is a dispiriting loss for Yelp. It gives more fuel to Yelp’s algorithm-haters and revives a lawsuit that poses some risk to Yelp.

Yelp sent me the following statement:

It’s important to note that the court did not classify Yelp’s use of its recommendation software as “commercial speech”–indeed, the court reaffirmed that Yelp’s actions to protect consumers through the use of automated recommendation software were not impacted by its decision. Yelp’s use of its recommendation software is protected under federal law, as has been repeatedly affirmed by federal and state courts nationwide. This opinion does nothing to impact those decisions.

Rather, the court analyzed five statements that Yelp made about its software, as part of a longer video previously posted on Yelp. While the court did not determine that any of these statements was a misrepresentation, it did find that the statements fell within the commercial speech exception to the anti-SLAPP statute. The trial court had found each of these statements to be mere statements of opinion that do not fall within the commercial speech exception.

This action was part of a larger effort by the plaintiff, a self-described multimillionaire and developer, to target critics of his restaurant and to suppress negative reviews on Yelp. We believe the Court did not reach the right result, and we are evaluating our next steps.

Implications

Proxy battle. Demetriades’ real target appears to be Yelp’s users reviews on his restaurants, but his lawsuit claims Yelp falsely advertising its own services. I call lawsuits like this “proxy battles” where false advertising is being pursued as a proxy for some other underlying concern. Demetriades can’t directly address his problem with the reviews directly due to Section 230, so false advertising is the best available alternative (even if it’s a poor substitute). Courts often don’t handle proxy battles well because false advertising laws are being asked to address a problem they weren’t designed to address. As a result, proxy battles are unpredictable and doctrinally messy.

Section 230. Section 230 provides ample protection against Yelp’s liability for its user reviews or the operation of its filter. The appellate court said Section 230 doesn’t apply to Demetriades’ false advertising claims because:

Nowhere does plaintiff seek to enjoin or hold Yelp liable for the statements of third parties (i.e., reviewers) on its website. Rather, plaintiff seeks to hold Yelp liable for its own statements regarding the accuracy of its filter.

The court’s distinction may sound logical, but it’s problematic in practice. First, some courts have applied Section 230 to protect against advertising claims when those claims are rendered false due to users’ activities. For example, in 2010, a Texas court held that Section 230 protected a website for claimings that its site content was “accurate” even though user-supplied content was allegedly false. Second, we’ve seen numerous cases where plaintiffs have sought an “end-run” around Section 230 by suing over the site’s marketing language. This ruling gives plaintiffs further incentives to pick apart review websites’ marketing and explanatory disclosures for anything that might possibly be inaccurate, and the cumulative effect of those lawsuits threatens to undermine Section 230.

Implications for federal anti-SLAPP law. Yelp has been lobbying for a federal anti-SLAPP law (something I favor as well). I imagine Yelp will study this ruling carefully to ensure that any proposed federal legislation provides it with adequate coverage.

Can review websites ever promise trustworthy reviews? In 2012, the UK Advertising Standards Authority “told TripAdvisor not to claim or imply that all the reviews that appeared on the website were from real travellers, or were honest, real or trusted.” Similar to Yelp, TripAdvisor had made claims such as “Reviews you can trust”, “… read reviews from real travellers”, “TripAdvisor offers trusted advice from real travellers” and “More than 50 million honest travel reviews and opinions from real travellers around the world.” Nevertheless, TripAdvisor (like every other review website) had fake reviews on its site. UK law differs from US law, but the net effect may be the same. Unless a review website can ensure that all of its user reviews are legit–which no review website can do–it faces some risk self-promoting the veracity of its users’ reviews.

Will Yelp have to disclose its filter algorithm? Many plaintiffs would love to inspect Yelp’s filtering algorithm closely. The opinion says that Demetriades doesn’t seek to “obtain information on the mechanics of the filter.” However, the filter’s efficacy is being questioned, which inherently raises questions about exactly what the filter does and doesn’t do. If Yelp’s filtering algorithm is potentially discoverable in the case, the case’s stakes will go up a lot. If Demetriades can get a court to order Yelp to disclose the algorithm to him, expect Yelp to settle, even if on unfavorable terms.

Case citation: Demetriades v. Yelp, Inc., 2014 WL 3661491 (Cal. App. Ct. July 24, 2014)

August 8th 2014 Marketing

What’s the Minimal Requirement to be Taken Seriously as a Media Company?

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The story behind the story

I’m a big fan of Foursquare. I am a Level I Superuser who has contributed 291 tips and 756 photos over the course of 6,169 check-ins that earned me 147 badges. I own and love its shirts, both the English and Japanese editions. I’ve clearly been a fan over the years.

I guess I’m no longer their biggest fan. Well, I have had issues for quite awhile. Last November, after a reporter wrote a feature on a new ad product they put out, I wrote him, “I still can’t believe they avoid reporting active user #s. What are they afraid of?” He responded, “I’m thinking the #s must be very grim…” and later added, “I bet a lot of people would agree with you! (I agree with you!).” I told him, “Thanks for the encouragement. I’m wondering how to make it into a post that’s more than a few sentences, or if there’s anyone else that’s remotely as egregious, and thus looking at it as more of a trend piece.”

Eight months later, Foursquare’s just as quiet on user numbers, but it touts some grandoise claims. I don’t think it’s right, I don’t think Foursquare the company deserves to be taken seriously by marketers until it discloses a bare minimum of verified information. When I was finally motivated to write a column, I turned to more sources than I had in ages: Foursquare directly, Ad Age reporters, comScore’s Mobile Metrix, and eMarketer’s media relations lead. No one had answers. For such a name brand in digital media, especially in terms of marketer awareness, it is the biggest black box that I’m aware of.

The column was recently published in Ad Age. As per usual here, the better, edited version is there, and this one had more edits than usual given the sensitivity of the topic and my own approach to writing it like a journalist even when contributing it as a columnist (to be clear, I don’t receive any income from Ad Age or any other source as a journalist, and I have never made a dime from Ad Age).

I will also note that after discussing the story before it was published with a contact at Foursquare, I toned down the rhetoric considerably, well before it was submitted to Ad Age. I saved quite a number of versions of it, and the contact helped me keep a level head in terms of tempering any raw ranting and focusing this on a substantial issue that should be top of mind for media buyers and sellers alike. I have in turn heard some other people at Foursquare are none too pleased with the column, but they haven’t reached out to be directly. Perhaps they’d at least appreciate that the first draft wasn’t the final one.

Granted, any post that starts with “obfuscation” and ends with wondering why anyone would work with them isn’t exactly a puff piece. Your thoughts on this are welcome. My final draft is below, with Ad Age’s headline (since it’s better than what I had).  

Foursquare, It’s Time to Be Open about Metrics 

After five years of obfuscation, it’s time for Foursquare to decide it’s going to be a real media company, one worthy of marketers’ attention. The lesson for Foursquare and its peers on the sell side is simple: be open and transparent if you want to be taken seriously.

Foursquare has refused to release its metrics on monthly active users (MAUs) since it launched in 2009. I should know, as I’ve asked them repeatedly while representing two different agencies. Then, while writing this column, I had an exchange with a spokesperson from Foursquare’s communications team. I’m still no closer to an answer.

What prompted the outreach out to their press team was a message Foursquare sent to its first million users about a forthcoming update to the app, described publicly on its blog. The missive noted, “You’ve seen us grow from a tiny project to a 50,000,000-strong community.” The zeroes seems to carry a hint of self-aggrandization, and something seemed off, as did its liberal use of the word “community.” Who is really using it now?

When emailing Foursquare’s communications director about MAUs, he said, “We don’t share our monthly actives or specific country-by-country breakdowns.” The geographical issue remains equally troubling for marketers – it should be one of the first questions buyers ask, along with requesting MAUs. I also brought up the 50 million figure, and Foursquare’s representative responded that more than 50 million people have downloaded their apps since Foursquare began in 2009.

I had further questions, such as whether Foursquare could confirm that 50 million referred to unique individuals as opposed to app installs. It’s hardly about semantics. I have probably installed Foursquare on ten different devices over the past five years, and at least two operating systems (iOS and Android), so does that mean I am counted once, twice, or ten times among the 50 million? Foursquare wouldn’t provide any clarity. When I followed up, the spokesperson said, “Just never felt the need to offer a deeper breakdown of our user community. One of the perks of being a private company, I suppose!” Why not add smiley face emoji, with an adorable little cartoon animal, if he’s going to be that flip?

Foursquare, the perk is over. This is a company targeting marketers, and it is holding back the most basic information that advertisers need. If a company can spend five years thinking it doesn’t need to share this, it’s deluded. Meanwhile, Foursquare won’t confirm whether it’s lifetime number refers to installs or true unique users.  Just what is Foursquare trying to hide? It should be honest with marketers, show the value of what it can be used for, and talk about the plans for growing its user base.

Marketers shouldn’t accept the status quo. In fact, marketers should be wary of conducting anything more than a pilot with a media company without that basic MAU and geographic information. This isn’t some secret project run by the Defense Department or Elon Musk; this is a company that has been courting the press and marketers for half a decade. In that time, Facebook and Twitter went public, Pinterest and Snapchat launched and garnered multi-billion-dollar valuations, and social media acquisitions have included Tumblr, WhatsApp, Instagram, and so many others. Facebook even acquired Gowalla, once billed as Foursquare’s top competitor, back in 2011.

Foursquare, meanwhile, seems to have idled. All the while, Foursquare has developed some compelling marketing offerings for local advertisers, whether small businesses or global advertisers looking to drive people to local stores. Broader campaigns for major brands, also running on Foursquare, don’t yet seem to be in its sweet spot.

Marketers, go ahead and run tests even without a lot of basic information. If a media property is brand new, great; it shouldn’t have to disclose much as long as it sets expectations. Find a partner with a relevant offering and get something in market. Even a company with a massive audience such as Snapchat can take its time releasing user data until it rolls out a well-defined offering targeting brands. If a company like WhatsApp doesn’t want to work with advertisers at all (as was its founder’s stance before joining Facebook), it doesn’t have to reveal anything at all.

Yet marketers should reward transparency and push back against obfuscation from companies that have been courting their attention, love, and money for years. If basic information isn’t forthcoming, there are alternatives. For marketers who need MAUs and other data for pilots, go on sites like AngelList, Crunchbase, Industry Index, or Partnered, and connect with more willing companies.

The free ride has to end somewhere, and a five-year anniversary seems like a great time to move on. I will try Foursquare’s app update and keep using Swarm, but Foursquare needs to finally earn my trust as someone representing marketers. If Foursquare starts treating marketers with more respect, then we can have a real dialogue. Until then, why would anyone do business with a company that considers its secrecy a perk? 

August 5th 2014 Marketing, Social Media

Want the Best Marketing Advice for Recent Graduates? Here are 100 Answers

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Know some recent grads who want some career advice? Heidi Cohen pursued a massive undertaking and reached out to a bunch of the smartest people I know or follow, plus many others new to me, and was kind enough to include me in such company. Read the full post here, and view her slideware version below.

 
While I’ll let you go to Heidi’s presentation to see my advice (slide 86), I shared some much lengthier advice at Binghamton University in December when I delivered the Commencement address. You can view it below, along with a Slideshare version should you prefer the text instead of video.

 

 

July 29th 2014 Marketing

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….



Please visit Marketing Land for the full article.

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