Download Mobile Marketing – What Does It Include?

Marketing On The Go:
Legal Issues in Mobile Advertising
Douglas N. Masters
Nerissa Coyle McGinn
February 3, 2011
LOEB & LOEB Adds Value
©2011 LOEB & LOEB LLP
The Next Big Thing is Here (and Everywhere)
 4.1 Billion mobile users worldwide.
– More mobile phone subscribers in the
world than landline phone
subscribers.
 There are 285 million wireless subscribers
in the U.S.—91% of population
 Mobile web will be bigger than desktop
Internet use by 2015 due to current rate of
change and adoption – Morgan Stanley
 U.S. mobile application revenue is
expected to reach $1.6b in 2010 and climb
to $11b in 2014 according to the Yankee
Group.
 Gartner predicts that $7.5 billion will be
spent annually on mobile advertising by
2012 and mobile applications will be the
primary vehicle that drives a substantial
portion of that market.
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What does Mobile Marketing include?
1. Marketing that includes interactivity
and location based services
2. Buying Ad Space On Websites That
Are Configured For Access By Mobile
Devices (Sometimes Called
WAP-Enabled Services).
3. Advertising Tied To Content And
Mobile Apps.
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Mobile Marketing – What Does It Include?
Marketing That Includes Interactivity or LBS.
 Sending a promotional
message, alert, or
account update to a
user via text message.
– Chicago Bulls Mobile Alerts.
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Mobile Marketing – What Does It Include?
Marketing That Uses Interactivity or LBS.
 Entering a contest or
sweepstakes or
casting a vote via a
text message.
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Mobile Marketing – What Does It Include?
Marketing That Uses Interactivity and LBS.
 Using global
positioning system
(GPS) technology to
send promotional
messages to mobile
devices that are
relevant to the user’s
location.
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Mobile Marketing – What Does It Include?
Marketing That Includes Interactivity or Location Based Services.
 Delivering coupons to a
mobile device that can
be read by a scanner
and redeemed at a
store.
– Shopkick listed as Top 10
App of 2010 by Wall Street
Journal One of the 10 Apps
to watch in 2011 by
Mashable.
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Mobile Marketing – What Does It Include? WAP Advertising.
 Buying Ad Space On
Websites That Are
Configured For Access
By Mobile Devices
(Sometimes Called
WAP-Enabled Services).
– AdMob bought by
Google for $750 Million.
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Mobile Marketing – What Does It Include?
Advertising Tied To Content And Mobile App.
 Creating a mobile app
that promotes a
product or event.
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Mobile Marketing – What is it?
Advertising Tied To Content And Mobile Apps.
 Sponsoring a mobile
app that appeals to a
marketer’s
demographics.
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Mobile Marketing – What is it?
Advertising Tied To Content And Mobile Apps.
Product placement
in games played.
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Mobile Marketing – What is it?
Advertising Tied To Content And Mobile Apps.
Providing songs or
other recordings for
use as ring tones
(which may be tied to
a product or event,
such as a recently
released movie).
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Mobile Marketing – What is it?
Advertising Tied To Content And Mobile Apps.
Buying ad space in third-party mobile
apps that appear before, during or
after use of the mobile app.
Advertising tied to streaming of live
broadcasts.
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Mobile Marketing – The Regulatory Landscape
 Federal and state telemarketing
and email laws.
 Federal and state advertising
laws.
 Mobile Marketing Association
guidelines.
– De facto laws because so far not many
laws directly regulate mobile marketing.
 Child protection registries in Utah
and Michigan.
 State Attorneys General and civil
litigants.
 Wireless carriers have their own
standards and rules.
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Which Laws Apply?
How a message is sent determines what law(s) apply.
 SMS (short message service a/k/a test message) sent to a
wireless telephone number = TCPA (Telephone Consumer
Protection Act, a federal telemarketing law).
 Voice call (live or recorded) to a wireless telephone number =
TCPA.
 Email sent to an email address that contains a wireless
telephone number and a wireless carrier’s domain name =
CAN-SPAM (federal commercial email law) + TCPA (maybe).
– For example,
[email protected]
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Text Messaging
 Opt –In Required. Single opt-in for standard text messages;
double opt-in for premium text messages (MMA Guidelines) Opt-in
must include:
–A clear communication of the financial obligation the consumer is
about to incur by entering the program (MMA Guidelines);
–Disclosure of the name of the entity that will be sending the text messages and,
if different, the name of the entity advertising the applicable products or services
when obtaining the consumer’s consent. (TCPA); and
–Instructions on how to opt-out of the program (MMA Guidelines
 Scrub against the Do Not Call Registry every 30 days. (TCPA)
–If on the registry cannot call without an established business
relationship.
 No automatic dialer without prior express consent.
–No Established Business Relationship exception
 Opt-Out Mechanism Required (TCPA and MMA Guidelines)
 If a service, must be allowed to cancel at anytime. (MMA
Guidelines)
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Text Messaging
 A subscriber can stop participating and receiving messages from any
program by sending STOP to the shortcode used for that program.
(MMA Guidelines)
–END, CANCEL, UNSUBSCRIBE or QUIT should also be opt-out key words
for all programs; however, content providers should feature the word STOP
in their advertising and messaging.
–The opt-out keyword STOP sent by the subscriber cannot be case sensitive.
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Text Messaging
 Notice – Inform the user of the marketer’s identity or products
and services and the key terms and conditions that govern an
interaction between the marketer and the user’s mobile device.
 Privacy
–Customization & Constraint – user information collected for
marketing purposes should be used to tailor marketing to the
interests of the mobile user; mobile marketers should target and limit
mobile messages to that which users have requested.
–Security – mobile marketers must implement reasonable technical,
administrative and physical procedures to protect user information
from unauthorized use, disclosure or access.
 State Child Protection Registries – If advertising pornography,
alcohol, firearms, or tobacco products, scrub against the Utah
and Michigan child protection registries.
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Text Messages
 Fragmentation and varying platforms create
challenges for advertisers.
– Different handsets and different protocols used by the wireless
carriers mean ads are displayed differently on each device –
might require advertisers to provide multiple versions of ads to
the mobile aggregator.
 Carrier Specific Rules.
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No profanity or sexually explicit images or language.
No defamatory material.
Nothing that facilitates an illegal activity.
No false or misleading advertising.
Nothing that would infringe someone’s IP rights.
No parody of wireless carrier’s products or services.
E-Mail and CAN-SPAM
 Applies very narrowly – only to email messages sent to an address
that includes a wireless telephone number and a wireless carrier’s
domain name.
–
FCC maintains a list of wireless carrier domain names; marketers should
scrub against the FCC list.
 Marketer must get prior express authorization from recipient to send a
message.
 CAN-SPAM disclosure and opt-out requirements apply.
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–
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Identify message as an advertisement
Notice of right of opt-out and opt-out mechanism
Physical Address of sender.
 TCPA might also apply to this type of message – an Arizona court held
that such a message is a “call” and subject to TCPA.
–
Joffe v. Acacia Mortgage Corp. (Arizona Court of Appeals 2005) – court said this type
of message is a call because result is that an email is translated into an SMS message
and is forwarded to a cell phone.
 Privacy Issues
 State Child Protection Registries
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Location Based Services
 Privacy laws apply.
– The FTC Act which prohibits unfair and deceptive practices.
– The Gramm-Leach-Bliley Act which applies to financial
information.
– HIPPA which applies to medical information.
– State privacy laws such as California On-line Privacy
Protection Act.
– COPPA.
 Potential Do Not Track Proposal by FTC.
– The FTC believes the existing choice mechanisms for
behavioral advertising have fallen short. Therefore, the
FTC suggested having an opt-out option for behavioral
advertising.
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Location Based Services
Tips for Location Based Services:
 Follow Your Own Policy
– Two class action lawsuits against Apple and Application Providers for
sharing UDID (Unique Device ID) with advertisers filed in December,
2010.
 Give consumers notice.
– Adequately and clearly disclose what data is collected and for what
purpose.
 Reasonably safeguard data.
– Technical.
– Administrative.
– Physical.
 Give consumers notice and opportunity to opt-out of a changed
policy.
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Push Notification Services
 TCPA requirements for text
messaging apply.
 Mobile Marketing Association’s
Guidelines.
 Privacy laws.
–Who owns the information? For
instance, Apple’s push notification
system involves Apple acting as
intermediary. Who owns data? What
are the obligations of intermediary?
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Mobile Marketing and Sweepstakes
 Is text messaging
consideration?
–MMA Guidelines state that
Consideration may be monetary
or non-monetary. Therefore, if
there is a premium text message
charge, must provide an
alternative method of entry.
 Disclosure of rules.
–Should provide information in
initial message on how to find
official sweepstakes rules. (MMA
Guidelines)
 Poorly written sweepstakes rules
will result in delays in wireless
carrier approval.
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Promotional Subscriptions
 Clearly disclose the terms of the transaction and any fees that
may be charged, including indirect fees such as text
messaging charges levied by a wireless service provider.
 Avoid using promotional terms such as “free,”
“complimentary,” or “no charge” if consumers may be
subjected to fees from their wireless service providers or any
other parties.
 Avoid using pre-checked boxes for accepting the terms or
conditions of an offer. The consumer should be required to
affirmatively opt-in to the subscription.
 Include valid methods for the consumer to terminate a
subscription or challenge a fee.
 Special notices if automatically renewing.
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Mobile Coupons, Premiums and Promotional
Offers
 MMA and DMA need prior consent
from consumer to send mobile
coupons.
 MMA and DMA require advertiser to
notify consumers of the identity of the
product/service and key terms and
conditions of the offer.
 Applicable laws for coupons.
 Potential LBS issues.
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Questions
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