Just as law and order found its way to the Western frontier of the 1800’s, legal guidelines and regulation have come to the Internet. The early days of the Internet industry may have seemed like the Wild, Wild West, but as the web has matured, so have the laws that govern how business gets done in this new medium.
After years of fragmented, often-times opposing statutes created on the state level, the federal government stepped in and began to provide more structure to the situation with the CAN-SPAM Act and FTC Guidelines for online advertising. Today’s legal landscape makes it much easier for companies to ensure they are producing truly legal and compliant online advertising.
“No company involved in online marketing today can afford to be unaware of FTC guidelines and Federal and state laws that regulate online advertising,” says Steven Richter, President and General Counsel for Media Breakaway, LLC. “The stakes are literally your company’s continued existence.”
Media Breakaway (formerly OptinRealBig.com LLC) has been doing business on the Internet since 2001, when the regulation of online advertising was still in its infancy. The company began as a small startup, selling pagers and a variety of other products online. Today, Media Breakaway generates well over $100 million in annual revenue, employs more than 40 people, and has business units involved in all facets of online marketing. The company has been at the leading edge of the online advertising industry, which naturally comes with its own challenges.
“When we became involved with online and email marketing, the legal landscape was undeveloped,” says Richter. “Like many companies, we tested a wide variety of methods to find the most effective ways to utilize the Internet to promote our products and services.”
As with many other pioneers in online marketing, the company came under fire for some of its early advertising initiatives. However, as the Internet developed, Media Breakaway became a leading proponent for the development of more structured and well-defined laws and regulations — even testifying before the federal government in support of the CAN-SPAM Act. The company also developed strong in-house compliance expertise in an effort to change the public perception of the company and the industry.
Today, Media Breakaway is recognized within the online marketing industry as a leader in producing compliant online advertising. The company regularly participates in industry conferences, giving presentations on the importance of following FTC guidelines and online advertising best practices.
“The online advertising industry is definitely maturing and an important part of that development is focusing on doing business the right way,” says Richter. “Companies that fail to evolve with the times will eventually make way for those that understand the importance of doing business in a legally compliant and ethical manner.”
One of the most revolutionary aspects of the Internet is that it has provided a generally level playing field for companies to compete with a very low barrier for entry. It has produced an unprecedented entrepreneurial boom. Seemingly anyone can start their own Internet-based business from their home, go toe-to-toe with established companies — and win.
While this environment allows entrepreneurs the freedom to launch businesses at an amazing rate, it also means that many companies are formed without the advantage of experience or expertise in a wide variety of key areas, such as marketing, distribution, and legal matters. Yet, whether a company has legal expertise or not, it is subject to the same laws and regulations, and ignorance is not a strong defense when the FTC calls to discuss why your company’s online advertising efforts don’t meet their compliance guidelines.
One development that should have all online marketers on their toes involves the FTC’s ability to target every company involved in the use of a non-compliant ad. This has a special impact on the Affiliate Marketing industry. According to the FTC, if an Affiliate creates and promotes an Advertiser’s offer utilizing a non-compliant online ad (banner ad, email, etc.), under certain circumstances, the Affiliate Network and the Advertiser may also be held liable.
Not every online marketer can afford to have in-house counsel or keep a law firm on retainer (in fact the vast majority can’t). So, how does a sole-proprietor, two-person startup or other small company make sure they are following all the appropriate rules and guidelines?
“Talk to your networks. Every reputable Affiliate network should have the expertise in compliance issues to help ensure that their Affiliates are adhering to all applicable laws and guidelines,” said Richter. “If your network can’t help you in this regard, you may want to consider whether they are a company you want to work with.”
Many Internet industry conferences provide educational sessions and presentations on advertising best practices, which can help to companies and individuals looking to learn more about compliance matters.
The days of the Wild, Wild West (“www”) are over, but today’s online industry offers companies the opportunity to build their businesses in an environment that better protects the rights of the consumer. Companies that learn to work within the more structured legal framework will continue to generate opportunities for success — while those that don’t will find it increasingly difficult to prosper.
For more information about Media Breakaway’s Affiliate Marketing services, please visit www.CPAEmpire.com or www.MediaBreakaway.com.