Internet marketing practices are beginning to elicit serious regulatory scrutiny around a variety of consumer protection issues. This scrutiny – in the form of ongoing investigations and enforcement actions – can have significant financial consequences for marketing organizations. Moreover, the major forms of media – e.g., Google, Yahoo!, and the big social networks – are beginning to crack down on what gets advertised across their systems, for fear of becoming the next regulatory target.
Marketers that engage in deceptive and fraudulent practices not only hurt consumers, but cause real, economic harm for those that are trying to do the right thing. How do some players harm legitimate marketers? Probably the most immediate way is by bidding up CPM prices on a range of inventory, made possible by their illicit gains. For example, if a company runs an offer path luring consumers with promises of a free plasma TV (which it will rarely if ever send), and then dupes consumers signing up for subscription services, that company’s illicit profits from that offer are used to outbid the legitimate players. Or consider the mobile phone text provider that uses Santa Claus or “Find your crush!” enticements – only to confuse and essentially trick a consumer into paying $20.00 per month to receive four text messages. No “reasonable person” – the general legal standard in these matters – would support such marketing tactics, but the major Internet publishers (including the social networks) do by allowing them to run on their sites, with the result that legitimate advertising gets crowded out in the process and hundreds of thousands of unsuspecting consumers get defrauded along the way.
Why does this matter? By promoting fraudulent and deceptive offers (and reaping the outsized profits that are generated by such offers) some players get an unfair advantage versus legitimate marketers – in effect, the legitimate players are economically punished for doing the right thing. As any parent will tell you, rewarding bad behavior only encourages more bad behavior. If companies that engage in deceptive consumer marketing practices are left unchallenged, the result will be that the legitimate players will lose market share, and perhaps most importantly, consumers will be saturated with more and more fraudulent ads.
There are unfortunately many companies that do not comply with the rules. Such companies often claim ignorance of the applicable standards (notwithstanding that ignorance of the law is no defense), and/or claim that they are the victim of “rogue” publishers in their ad networks. When the rubber hits the road, however, it just doesn’t matter. Responsible marketers have an obligation under the law and business ethics to do all they can to prevent consumer abuse.
For far too long, the folks that engage in a range of deceptive and fraudulent practices have created an uneven playing field, causing real pain for the companies that are trying to do the right thing. With any luck for those of us committed to marketing integrity, the rogue players will either be forced to clean up or be squeezed out of existence along the way. Assuming that a company and its management team are committed to building a sustainable enterprise, rather than pushing a get-rich quick scheme, there is a significant commitment required to establish true integrity assurance.