Huge uptake of internet video advertising

As reported yesterday in the Sydney Morning Herald by Paul McIntyre, three major Australian carriers of internet video and internet video advertising all affirm the trend.

"yahoo7logo"Yahoo7 says video ads are its fastest growing revenue area and streamed more than 5 million video ads last month. According to CEO Ian Smith, Yahoo7 has increased its video ad commitments from about 5-7% to 50% of deals.
"fairfaxdigitallogo"Fairfax Digital showed nearly 4 million video streams in June, a record for its sites. It runs one video advertisement every 3 clips and according to its general manager Liam Walsh, receives “very few complaints.”
"ninemsnlogo"Ninemsn averages 6 million video streams each month</span>; being 1 million unique users who view an average of 6 video clips a month. These users see one “pre-roll” video ad every 2 clips, which McIntrye calls an aggressive ratio.

Chris Gilbey, CEO of Australian Web 2.0 start-up Vquence, couches the changing market landscape in strong terms: “TV lost its dominance in media to the Internet in the last few years. It still holds absolute sway as a medium, but the trend is away from TV. It’s to the Internet. The trend for information, for entertainment, for engaging in community – the Internet.”

We have long tracked developments in internet advertising.

The balance of this article contains sobering observations on laws relevant to internet video advertising. While there is an opportunity for advertisers, there’s also a need for a reminder that the internet’s rapidly evolving and unpredictable environment heighten the need for legal risk management.

Who is affected by internet advertising law?

You need to be aware of the laws if your role is to be an:

  • advertiser – placing ads on sites;
  • advertising creative – creating text, photo, Flash, video or other content for ads;
  • advertising server – serving ads to the servers of internet content hosts;
  • internet content host – running a content site on which appear ads by others; and
  • internet service provider – carrier or go between connecting users and advertisers.

Basic legal principles from traditional marketing law

Whatever you role, you’ll benefit from or be potentially affected by the short list of legal principles below.

1. Don’t turf the old rule book.

By and large, in most aspects the law treats the internet as simply another medium. You must still comply with virtually the same laws that print or television ads must comply with. A non-exhaustive list of such laws includes trade practices law, trade marks law, copyright, moral rights, defamation, privacy law and advertising codes of practice. Generally, err on the side of caution given the very real jurisdictional issues discussed in point 3.

2. Put it in writing

If you commission the production of an ad campaign, ensure the intellectual property and other rights, permissions and releases are obtained in writing for use on the internet. Check restrictions imposed by graphic designers, directors or other creative contractors.

3. Think global

As the internet crosses all borders your advertisement can be accessed from multiple legal jurisdictions. Laws differ, even at a state level in Australia. Another issue sometimes is – which jurisdiction’s law is to apply? There are many variations, even this list of seven points does not apply to the same extent in all countries. You must customise jurisdiction by jurisdiction.

4. Identify yourself

Ensure business or trading name registrations are in place and displayed correctly. For example, under the the Corporations Act 2001 (Cth) a company in Australia must be identified and must display its Australian Business Number (A.B.N.) in various places.

5. Be alert

Marketing law considerations increase for advertising of tobacco products, pharmaceuticals, alcohol, gambling and lottery services, competitions, financial services, products for children, weapons, erotica, and certain professional services.

6. Check industry advertising codes

A recent furore over a Bondi Blonde beer as illustrates this point. In “Illegally Blonde”, on 7 June 2007The Sydney Morning Herald reports: The racy ad … depicts a bikini-clad blonde emerging from beneath the waves as Koby Abberton, champion surfer and Bra Boy, stands in the surf drinking the beer. “You know what they say – nothing goes down like a Bondi Blonde,” says the voiceover. Although the regulator ordered the ad’s removal, it continues to play on the Bondi Blonde website and on YouTube, where it appears with the boast that it has “not been approved”. In its determination the adjudication panel of the Alcohol Beverage Advertising Code (ABAC) slammed the ad for courting publicity and jeopardising the self-regulatory system, a situation it is now determined to stop.

BlueTongue Brewery Pty Ltd argued because the ad is on its website (and not paid-for media) it is not covered by the code. Meanwhile it has apparently taken the Bondi Blonde website.

7. Moderate use of web bugs

Web bugs are one of many terms used for undisclosed online or email software which track, monitor and report back information on the habits of users. There can be very good reasons for use of Web bugs, eg to customise websites. The Privacy Act 1998 (Cth) imposes various obligations on those collecting, using or dealing with someone’s personal information through its National Privacy Principles (NPPs). This includes the responsible use of information, keeping the information secure, and providing individuals access to their personal information.

There’s a revolution in the update of video technology online, but as the above list illustrates legal considerations for marketing and advertising remain relatively constant across different mediums.

Noric Dilanchian