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Legal considerations for digital and programmatic advertising

Digital advertising spend in the UK is in the £billions. Increasingly, it is the primary route through which businesses engage with and sell to existing and potential customers, recognising that these customers spend much of their time on their smart phones and generally online.

Digital advertising is heavily regulated in order to protect those customers, their data and their privacy. If you use or are contemplating using digital advertising, then you must be aware of these regulations and also of the risk of advertising fraud and the need to protect your brand.

This article discusses some of these important legal risks and considers how to mitigate them. And remember, as a publisher or advertiser, if you’re unsure on how to approach a deal or overcome key negotiation points, then our technology solicitors are on-hand to help.

What does digital and programmatic advertising include?

Digital advertising is the promotion of a brand, product, or service through digital channels. These channels include web browsers, social media pages, blogs, apps, and/or any other form of contact through the Internet. Digital advertising includes search engine marketing, display advertising on websites common to a particular audience, social media ads and e-mail marketing.

Programmatic advertising is a form of digital advertising where digital advertising space is bought automatically, with computers using data and algorithms to decide which ads to buy and how much to pay for them, often in real time. For example, rather than buying a million impressions on one particular site over a period of time, you can buy a million impressions across multiple publishers or media owners, targeted at a particular audience segment and how they interact with the Internet on a particular day and at a particular time.

What are the key risks and how are these managed?

a) Key risks

One of the most significant risks associated with digital advertising relates to privacy and data protection. With technology’s ability to gather and analyse vast amounts of data, there is a risk of personal information being misused or compromised leading to identity theft, fraud, and loss of trust in businesses and brands. Data protection legislation exists across many countries and regions to protect a person’s data and privacy.

An associated risk relates to the content of the advertisements. Advertisers must ensure that their advertisements comply with any applicable regulations that deal with ad content in order to protect consumers from ads that are misleading, inappropriate or offensive.

b) What are the key regulations?

In the UK, The Data Protection Act 2018 is the UK's implementation of the General Data Protection Regulation (GDPR). This means that everyone responsible for using personal data has to follow strict rules called 'data protection principles'. They must make sure the information is used fairly, lawfully and transparently.

In addition, the Privacy and Electronic Communications Regulations (PECR) sit alongside the Data Protection Act and the UK GDPR. They give people specific privacy rights in relation to electronic communications.

Specific legislative consideration has also been given to the vast number of children who interact online. In the UK, this is in the form of the ICO Children’s Code.

There are also a number of bodies that issue industry standards and codes for the digital advertising industry across both data protection, privacy and content. These include:

  • the Internet Advertising Bureau UK (IAB UK); and
  • the Advertising Standards Authority (ASA) which is the UK’s independent regulator of advertising across all media. The ASA apply the Advertising Codes, which are written by the Committees of Advertising Practice (CAP).

This is an ever-developing area of law and regulation, with legislation on its way in the UK in the form of the Online Safety Bill and the Digital Markets, Competition and Consumers Bill.

c) What does this mean for you?

In a nutshell, this means putting in place systems and processes to ensure that customers and their data are dealt with transparently, fairly, with any necessary customer consents and in compliance with all the relevant legislation and standards/codes. It also means ensuring that any contracts you put in place recognise and assign responsibility for the proper and lawful treatment of data and customers.

This can feel like a daunting task, given the breadth of the legislation and standards/codes. At Harper James we are accustomed to advising on such matters and aim to strike a balance to allow you to carry on your business, including through relevant promotion and advertising whilst complying with applicable legislation and standards/codes.

What is advertising fraud?

Advertising fraud is the practice of inflating impressions, clicks or conversion data, wasting your advertising budget. It covers a broad range of activities including:

  • Click fraud: where individuals or bots deliberately click on an advertiser’s pay-per-click (PPC) ad with no intention of buying the product or service;
  • Domain spoofing: where someone sells their fake site as legitimate and, typically, highly sought-after, resulting in advertisers paying premium prices for low-quality ad space.
  • Ad stacking: where several ads are placed on top of one another in one space. The ‘publisher’ collects revenue for impressions claimed by each ad, even though the ad at the top of the stack is the only one visible to the user. 

Related to advertising fraud is brand protection and in particular, ensuring that your ads are not displayed next to material or on websites that are inappropriate or offensive. This is a particular concern where ads are displayed on platforms with user-generated content, such as many social media channels.

How do you deal with advertising fraud and brand protection?

Tackling advertising fraud and brand protection involves utilising any technological solutions to monitor and deal with suspicious activity, common sense and any applicable legal measures.

Common sense measures include:

  • Working with only reputable companies or certified agencies;
  • Scrutinising and adhering to any blacklist information;
  • Scrutinising who is involved in the advertising process and having clear and transparent arrangements in place with each;

Contractually, any contract between you and any publisher will commit the publisher to employ appropriate brand safety techniques and not to do anything detrimental to the reputation, image or intellectual property (IP) of the advertiser/client. In addition, any contract should be clear and transparent about metrics.

Other points to note

It is important to have all applicable IP rights in place in order to protect your brand and/or product/service before you contemplate any form of digital marketing.  IP might include:

  • Trade mark(s)
  • Copyright
  • Design rights
  • Domain name protection
  • Patents

Harper James is used to working with clients on appropriate IP. Please see our Harper James IP strategy service for more information on how we can help identify, protect and leverage your intellectual property.

Digital and programmatic advertising create opportunities to reach customers in a space that is relevant to them and also in real time. As highlighted in this article, there are also risks and regulations to navigate. If you are contemplating digital or programmatic advertising, please contact your Harper James team in order to put in place relevant systems, processes and safeguards.

What next?

Please leave us your details and we’ll contact you to discuss your situation and legal requirements. There’s no charge for your initial consultation, and no-obligation to instruct us. We aim to respond to all messages received within 24 hours.

Your data will only be used by Harper James Solicitors. We will never sell your data and promise to keep it secure. You can find further information in our Privacy Policy.

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