This article highlights some of the key negotiation points in mobile ad network agreements and provides some tips for minimizing legal risk.
For affiliate marketers, the mobile channel promises to engage consumers like never before. With a wide variety of ad units, tracking and targeting technologies, and network marketing models, mobile has the potential to dramatically extend advertisers’ reach and improve ad-spend ROI. However, this opportunity comes with its share of legal risk, especially when working with large mobile ad networks. This article highlights some of the key negotiation points in mobile ad network agreements and provides some tips for minimizing legal risk.
As is true in the desktop world, traffic quality is the paramount concern for mobile affiliate marketers. If you’re buying traffic on a CPM basis and getting paid on a CPA basis, bad traffic can be economically devastating. Consequently, marketers should get a firm representation from networks that all apps and WAPs (i.e., “publishers”) in the network will (1) comply with a set of content restrictions that suits your marketing objectives (e.g., no incentive, gambling) and (2) prevent fraudulent traffic (e.g., bots, click farms). Often, networks attempt to soften their obligations in this area by only committing to exercise “reasonable” efforts to ensure publisher compliance. Another tactic is for networks to merely agree to contractually require their publishers to comply. In either case, you’re getting weak representations from the network, enabling it to wiggle out of direct liability and shift blame to the publisher, a party with whom you do not have a contractual relationship and who may not even be around long enough to redress your harm.
Privacy and data security are also significant sources of legal risk in the mobile ad network space. Networks feed their targeting algorithms by purchasing user data via the network’s apps. There is, of course, a wealth of data available through apps, including location data, device identifiers, and contact lists. User data is the central piece of the targeting puzzle, and it’s part of what makes mobile affiliate marketing so compelling; but if this data isn’t collected and stored properly, it can present significant risk. Consequently, marketers should expressly require networks to collect all user data in compliance with the network’s and the apps’ privacy policies. Additionally, networks should store all user data in an encrypted format to limit liability for data breaches, which are all too common these days.
Other key areas for mobile affiliate marketers to focus on in mobile ad network agreements are:
- Use of Third-Party Ad Networks – Can degrade traffic quality and increase legal risk.
- Creative Modification – Networks should not modify advertising creatives.
- Offsets and Penalties – Can provide an effective way to enforce network compliance.
- Termination/Suspension Rights – Provides optimal contractual flexibility.
- App Disclosure/Traffic Segmentation – Ensures you’re getting what you pay for.
- Reporting – If the network requires you to rely on its reporting, marketers should require the network to contractually stand behind the accuracy of its reporting.
This is only a brief overview of some of the legal issues associated with mobile ad network agreements. For important agreements, always retain experienced counsel.
Slade Cutter is a partner at Wittliff Cutter Austin, PLLC in Austin, TX, where he practices Advertising Technology and Privacy Law. Slade can be reached at (512) 960-4867 or via email at slade@wittliffcutter.com.