When: 16 May 2013
Where: United Kingdom
Law stated as at: 4 June 2013
PhonepayPlus (PPP) has certainly been busy drafting consultation papers! After launching a second public consultation in April 2013 regarding a proposed prior permission regime for Information, Connection and/or Signposting Services, PPP was then straight onto the next consultation a month later. This time, it is digital marketing in PPP’s spotlight. PPP has focused on this area as it has experienced a 100% rise in complaints relating to the online promotions of Premium Rate Services (PRS).
Background to the consultation
PPP states in the consultation paper that it receives around 350 complaints a month about digital marketing. In 2012 it imposed fines totaling £1.38 million against ten companies that used misleading promotions to market their services.
PPP has indicated it is particularly concerned about how some PRS providers use affiliate marketers for their campaigns as PPP believes some techniques used by some such affiliates in the push to drive traffic and earn their commission are “inherently misleading”.
To illustrate the cause for its concerns, PPP gives the example of promotions promising free content which in fact has costs attached to it and the promotion of chances to win non-existent prizes.
Further guidance to be targeted at use of digital tools to promote services
PPP has previously issued Guidance on Promotions and Promotional Material which can be located here.
PPP now wants to issue further guidance on digital marketing practices to supplement (not replace) this existing Guidance and it shall be particularly aimed at PRS providers who use digital tools to promote their services.
For the purposes of this consultation, PPP sees ‘digital marketing’ as being marketing that “uses electronic devices such as computers, tablets, smartphones, standard mobile phones, digital billboards and/or game consoles to promote goods and services or otherwise engage with consumers and other business partner”. PPP’s intention is that the new guidance will help PRS providers ensure that any digital marketing they engage in – whether directly or through third parties – is done in a legitimate way that promotes genuine consumer engagement and which does not mislead or harm consumers.
PPP is particularly concerned with the increased use of misleading digital marketing practices involving the following techniques:
• clickjacking (also known as ‘User Interface redress attack’ or ‘UI redressing’ and which is a technique of tricking a web user into clicking on something different from what the user perceives they are clicking on);
• likejacking (which is a technique of tricking users of a website into posting a Facebook status update for a site they did not intentionally mean to “like” via Facebook);
• misleading SEM/SEO;
• misleading banner ads, pop-ups and pop-unders;
• content-lockers; and
Many of these methods cause consumer confusion and subsequent harm as they mimic trusted brands, give false reasons to consumers for providing MSISDN details which will result in a charge, and involve a lack of transparency as to pricing terms or the exact frequency and terms of charging associated with the services being indirectly promoted.
Focus of the new guidance
PPP has indicated that its intention is that the new guidance to be issued advises PRS providers to:
• ensure that consumers are presented with all “vital information”, including the price, relating to a PRS service before they commit to purchasing it;
• not intentionally mislead consumers into purchasing a PRS product that they may have had no intention of purchasing;
• make sure consumer consent is provided “knowingly and clearly auditable”; and
• introduce appropriate controls and due diligence processes on affiliate marketing partners or other digital lead generation partners as the PRS service provider retains responsibility for the marketing of its PRS services.
Particular techniques targeted
Here is how PPP has proposed certain potentially misleading marketing techniques will be viewed under the new guidance:
1. Typosquatting: Paragraph 2.3 of the draft guidance sets out PPP’s expectation around typosquatting and states “As set out in Rule 2.3.2 of the Code, providers must not mislead consumers. If a provider were to align itself with or imitate another brand to which it does not have an association, in a way that is likely to mislead consumers about the nature of the service being offered, a PhonepayPlus Tribunal is highly likely to consider it in breach of Rule 2.3.2.”.
2. Clickjacking: Paragraphs 3.3, 3.4 and 3.5 of the draft guidance state “As set out in Rule 2.3.2 of the Code, providers should not mislead consumers. This includes linking to a website offering PRS without consumers’ prior knowledge. Consistent with Rule 2.2.1, all PRS promotions should be as open and transparent as possible, allowing consumers to make an informed choice. Where a PRS promotion is linked to from another website, the link should be open and transparent, allowing consumers to make an informed choice – we believe that consumers should not be deliberately misled into visiting websites that they did not intend to. Promotions should clearly state what the service offered is, how it operates and its cost, displaying relevant key information in a visible, legible and proximate format. Consumers should be fully aware as to what they are engaging in before any charging commences”. PPP indicates any provider that fails to meet its expectations is highly likely to be found in breach of the Code by a PhonepayPlus tribunal.
3. Banner ads and pop-ups: PPP indicates that to ensure consumer protection and assist industry maintain confidence in the market, it considers it to be best practice to inform consumers of the price of a service at every stage of a promotion. However, PPP appreciate that it may not always be technically possible to inform the consumer of the price on all banners ads, pop-ups and pop-unders, so as long as consumers are adequately informed of the price, or any other key information, prior to the point of purchase, this is likely to be compliant with the Code. By contrast, when a banner ad, pop-up or pop-under leads to a website where pricing information is not clearly stated, the provider is highly likely to be found in breach of the Code. As such, providers are “urged to cater for the fact that consumers may not have been adequately informed of price and other key information before reaching their website”.
4. SEM and SEO: To ensure Code compliance, the new guidance suggests: “Providers are expected to use adwords or meta tags that are accurate descriptors of the service being offered and should not mislead consumers either about the cost or the nature of the service. For example, where the meta tag ‘free’ is used, all or at least the majority of services being promoted should be free. If none or only a minority of services being are free, a PhonepayPlus Tribunal is highly likely to find such practice in breach of the Code. Any reference to a brand or company to which the provider is not associated is also likely to be considered misleading if it confuses consumers about the nature of the service being offered”.
Guidance on use of affiliate marketers
Finally, where the use of affiliate marketers as part of a campaign is concerned, the draft Guidance makes it clear that PPP expects PRS to undertake effective due diligence on any affiliate network and marketer that they are seeking to engage and to place clear expectations on their affiliate networks, marketers and/or other lead generation partners around PPP Code compliance as part of any contract signed.
PRS providers will need to show that they make it clear to affiliate marketers that price and other key information should be clearly stated as part of a campaign, the marketing techniques to be used must not be intentionally unrelated and misleading in respect of the PRS product being promoted and that affiliates must not use any of the practices highlighted by PPP in the draft Guidance as being potentially misleading.
PPP also recommends that PRS providers utilise effective tracking and monitoring tools and audit their affiliate marketing periodically, regardless of activity, to ensure that is both effective and compliant. PPP refers to the Internet Advertising Bureau’s best practice guidelines on how to conduct an affiliate audit which can be found here.
Why this matters:
For PRS providers and all other interested parties, the consultation period closes on 27th June 2013 and PPP has encouraged responses to the queries raised in the consultation paper to assist with the shaping of the new guidance on this area.
The aim of the new guidance is to assist those involved in providing PRS to comply with their responsibilities. Nothing in the guidance to be launched should be particularly new seeing as it will reflect the legal and regulatory provisions any advertising needs to adhere to anyway to ensure it is not misleading and is lawful.
What it will mean is greater guidance to PRS providers to ensure regulatory compliance, which should assist with consumer confidence in PRS. What will be particularly useful is the indication PPP provides within the guidance as to its likely interpretation of the PPP Code rules in relation to specific service types and marketing techniques.
PPP’s guidance does not form part of the PPP Code and is non-binding on the decisions of PPP Tribunals in the event of an investigation.
However, PRS providers who have not followed PPP guidance relevant to the service under investigation will be invited to explain how they have complied with the Code by other means. It is therefore best practice for PRS providers to pay careful attention to any new guidance to be issued.