Last week, it was announced that Google through its DoubleClick platform, would be offering programmatic buying opportunities for advertisers looking to place audio ads into online streams. While that system is initially being rolled out among the big digital audio services, if it or other similar platforms are expanded more broadly, it could bring more advertising into internet radio, podcasting and other digital audio program channels. But, being the spoilsports that we tend to be as lawyers, we wanted to pass on some issues to consider in accepting programmatic buys – whether in online streams or in over-the-air broadcasts. The immediacy of the audience’s perception of an audio insertion into a program stream can bring unintended results – some of which may have legal consequences.
We have already written about the issues for some of the programmatic buying platforms that are inserting ads into broadcast radio and television programming. As we wrote here and here, these ads can potentially impact a broadcaster’s legal compliance – particularly in the area of political broadcasting, where these ads could affect a station’s lowest unit rate, as well as reasonable access, equal opportunities and even political file disclosure obligations. While none of these FCC issues apply directly to online ads, as we wrote here, there are potential rules on political advertising that may soon be applied to online ads, either through actions by the Federal government or by the enactment of rules to implement a recently passed New York State law that compels disclosures for online political ads similar to those required by the FCC for broadcast ads. There are other considerations as well.
When we wrote about the impact of programmatic buying on broadcast ads, we mentioned the concern about complying with the FCC’s sponsorship identification rules. While the FCC’s rules apply only to over-the-air broadcasting, the Federal Trade Commission (FTC) has similar disclosure obligations for online ads. See our articles here and here for more details. While one might expect that these sponsorship identification issues would be the responsibility of the advertiser, the insertion of the ads into online streams may make the ad seem more like part of the programming offered by an Internet radio company or digital audio provider. Even were the FTC to look only to the ad provider for liability purposes (which is not a certainty), there may be inquiries first to the platform on which the ad is hosted, which may cost, if nothing else, time and money to respond.
Similar issues may arise with other types of advertising. While the typical direct advertiser coming through an advertising agency is likely to be familiar with the ins and outs of other advertising rules (e.g., disclosure of credit terms on leases; making health claims about certain types of unproven drugs, vitamin products or even vaping products; comparative advertising disclosures; ads containing celebrity endorsement and testimonials, etc.), an ad placed directly though some programmatic platform by a local business may not be as sophisticated in complying with all these advertising limitations.
Even outside the legal issues that may arise, there may be business concerns when advertisers have direct access to automatically place their ads into your online advertising. If, for instance, you are running a Christian music webcasting operation, you can imagine various categories of advertising that you would not want to find inserted into your stream – and certainly there could be an audience reaction. That has been an issue from time to time with various website operators who find an ad service has placed an unwanted banner ad on its site conveying a message antithetical to the message that the site owner is looking to convey. A negative reaction is even more likely should an audio ad conveying an unwanted message pop up in your stream.
Does that mean that programmatic ads should not be taken? Likely not, as they are an important method for attracting more new advertising to your online audio products. But, as with any other new product, make sure proper protections are in place to avoid having material placed into your stream that has not been vetted in some way to insure compliance with the law and with any message that you are trying to convey through your online audio programming.