DMA Releases Affiliate and Ad Network Best Practices

Large advertisers are pouring more dollars into online than ever, sometimes incautiously. As a result, they’re seeing their brands turn up in all manner of unseemly places.

Perhaps naive to the shadier side of the Web media marketplace, big marketers like Vonage, Universal Studios and Circuit City have been shocked to see their ads served into such “media” vehicles as spyware generated pop-ups and junk Web pages consisting of nothing but ads. Often, the advertiser doesn’t realize it’s purchasing inventory that’s been resold three, four, or even five times.

Wishing to bring an end to the affiliate marketing practices and ad network buys that make possible such brand misappropriation, the Direct Marketing Association (DMA) today released best practices governing these channels.

The brief document (download PDF) covers five basic advisory points on the use of ad networks and affiliate programs.

In summary, the DMA encourages members to: 1) obtain assurances an affiliate or ad network is compliant with the law; 2) Perform due diligence; 3) Get it in writing; 4) Set up specific parameters for the use of their advertising; and 5) Monitor their ad placements.

The best practices document originated with a formal request by the Federal Trade Commission (FTC) to do something about the twin issues.

“The Federal Trade Commsission had talked to us specifically about advertisers knowing where their ads were placed,” Jerry Cerasale, the DMA’s SVP of government affairs, told ClickZ News. “They thought the DMA was a good place to start to try and put out some guidance on this, which is a compliment… We’ve tried to put out something that is fairly short, without a lot of hoops to jump through, that clearly states a few things.”

He said the FTC is particularly concerned that marketers lack written contracts governing their ad network and affiliate relationships.

“If you don’t have a policy in writing, the enforcement agencies don’t really think you have a policy,” he said. “That part of the five points reflects a huge push from the government.”

A drawback to simplifying the document to such a degree is it creates the impression ad networks can easily comply with media buyer requests around the disclosure and placement of media. Truth is, many ad networks don’t know and don’t care what they sell; and marketers eager to comply with the guidelines may be forced to surrender a large amount of the inventory they’re currently buying from blind arbitrage networks.

Ignoring the guidelines seems a far costlier option, however.

The nastiest ad networks and affiliate marketers buy traffic from shady site operators and spyware vendors that make scads of money from advertising while offering little value to the end user. In one example, spyware expert Ben Edelman documented how a company called Hula Direct advertised on spyware to drive traffic to a host of Web sites consisting of almost nothing but ads. Furthermore, the ads automatically reload, racking up fees but not value for the advertisers who bought the inventory.

The list of blue-chip advertisers whose ads appeared on Hula Direct Web sites included Vonage, Verizon Wireless, Universal Studios, the Weather Channel and Circuit City. A clear indication of how little some ad networks know about their own inventory is that several ad networks that resold inventory on Hula’s sites are now in the process of suing the company.

Adoption of the DMA’s new recommendations isn’t a membership requirement, but Cerasale won’t rule out the possibility of creating mandatory guidelines eventually.

But that day is far off.

“It’s hard to do guidelines on this, because the nature of the ‘Net and different kinds of operations change so quickly,” he said. “You don’t want to write a guideline just for this technology and the picture it shows today, because the technology changes. You want to go after general principles.”