Agreement Types

• Ad Server. The ad server is a platform for serving ads. The primary obligations of the ad server is to have an efficient and reliable system. Therefore, it is important to specify performance criteria, like uptime, and to describe access to and response commitments for support if problems arise. With online advertising – time is money – therefore when ads are not properly served or the system is down, the website loses revenue for ads not served. This type of failure should directly translate into compensation from the ad server to the website. The ad server is also the source of information and data relating to impressions served and clicks made. This information is the basis upon which advertisers will be charged, and therefore, must be accessible, current, accurate and auditable. What follows is that ad servers possess large quantities of valuable data and the ownership of this data, as well as the security systems in place to protect this data, should be specified in an agreement.

• Ad Network. An ad network signs up advertisers and seeks out websites, mobile networks and other media to which to sell advertising. From the advertiser’s perspective, the ads need to be served to relevant locations that are pre-selected by the advertisers. From the website’s perspective, it wants to verify that ads are appropriate (and certainly not inappropriate, illegal, or likely to result in liability). Therefore, ideally, a website would want the right to pre-approve all ads that will be served. However, this is often not practical given the volume and method of selection. An alternative is that the ad network (1) agrees not to serve ads that are violent, pornographic, etc., (2) allows the website to pre-select the types of ads that will be served and (3) will remove or cease to serve ads immediately upon a request from the website. A sensitive issue is the allocation of risk and liability arising from ad content. It is reasonable for a website to get an indemnification from the ad network for liability arising from illegal, infringing, libelous, etc. content. However, an ad network may want to limit this liability to the extent that it has indemnifications from the advertisers.

• Publisher Network. A publisher network is the counter part to the ad network. In a publisher network, an entity represents multiple websites, often with similar themes, and seeks to sell advertising that will appear on the publisher network. This can arise because a single website has limited advertising inventory available. Therefore, it can sell much more advertising inventory when working with the network.

• Insert Orders. Insert orders are the terms and conditions that define the relationship between advertisers and either a website, an ad network or a publisher network. An insert order should contain the commercial terms relating to the ad campaign, and should also contain provisions relating to (1) advertiser indemnity regarding liability arising from ad content, (2) definition of ownership and rights relating to data on ad performance, and (3) limit the liability of the website/network for failure of ads to be served.

• Linking. Generally, no permission is required to link out to another site. However, linking agreements can be useful in cases where one party wants to require another to link out to it and thereby create traffic. For example, where a vendor wants to require companies that it has granted distribution rights to link out to it. This allows the vendor to try and up sell to the distributor’s customers. It is common for certain software applications to have both free and charged for versions. The free versions may be offered to customers through OEM arrangements. However, the vendors goal is to convert customers to the charged for version. Therefore, it wants to require its distributors to place a link on their sites. The mere requirement to place a link will only be useful if it is accompanied by placement specifications. Otherwise, it can simply be buried in the website, never seeing the light of day.

• CAN-SPAM Act of 2003. Under the Act, unsolicited messages must identify the message as an advertisement or solicitation, provide a valid physical postal address and provide clear and conspicuous notice to recipients of their right to opt-out of future emailings. Additionally, commercial messages must provide recipients with a valid return email address or other mechanism that remains operative for at least thirty (30) days after the time the message is sent, to allow recipients to opt-out of future emailings (and must honor such requests within ten (10) business days of receiving them) and refrain from using misleading subject headings or other header information. If a recipient opts-out, it is prohibited to subsequently send messages to the recipient or to sell or transfer the recipient’s email address to any third party for the purpose of further solicitations. Under the CAN-SPAM Act the FTC regulates and criminalizes unsolicited commercial email communications, but the Act does not provide a private right of action. However, state laws on false or deception behavior, trespass, contract breach, tort, fraud, and computer crimes may provide a private right of action for spam. The Act only applies to commercial communications. Also, messages that are transactional or relationship based are not subject to the Act (e.g., messages relating to completing or confirming transactions agreed to by the recipient, providing warranty or update information, loan account information where there is an ongoing relationship, etc.).

It is important to note that the Act covers the persons sending the messages, as well as those ordering such services. Therefore, both the advertising services company plus the company ordering the advertising services would be covered. Liability for spam may also be imposed on entities that have a majority interest in the spamming entity. There can also be liability under the Act to a company if the company’s services or products are marketed by a third party in violation of the Act.