KEEPING ABREAST OF the latest Web technology is tough, but it isn't enough. As two recent events underscore, marketers need to watch the regulatory and legal realms, too.
First, the Federal Trade Commission issued letters to all of the leading search engine companies, complaining that most weren't making it obvious enough that their search results included paid placement. Second, a group of publishers filed a lawsuit against Gator Corp., a Redwood City, Calif.-based software and ad serving company.
"Although the FTC isn't taking additional regulatory steps that would require search engines to make changes, even the informal recommendations have the potential to change the way advertisers and search engines do business," writes Karen Bannan, who reported our story on the FTC action, which starts on Page 3.
The Gator case involves 10 online news organizations, which late last month filed suit against Gator, arguing its system was a "parasite" that steals revenue from their banner ads, which the Gator ads can obscure. Users of Gator's free utility-which stores Web logins and passwords, maintains an electronic wallet and fills in Web forms-can receive banner and pop-up ads whenever they reach a designated Web site. The Gator Advertising and Information Network, which claims 22 million active users and 400 advertisers, originally came under fire last year.
Reacting to the Web publishers' lawsuit, Gator said its practices "are not copyright infringement because there is no copying or modification of the plaintiffs' Web sites, or any other material."
How the FTC pursues the pay-for-placement matter and how the courts deal with the Gator case will undoubtedly have consequences-potentially, unintended ones-on marketers.