Tag Archive | "lead generation"

No TCPA Vicarious Liability Without Ratification

The Ninth Circuit has ruled that payday lenders and two marketing companies were not liable under the Telephone Consumer Protection Act by virtue of working with a lead generator that utilized automated dialing equipment to disseminate text messages.

Here, the lender had separate agreements with a marketing company (LeadPile) that purchased/sold leads from a third-party marketing company (Click Media).  Click Media, in turn, acquired leads from a publisher, AC Referral.

The plaintiff filed a class action against the lenders, LeadPile and Click Media, alleging that they were vicariously liable for AC Referral’s alleged TCPA violations because they ratified such conduct.

Importantly, while Click Media and AC Referral had a contract, the lenders and LeadPile did not and represented that they did not even know who AC Referral was.  Click Media asserted that it was unaware of AC Referral’s alleged TCPA violations.

While recognizing that vicarious liability exists in TCPA matters, it determined that the plaintiff did not allege all of the necessary elements and that there was no issue of fact with respect to ratification of AC Referral’s telemarketing activities, notwithstanding defendants’ acceptance of benefits and failure to vet compliance.

“It is undisputed that AC Referral did not enter into a contract with any of the lenders or with LeadPile,” the court held.  “It is also undisputed that AC Referral did not communicate with or even know of the lenders or LeadPile before the lawsuit was filed.  Because AC Referral was neither an agent nor a purported agent of the lenders or LeadPile, AC Referral’s actions do not qualify as ratifiable acts.  Accordingly, the lenders and LeadPile cannot be held vicariously liable for AC Referral’s unlawful text messages under a ratification theory.”

With respect to Click Media, the court ruled that despite their contractual relationship, “[a]lthough AC Referral was an agent of Click Media, [plaintiff] presented no evidence that Click Media had actual knowledge that AC Referral was sending text messages in violation of TCPA.”  “Nor is there any basis to infer that Click Media assumed the risk of lack of knowledge, because [plaintiff] did not present evidence that Click Media ‘had knowledge of facts that would have led a reasonable person to investigate further,’ but ratified AC Referral’s acts anyway without investigation.”

“The knowledge that an agent is engaged in an otherwise commonplace marketing activity is not the sort of red flag that would lead a reasonable person to investigate whether the agent was engaging in unlawful activities,” the court said.  “Because Click Media had no ‘knowledge of facts that would have led a reasonable person to investigate further,’ Click Media cannot be deemed to have ratified AC Referral’s actions and therefore is not vicariously liable.”

Click here, to read the full opinion.

Contact the author if you are interested in learning more about the design and implementation of compliant lead generation protocols, or if you are the subject of a state or federal regulatory investigation.

Richard B. Newman is an Internet marketing compliance and regulatory defense attorney at Hinch Newman LLP focusing on advertising and digital media matters. His practice includes conducting legal compliance reviews of advertising campaigns, representing clients in investigations and enforcement actions brought by the Federal Trade Commission and state Attorneys General, commercial litigation, advising clients on promotional marketing programs, and negotiating and drafting legal agreements. You can find him on Twitter at FTC Defense Attorney.


ADVERTISING MATERIAL. These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result. Hinch Newman LLP | 40 Wall St., 35thFloor, New York, NY 10005 | (212) 756-8777.



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CPA Marketing Tips

So you have a solid product, now what?

Is your backend as sound as your front?

Having the right systems in place before you start a CPA campaign positions you for more opportunity and success from the start! Regardless of offer type (lead-gen, trial, straight-sale) the most profitable and lasting advertisers have already set up their data management, domain hosting providers, responsive customer service departments, tracking software, suppression file solutions and creative programmers that can constantly optimize landing pages and creative assets. For trials and/or straight-sales, you’ll need merchant processors, shopping carts and product manufacturers that can keep up with demand.

Creative 101

Before you approach a CPA network with your offer, make sure you have all the creative assets ready. Most networks have email, display and search traffic sources so make sure the applicable assets are on hand. When designing creative, speak to the target audience; otherwise the offer will have limited opportunity in any given network. Creative messaging needs to be clear and cohesive with your product/offer. Make sure to highlight consumer benefits and have an immediate call-to-action so you can maximize that small window of opportunity you’re given to capture that audience. Display and email creatives need to have consistent messaging, easy to read fonts, visually pleasing colors and always have a clear call-to-action. Remember, you only have about 6-7 seconds to capture the consumer’s attention.

1. Email: Provide HTML and text backups for all versions. The text version is for consumers that do not have HTML enabled browsers. To give your offer the most potential, you should create both HTML-only and hybrid text-HTML assets.

2. Display: Also called onsite and banner advertising, make sure you’re set up with industry standard banner sizes (300×250, 728×90, 160×600, 120×60, etc) and can build out additional sizes with a quick turnaround. The more variety you have, the more opportunity for success there is.

3. Search: Ad copy should be a short description of the landing page. Using keywords from the landing page in the ad copy will help optimize the campaign.

Landing Pages

Make sure visual and copy elements from the creative are mirrored in the landing page, otherwise you could create consumer confusion and potentially lose that lead. Important information should always be above the fold so the consumer doesn’t have to continually scroll up and down. Make sure the consumer can easily identify what you need them to do so you earn their conversion (ex. complete form fields, enter credit card information). When applicable, use legitimate consumer testimonials and highlight recognitions from consumer watchdog companies (ex. Better Business Bureau).

test your offerTesting Your Offer

If you’ve tested internally, it’s in your best interest to share the information with your network partner. Providing information about top performing creatives, landing pages and/or subject/from lines will help set up affiliates with the best tools to ensure a successful launch.

Getting Started With a CPA Network

Expect to be asked how your data is monetized on the backend, CPA amount, allowed traffic types (email, display, etc), geo-targeting (US, UK, etc), demographic targeting, amount of monthly volume you can handle, when the pixel fires, cost-to-consumer, etc. It’s in your best interest to provide the landing page and creative samples so your offer can be better evaluated. The more information you provide, the better. Regardless of offer-type, a good CPA network will ask questions to determine if your offer has potential for long-term success. Don’t take it personally if they don’t think it’s a good fit, they’re doing you a favor by not wasting your time. Instead of trying to find another network that will accept your offer, work on strengthening it. Ask questions about what you can do to make your offer competitive.

Post-campaign Launch – What You Need to Know Ahead of Time

As a CPA advertiser, expect to constantly optimize creatives, landing pages, copy points and publishers. Once the campaign is live, don’t just sit there and hope for the best. Provide the CPA network with optimized landing pages, like eliminating 1-2 form fields or adding some elements to capitalize around the holidays (Easter, anyone?). Updating creatives and copy points every few months can lead to increased conversions and keep your offers fresh, as any advertising campaign can become stale after time. Continually monitor publishers running your offers and determine which are backing out the best and which aren’t. Be proactive: don’t wait on your account rep to request fresh creatives and ask how publishers are performing. Information sharing is critical because the CPA network cannot optimize traffic if you don’t share it. The longer you do nothing means your offer is probably doing nothing too.

plan your cpa campaign aheadFinally, plan ahead!

Think about your product in the current and future markets. How relevant is your product to the current and future consumer? What are your long term goals? What are foreseeable changes and how will you respond to them? Can you maintain profitability year round, or does your campaign need to be tweaked to account for seasonal changes? These are important questions to ask yourself throughout the entirety of your CPA campaigns. How you respond will ultimately drive your offer performance, and lead to long-term growth and success.

About the Author:
Jenna Dietz, Clickbooth Advertising Consultant

Jenna Dietz graduated from Indiana University.  Before coming to Clickbooth, she worked as a Media Buyer for a full-service advertising agency where she specialized in planning, buying and optimizing CPM and CPC campaigns for her local, regional and national clients. As an Advertising Consultant, Jenna specializes in education, health care and survey lead generation. In her spare time, Jenna is an avid sports fan, specifically IU and KU basketball and Colts football.

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