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Volume 17, No. 1 © 2009 The Metropolitan Corporate Counsel, Inc. January 2009

Widgets In Online Marketing Campaigns – A Balancing Act

James L. Johnston, way to experience the Internet and to interact Oriyan Gitig with (advertising) con- and Alison Winter tent. Instead of relying upon users to return to DAVIS & GILBERT LLP a marketer’s website or store or hoping they What Is a Widget? A widget or web spot a print ad, televi- sion commercial or widget is an HTML code web application James L. Oriyan Alison typically created by a third party which can highway billboard, Winter be downloaded to a web page (including, Johnston Gitig widgets allow mar- for example, a blog or social networking ber 31, 1998 and on 36,100 websites one keters to secure a per- profile) that delivers tailored information, year later.1 Trivia Blitz spread virally manent piece of real estate on a user’s graphics, games, videos, and other non-sta- through an invitation to add the game to a desktop. These interactive devices provide tic content. Widgets are generally available user’s website. Uproar paid participating tailored information or entertainment that a at no cost, enabling users to easily access third-party sites, such as CNN, Geocities, user genuinely wants and, in doing so, mar- and distribute them, and are often customiz- Tower Records and Tripod, a referral fee for keters develop and maintain ties to their able by the user. new users that registered with Uproar consumers and, potentially, discreetly utilize Introduced over a decade ago, widgets through the widget. the consumer in further delivering the mar- keting message (for example, through a are now commonplace on the Internet as a Three years later, WeatherBug released a send-a-friend promotion). tool for bloggers, social network users, auc- weather-reporting widget that resides on Widgets, however, like all methods of tion sites and owners of personal websites users’ desktops. In its first year, more than viral advertising, are not without challenges. to deliver personalized content. In addition 1.5 million users downloaded the Weather- In addition to the risks of turning over some to providing information, widgets have Bug widget and more than 65 million peo- level of control over your brand to con- become a vehicle for advertising, serving as ple have done so since its release.2 Even sumers, some critics argue that, due to the delivery systems for targeted messaging. At traditional marketers are using widgets to the time of their inception, however, wid- mindset of consumers engaged on the Inter- successfully supplement traditional media net, widgets are largely incapable of creat- gets served a largely utilitarian purpose, spending. In promoting the release of the such as the downloadable calculator or ing the kind of ties between consumers and 2002 film Resident Evil, Sony Pictures 5 weather reporting tool. As widgets have brands that other forms of marketing can. offered a sweepstakes tied to RockYou’s As the argument goes, it is difficult to pene- evolved, they have increasingly taken on an very popular Zombies widget. While Sony entertainment flavor. Today, many widgets trate consumers’ minds when they are inter- anticipated less than 10,000 entrants, it actively engaged rather than simply “logged encompass a hybrid function of the two, 3 received over 1 million. 6 depending on what it is designed to achieve. on” to passively view marketing content. If you’re still not convinced of the poten- Internet users are said to be increasingly Are Widgets A Successful Means of tial for using widgets in marketing, it has Marketing? The first widespread web wid- desensitized to background noise and been predicted that web widget marketing peripheral distractions on web pages and are get, Trivia Blitz, a java game, was intro- spending in the United States will reach $40 duced in 1997 by Uproar.com, a game highly attuned to seeking out the core con- million this year.4 information website. Trivia Blitz was tent that they are looking for. As such, a How Can Widgets Change Marketing embedded on 15,200 websites as of Decem- widget in the form of branded advertising Campaigns? The tens of millions of dollars may be overlooked by site visitors while a invested into the creation of widgets sug- widget in the form of unbranded advertising James L. Johnston is a Partner, Oriyan gest that marketers expect widgets to pro- may fail to create the necessary association Gitig and Alison Winter are Associates, in vide a unique and effective means of in the minds of consumers required to add the Advertising, Marketing and Promotions reaching consumers. Proponents tout a wid- value to the brand. practice group of Davis & Gilbert LLP. get’s ability to provide users with a new Please email the authors at [email protected], [email protected] or [email protected] with questions about this article. Volume 17, No. 1 © 2009 The Metropolitan Corporate Counsel, Inc. January 2009

Widgets are further criticized for Additionally, you must provide a terms of rules. To the extent that you authorized the enabling web fraud. For example, this year, use policy governing use and/or access of incorporation of spyware into your widget, a California information security company, the widget; and if by your widget, you col- be aware of what information is being col- Fortinet, reported an incident in which lect any consumer information (whether lected and by what method each time your Facebook users were lured into a fraudulent personally identifiable or not), provide a widget is downloaded, and make sure that scheme known as “Secret Crush” in which privacy policy, similar in each case to what under the applicable agreement your third- victims were informed that one of their you would include with a traditional web- party developer is liable to you with respect Facebook friends may have a crush on them site or other form of traditional online to any breach by it of any data security laws and they can find out who by using the advertising, such as a banner ad. or rules. Moreover, you need to ensure that Secret Crush widget. Unable to resist the Software-Related Risks. Although it you comply with all applicable legal disclo- temptation, users are taken through a series may be possible to utilize in-house sure and consent requirements for this type of steps by which they must allow the appli- resources, it is more common to hire a third of application. cation to “know who I am and access my party to develop your widget. You may pro- Lastly, protect the integrity of your brand information.” Once the victim has success- vide the graphics or content for incorpora- by keeping security in mind from the get go fully added the application, he or she is then tion into the widget, but the developer will and securing your widget (for example, by told that he or she must “invite at least five likely program the widget’s source code. encryption or by retaining the ability to friends,” thereby recruiting the next five Fundamentally, a widget is a piece of soft- remotely disable the widget upon the occur- victims. No admirer or “secret crush” is ware. As with any software application, the rence of a certain event) so that it is not eas- ever revealed. Once the installation is com- source code is what brings the widget to life ily manipulated by anyone other than you or pleted, the victim has successfully acquired and is the most valuable proprietary compo- your third party programmer. A widget for a Zango, an ad delivery application.7 nent of a widget. As such, you should make pet supply business that delivers a “puppy How to Manage Your Risk When sure you retain authority over the source of the day” photograph can easily be manip- Employing Widgets in Advertising Cam- code programming. This means, have some- ulated to deliver pornography if not prop- paigns. Due to the nature of widgets, they one who is technologically savvy on your erly secured. It is important to note, are quickly and easily transported from side Ð usually a member of your informa- however, that no matter how much security location to location and user to user. In this tion technology group. Although you may you implement, it is virtually impossible to way, with little effort, a widget can dissem- not be able to read or review the source protect against all potential security inate your marketing messages to a wide- code once it is developed, you should breaches or hacks into your widget’s code. spread consumer audience. However, since always work with a developer with whom The above is merely an introduction on control over the widget is easily lost, it is you are comfortable, who has a dependable how widgets may benefit you and how to crucial to manage your risk and liability reputation and who agrees to follow your protect yourself if you decide to use widgets from the outset, even before the widget is instructions to a tee with respect to how to in your marketing campaigns. With the con- created. These risks fall into two categories: build the widget. Always make sure to have tinued growth and development of interac- (i) viral marketing risks and (ii) software- a written agreement with your widget devel- tive media, widgets are certain to continue related risks. Our discussion sets forth both oper so that you can expressly address the to grow and develop as well, and we can the risks and a few of the corresponding appropriate risk allocation. To the extent the look forward to widgets taking on new protective measures you can take in order to agreement does not provide for your owner- forms in connection with such development. minimize your liability. ship of the source code, to minimize your Traditional Viral Marketing Risks. future liability for a widget “gone wrong,” The concept behind viral marketing is that consider adding a source code escrow pro- online users will voluntarily forward your vision to the agreement such that you have marketing or advertising message to their the ability to access and analyze the source 1 What’s the Word on Widgets, eBiz Insider, August 7, friends. Such message may be in the form of code at a later date to confirm compliance 2008, http://www.ebizinsider.com/2008/08/07/ what%E2%80%99s-the-word-on-widgets. a blog, game, video, software application, by the developer with the agreed specifica- 2 Thinking: The Latest from Bozell, Widget Works, May email or widget, among others. Part of the tions and legal requirements prior to distrib- 27, 2008, http://www.bozellthinking.com/article/wid- appeal of using a viral technique lies in the ution of the widget to the public. If your get-works. less obtrusive nature in which a user is con- developer resists adding this escrow lan- 3 Id. fronted by it (consider for example, a guage, explain that adding such language 4 Marketing Charts, Widgets to Wiggle In Budgets- “chance encounter” with a blog or a game also provides evidence on the developer’s $40MM Worth in 2008, http://www.marketingcharts. com/interactive/widgets-to-wiggle-into-budgets- on Facebook that is actually part of a larger behalf that he/she was not in breach of the 40mm-worth-in-2008-3877/emarketer-widget-app-ad- online advertising campaign) and the fact agreement. spend-2007-2008jpg. that it was sent by a trusted source. It is In addition to traditional concerns 5 Why Widgets Don’t Work, Business Week, March 3, important to remember, however, that the regarding functionality, compatibility and 2008, http://www.businessweek.com/print/technol- same rules that apply to more traditional viruses, one priority to keep in mind is to ogy/content/feb2008/tc20080229_131531.htm. forms of online marketing and advertising avoid the incorporation of spyware code 6 Id. apply to viral marketing, including widgets, into your widget. Spyware is software that 7 Blog ANTA, Widget Inflicts Malware Ð Facebook Ignores Advisory? January 5, 2008, http://blog. as well. As such, to avoid claims of decep- is surreptitiously installed on a user’s com- anta.net/2008/01/05/widget-inflicts-malware-face- tive practices or consumer confusion, you puter without express consent from the user. book-ignores-advisory/. Zango is an infamous mal- should ensure that your widget, when Spyware software often collects personally ware distributor that has run into trouble with regulators over its practices. Zango has already run accessed or downloaded (as the case may identifiable information from a user. Unless afoul of the Federal Trade Commission for its malware be), includes all necessary disclosures, you have requested it, you should protect practices. In a $3 million settlement with the FTC including, but not limited to, clearly indicat- against the introduction of spyware into reached in November 2006, Zango (formerly known as 180Solutions) agreed not to install its adware with- ing that it is part of a commercial campaign your widget to avoid being in breach of any out obtaining consent after providing clear and promi- and identifying the sponsor of the widget. state data collection and security laws or nent disclosure.