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The Legal Issues of Advertising Online

Make sure your online ads are legally protected.

Question: I've just set up a website for my business and want to start advertising with some of the popular search engines. What are the biggest legal issues in online advertising?

Answer: Some legal issues to consider before advertising online are:

  • Click fraud: In search engine advertising's simplest form, known as pay per click, you offer to pay a certain amount to a search engine each time someone searches a keyword and clicks on a link to your website. Click fraud occurs when someone who wishes you ill (such as a competitor) clicks repeatedly on your ad listings without actually intending to buy anything, just to run up your bill. Before buying clicks on any search engine, find out about the search engine's click protection system and what they will and won't do to remove fraudulent clicks from your account. Also consider registering your website with a pay-per-click auditing service--such as www.whosclickingwho.com --that tracks your search engine listings and identifies potential fraudsters for a fee.
  • Keyword spamming: If you have a registered trademark, you want to use it as a keyword so people searching for that trademark see your website first. A keyword spammer is someone who uses your trademark (for example, by outbidding you for your trademark or including it in the invisible metatags search engines use to find your website) to siphon customers away from you. Most search engines will remove a keyword spammer's listings if you complain, but in many cases you have to pursue legal action directly against the spammer to get him or her to stop.
  • False advertising: Any claim or statement you make about your products and services on your website is a legal warranty consumers can rely on, and must be true, correct and complete in all respects. If you make false claims, you may be sued for false advertising. Avoid hyped-up claims unless you can back them up with hard data, and have an attorney review your product descriptions before posting them on your site, especially if you disparage or make fun of your competition.

Cliff Ennico is a syndicated columnist and author of several books on small business, including Small Business Survival Guide and The eBay Business Answer Book. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.

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This article was originally published in the June 2006 print edition of Entrepreneur's StartUps with the headline: Ad Aware.

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