May 26, 2017
Brand misuse can cause serious financial and reputational harm, as well as undermining the legitimate market for the goods or services in question.
One form of brand ‘misuse’ occurs where digital advertising is placed on undesirable websites. Adverts are placed by marketing affiliates and/ or advertising networks but brands do not always have visibility as to where the ads are appearing. The issue has courted significant media attention, with particular concerns being raised about programmatic trading – which uses automated processes for buying and selling online advertising.
This issue is also pertinent for gambling operators from both a legal and British licensing perspective. In 2016, the Gambling Commission of Great Britain sought views on whether gambling operators licensed by it should take more responsibility for ensuring that digital advertisements do not appear on piracy websites. Following that consultation, licence condition 16.1.1 was introduced, requiring that licensees must “ensure that they do not place digital advertisements on websites providing unauthorised access to copyright content”, and that they must take all reasonable steps to ensure that their contracted third parties do not do the same. In the event that the third party does not comply, the licensee is obliged to terminate its contact with that party.
This licensing condition raises the question of how gambling operators can ensure that their brand is not being advertised on a copyright infringing site. This is especially so in an online environment where there are many thousands of websites that make available pirated content; and where the adverts that are served are in many cases tailored to the particular user’s internet usage profile.
A study recently undertaken by INCOPRO into the placement of adverts relating to five popular UK gambling brands on piracy websites underlines the problem. The following graph shows the results for two different user profiles: a ‘generic profile’ used to represent the advertisements that an average internet user is likely to see; and a ‘gambling profile’ tailored towards a user interested in online gambling/gaming.
The graph shows a 26.3% difference in the number of gambling advertisements served to the gambling user profile as compared to the generic user profile. These findings show that gambling advertising is still being served on pirate websites, despite many operators engaging ad monitoring vendors.
Gambling advertising on infringing sites – April 2017
This raises concerns as to the extent to which gambling operators are inadvertently funding copyright infringing websites, thereby associating gambling activity with possible criminal activity, and arguably legitimising such sites at a time when political sentiment is not in the industry’s favour. It also raises concerns for gambling operators as to the associated reputational, regulatory and potential legal risks.