One thing that we have learned over the past several years in the online marketing channel is that as our technical space matures we begin to see companies aggressively leveraging the marketing opportunities that these new technologies offer.

The explosion of social networking sites and the possibilities that this delivery channel offers is a giant carrot to the marketing professional. Building a client base through "individual networks" is a clear path for a company to hit the ground running, and in some cases see immediate returns on their marketing investments.

However, a settlement by New York and Texas highlights the privacy challenges that companies could face should they decide to aggressively leverage their members' personal information.

Not wanting to call a specific organization out on the carpet (and there have been others), however Tagged Inc. has agreed to pay $750,000 to New York and Texas to settle state investigations that the company engaged in deceptive email marketing practices.

The company was exposed for pushing the limits of permission and transparency to build market share. The investigations alleged that during a membership drive in early 2009, Tagged duped new members into providing email addresses and passwords, then sent out more than 60 million email invitations to those members' contacts and made it appear as if the invitations had come from the members themselves.

The agreement with both states requires Tagged to give clear and conspicuous notice to consumers before accessing their email boxes and to obtain explicit consent from consumers before sending invitations to their contacts. Tagged said it has revamped its registration procedures and now clearly labels the buttons to "import friends" and "send invites", and has added an additional screen confirming that members want to send email invitations to their contacts.

A potential class-action lawsuit filed against Tagged by two residents in California who allege that the company harvested their email contacts is still pending.

MediaPost recently published a thorough summary of the issue and settlements in the article, Tagged Settles False Advertising Allegations With N.Y., Texas.

As you can see CAN-SPAM is not mentioned once in the article - the case was brought forward on the basis of false advertising, invasion of privacy, and engaging in deceptive business practices.

However, a couple of things that stand out from this legal activity and should get the attention of all online marketers are the simple principles of "clear and conspicuous notice" and "obtain consumers' explicit consent":

• Clear and conspicuous notice is the means by which terms and conditions specific to a marketing initiative are prominently displayed. With regards to email marketing, there must be:

i. clear and conspicuous identification that the message is an advertisement or solicitation (unless there has been prior "affirmative consent")

ii. clear and conspicuous notice of the opportunity to unsubscribe or opt out from receiving further email communications from the sender (CAN-SPAM Act section 5(a)(5)(A))

• Affirmative (or explicit) consent is the expressed consent to receive commercial email either in response to a clear and conspicuous request for such consent, or at the recipients own initiative. Email addresses must not be shared with third parties unless the recipient was given clear and conspicuous notice of such at the time of consent (CAN-SPAM Act section 3(1))

In other words, affirmative consent means to obtain consumers' explicit permission to "opt in" to receiving email marketing communications. There are two levels of permission best practices:

i. Single opt in - the recipient is added automatically to a list after completing a Web opt-in form, sending in a postcard, emailing a request, etc.

ii. Double opt in or confirmed opt-in - the recipient requests a subscription, which generates an automated email message to which he must reply or click a link to confirm the subscription and be added to the list.

These permission principles are the foundation for building a lasting relationship with your customers and should not be abused simply to attain a short term business lift or market penetration.

As seen in the case of Tagged, they were legally required to change the procedures associated with the social channel and their respective business model.

So what's the takeaway and call to action?

As the lines of traditional email marketing and other delivery channels continue to evolve and converge it will become necessary to understand any and all privacy issues associated with these delivery options. So if you are using or considering implementing a strategy for email, mobile and social networking in your marketing plans, a legal opinion and assessment of your program may be in order.

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