Azoogle Ads, operators or the Azoogle Network (AZN), sent out a notice to its publishers today sharing information about two new lawsuits, one by the Illinois State Attorney General and one by Oprah and frequent guest, Dr. Oz in the State of New York. As explained in the email by AZN:
- The Illinois State AG has filed actions against three parties for deceptive advertising practices in the marketing of acai berry products and other dietary supplements. Please keep in mind that the regulators are choosing to directly pursue affiliate marketers for their marketing practices. The full text of the press release can be found here: http://www.illinoisattorneygeneral.gov/pressroom/2009_08/20090819.html.
- Dr. Oz and Oprah Winfrey have also filed a lawsuit in New York for copyright and trademark infringement against approximately 50 companies, including advertisers, suppliers, ad networks, and affiliates. To put it bluntly, they are very unhappy of their celebrity status being used to market dietary supplements and cosmetics, without their permission. They have specifically listed hundreds of affiliate sites they want discontinued immediately, because the URLs use their name or the sites claim endorsements from Oprah/Dr. Oz. The full story can be found here: http://www.msnbc.msn.com/id/32483484/ns/entertainment-celebrities/
Not mentioned in the email but also rumored throughout the performance marketing industry are ongoing investigations by the FTC. They have released statements about their interest into the space but no public suits yet.
For the twenty-somethings running many of the sites, they simply didn't expect to ever get in trouble. There is a notion of creative marketing, and then there is simply just ballsy stupidity - that special breed of reckless action when the money is simply too good and too easy. Let's hope they didn't spend all that money they earned.
Above image - Sample landing page of the type that led to the suit, or as we like to say "How not to win friends but incluence people."
This will be the end of some, but it's just the beginning the reformation of the current performance marketing ecosystem. This crash will be much harder, much more expensive than its precedents, e.g., the Florida Attorney General's multi-million windfall going after those who promoted ringtones.
