Actually, you haven't heard enough about it; not enough is being made about the FTC's concern.

A recent poll by Zogby International found that 81 percent of those polled said they were "somewhat" or "very" concerned about "companies tracking their Web surfing habits and using that information for advertising." Eighty-one percent!! That's more than the number of Americans that believe in evolution, global warming or that these guys should come back for a second season. Yikes.

Other interesting tidbits from the survey, 88% of those surveyed "believe that tracking where Internet users go on the Internet without their permission is an unfair business practice" and 79% favor something similar to a Do Not Call List. Hello? Do I need the Surgeon General to step in here before the ad industry wakes up? And I don't mean wake up by fighting the legislation, this is happening (more on that below), I mean wake up by following a fundamental tenet of business -- give consumers what they want. Companies that follow the reverse corollary -- get as much out of consumers at every turn to make as much friggin' money as possible-- eventually regret it.

But instead of giving consumers what they want, the online ad industry is responding by getting better at exactly what is pissing everyone off. Awesome. The technology de jour for pumping consumers' computers for the last bit of marketable information is the flash cookie. A flash cookie, for those of you who are as technology savvy as I am (i.e. not very) is a collection of cookie-like data stored on your computer but which is, unlike regular cookies, not visible through your web browser because they aren't stored there. Thanks Adobe! Flash cookies are stored elsewhere, in hard to find locations, where they can repopulate the deleted cookies in your browser and do other devious things which you don't know they're doing. This is like the memo that surfaced proving Joe Camel's nose is a penis and he is targeted at 12 year olds.

The better the ad industry gets at targeting users online, the more of an uproar it is going to create among consumers to stop them. The folks who commissioned the above survey came to the conclusion that "online privacy legislation is a no-brainer winner with the American public." And guess who could use some of that no-brainer winning? That's right, him and everybody else who collects a paycheck in the nation's capital, that's who. The VCs who are pouring money into pumping your computer for information, should think about the value of their investments when their companies have to obtain affirmative consent before tracking consumers or the massive lawsuits they will face when they don't. (Note: the current proposed legislation doesn't contain a private right of action, but a lot of consumer watch dogs are calling for it.)

If you thought the American public was pissed at Congress, just wait until they unleash some of that at Madison Valley (I just made that up; it's Madison Avenue combined with Silicon Valley). Instead of finding more and better ways of getting information out of people without their consent and then selling that to people who will exploit it, find better ways to advertise to them. Otherwise, consumers will deliver a big F you to these companies. And in this case, the F will stand for FTC regulation.

And yet that is what the vast majority of ad networks are telling brand advertisers these days -- "you can have any kind of advertising you want, as long as it is the kind we sell" (mostly standard IAB banners)- or perhaps -- "you can appear on any websites you want, only we can't tell you which ones, exactly."

The reason for this is that direct response advertising has driven online advertising since its inception and still represents 75% of online advertising. This is true despite the fact that brand advertising represents two-thirds of all advertising in the U.S. But let's face it, you can't buy a Big Mac online (though, trust me, they're probably working on the McPopUp as I write this). It stands to reason that brand advertising is poised to make a big impact here.

Jeremy Liew, one of the most prolific VCs in the online ad space, wrote this excellent blog entry about why brand advertising will drive change in online advertising. At Betawave, we wholeheartedly agree. It's not just about how many people you reach, but about how you reach the people you do; it's about allowing brands to build more meaningful relationships with their audience online, something that only a few of us are focusing on. Everyone else is helping sell weight loss supplements and mortgage rate reductions. Ok, maybe not everyone.

And it won't be long, we believe, before you'll be able to get your online advertising in any color, not just black. Unless you want it in black of course, which is how we will give it to you (would that be flat black, charcoal, onyx or another shade?)

COPPA's effectiveness has received mixed reviews. The FTC has levied some fairly steep fines and has brought actions against some fairly serious brands in its enforcement, but it has also left some holes that have invited states to get into the mix. But I think you'd have a hard time arguing against protecting kids online (unless you were like a lawyer or something).

But the government is not leaving well enough alone. Recently, the FTC announced that it is considering changes in the rules that implement COPPA. Specifically, they are seeking public comment on whether changes in the online environment since 2005, oh, say, like this, when the FTC last reviewed the Rule, warrant changes in the Rule. As if! The FTC seems most focused on the increasing availability of mobile communications, interactive gaming and other interactive media.

Just because my niece sends a bazillion texts per month, doesn't mean her privacy is being violated. But it's worth another look to see what else she might be doing that does. So, stay tuned to see what changes you can expect if you operate a website for kids.

Computer repair company, Rescuecom, recently abandoned its AdWords litigation against Google.

At the same time, I don't see Georgia Pacific suing Proctor & Gamble when I buy Quilted Northern toilet paper at Safeway and they spit out a coupon for Charmin. So, apparently, this Internet thing has people's attention (paper coupons at Safeway, not so much). One of my favorite legal blawgers out there, Professor Eric Goldman from Santa Clara University, keeps a running tally of the number of cases against Google. It currently stands at nine. Google is clearly defending a revenue stream.

Federal law requires generally that a trademark owner demonstrate that an infringer is (1) making a use in commerce of the trademark, and (2) that it is likely to cause confusion or mistake, or to deceive. Are you really confused when you type "Volvo" into Google and an ad for Toyotoa comes up? Probably not. But it's not hard to imagine a scenario where it could become so.

In other news, trademark law got an unexpected boost from fake news program, The Colbert Report. During the Olympics, Stephen Colbert did a funny bit with his brother about the voracity with which groups like the Olympic Committee defends their trademarks. Check it out if you have time. And if you want to get really crazy this weekend, see what happens if you try to buy "Olympics" or "Super Bowl" as an AdWord. I think the lawyers might actually descend upon your house from helicopters...

The debate that followed was akin to a session of British parliament, albeit with the words "purchase intent" and "accountability" in lieu of the traditional "poppycock" and "balderdash!"

From our perch at 1 Betawave Tower, we were surprised that all three groups focused on the performance of display ads, those adorable graphical banner things, as the primary vehicle to measure campaign success. Given that digital advertising budgets are also called "interactive budgets", wouldn't a more encompassing view of all the possible interactions with an advertiser give a better view on performance?

In our experience, yes, this is unequivocally true. We learn more about a target audience by observing their participation with branded content - material that the advertiser integrates into the site - than by simply monitoring impressions, click-through rates, and asking folks to take surveys. We learn about their perception of a brand by quantifying the amount of audience participation with branded content, how long each session lasts, and if they are willing to share it with others.

The challenge is evaluating and understanding the infinite combinations of data that result from measuring the entire spectrum of possible interactions on any given website. We marry advertiser objectives to interactivity data that best approximates the ultimate goal of the campaign. For example, if a brand is seeking maximum engagement through time and participation, we focus on immersive content like branded games. If an advertiser is seeking acquisitions on a social media platform, we activate blogging networks to form an editorial funnel leading to the brand's Facebook or Twitter page.

Each path includes a finite number of critical interactions that act as key performance indicators for a campaign. In the branded game approach, for example, the variance between "game started" and "game completed" is a crucial metric. And much like standard media, there are optimization strategies to improve these KPIs.

An additional piece of good news is that standard media serves as a consistent, reliable barometer within this maelstrom of data. We look at the traditional media performance metrics (impressions, CTR, post-click actions, etc.) in parallel with the more customized engagement metrics noted above. The positive correlation between participation with branded content and high levels of interaction with standard media are striking. In essence, the media works harder when the advertiser has also invested in the content that the audience already values.

Display ads will always be a key component in this media mix, but discussions about performance should go beyond the type of media vendor. Performance and effectiveness are not predetermined by using a network instead of a single site, or vice versa. What matters are the relevance, integration, and placement of your message within the content that your audience clearly values. Regardless of the type of vendor, thinking about branded content is crucial as decisions are made about how to apportion budgets this year.

These days, who has time to tell their copyrights from their trademarks and their trade secrets? Can you tell them apart? What the heck is a service mark anyway? Patents? Uh, I don't think so. I wouldn't want you to get caught with your trade dressing in a stitch, so I will occasionally provide a brief overview of the most common kinds of intellectual property. We kick it off with an oldie, but a goodie.

In their zeal to sound like a law geek, like me, people sometimes say things like, "Hey, that's a great brand name. Let's copyright it!" Easy, trigger! A brand name for a product or service are covered by trademarks and service marks. And we'll get to that in another post.

The "FTC" (that's hipsterspeak), which is the US Agency responsible for consumer protection, just revised its Guides Concerning the Use of Endorsements and Testimonials in Advertising (the "Guides"). The Guides cover the use of endorsements and testimonials in advertising and was last updated before MTV was even born, so it needed a revision like Charlie's Angels needed a makeover. The new Guides went into effect on December 1, 2009, officially bring advertising regulation into the Internet age. The Guides have a significant impact on what advertisers can do to market their products online.

Suppose a blogger receives a free game system and then posts a favorable review of it on her blog. Under the revised Guides, she will have to clearly and conspicuously disclose that she received the gaming system free of charge. Likewise, if an employee of an MP3 manufacturer posts positive comments about his company's device on a message board, the revised Guides require him to clearly and conspicuously disclose his relationship to the company in that post.

Essentially, the Guides require marketers to disclose material connections between themselves and their endorsers and it requires that such endorsements reflect the honest opinions, findings, beliefs, or experience of the endorser. The Guides make both the marketer and the endorsers liable for false statements made by endorsers. Experts (i.e. not me) expect this to have a material impact on the way many companies use current (blogs) and developing (social networking sites) online platforms for marketing their products.

But what's the fun of reading reviews on Amazon if you know who the actual voice behind the review is, you ask? I hear you. All of this transparency and honesty kind of go against the whole intention of the Internet, doesn't it? It's all part of the plan of this new administration to actually enforce the laws, particularly with respect to consumer protection and privacy. It's all kind of frightening, but that's a story for another post.