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Clickbooth Settles with FTC for $2M

Clickbooth is not the first network to settle with the FTC, but their fine of $2M is the largest fine yet.  Clickbooth attributes this to the fact that they are the largest network and worked the hardest to establish workable industry standards.  In a letter from Clickbooth’s CEO, John Lemp, the company announced today that they had come to an agreement with the FTC.  This puts them within a year of the FTC reaching out regarding weight loss advertisers last December.

In the letter to partners, Lemp states that when the FTC approached Clickbooth last December they quickly realized they had two options.  They could have fought.  Unlike other networks, Clickbooth has never been an advertiser or publisher and they were prepared to litigate the question of how an ad network should be regulated.  Or they could negotiate a settlement that would protect their current partners and create more clarity for all networks.  After carefully considering the options, settling with the FTC was the best alternative.

The most interesting thing is how Clickbooth’s order differs from previous orders. It seems that Clickbooth worked a little harder and successfully leveraged this opportunity to work with regulators on establishing a clear set of industry standards that will benefit the industry as a whole.  Publishers and advertisers will also be happy to see that they’re order does more to protect them. As a close personal friend of John for 10+ years now we’ve talked and he’s had the money set aside outside of cash flow for over a year. This really shouldn’t affect Clickbooth at all.

Clickbooth actually gained some ground for the industry as a whole  from this lawsuit. It’s clear that without a unified industry self regulation program, the FTC is going to litigate each and every network until one was made. Clickbooth has taken the first step towards unified regulation.  “The thing that is different about our settlement and some of the others that you’ve seen is that put a real focus on establishing industry best practices and making things less grey.  We don’t think there is anything wrong with the advetorial or nutra spaces. There are just a few guys who took things too far and gave affiliate marketing a bad name,” says Clickbooth.  Clickbooth has already implemented these compliance changes over the past year and will continue expanding on these, notably in the weightloss and publisher lander areas.

The industry has yet to see what all Clickbooth is capable of.  As one of the oldest networks in the industry, Lemp has shown us time and again that he and his team are up for any challenge that comes their way.  Recently they announced that their CPA and CPC network, according to Quantcast, now reaches more Unique US households than Facebook.  Despite the impending settlement, Clickbooth was able to generate more traffic this year than ever before

Pesach Lattin
Pesach Lattin
Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pesach Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.


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