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Volume X, Number 302

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Online Marketing

Over the course of the last two decades, the internet has transformed from a novelty—in 2000, only 1 percent of U.S. adults used broadband internet at home—to a nearly ubiquitous utility.

The increasingly widespread usage and breadth of online activities have far-reaching implications for consumer and retailer behavior. For one, consumers are increasingly buying online. Over the last ten years, online sales have almost tripled, from 4 percent of all retail sales in 2010 to over 11 percent in 2019.

In light of the COVID-19 pandemic, online sales are seeing accelerated growth and quickly becoming a dominant purchase channel across many product segments, including those that may have been previously viewed as unlikely to move online, such as groceries. Traditional, brick-and-mortar retailers have also been impacted by the ubiquity of online access in other ways. Access to the internet through mobile devices allows consumers to more easily research potential purchases. To adapt, many traditional retailers are offering improved omnichannel shopping experiences.

Despite these seismic shifts, market analyses in litigation involving product liability, false advertising, intellectual property, and other areas often ignore or fail to properly account for these developments. For example,

  • The process by which consumers research products and services before purchasing has evolved, largely due to the rise of the Internet and the resulting increase in the amount and types of information available to consumers (e.g., product labels, product websites, third-party reviews). This complicates any analysis of what information consumers may have been exposed to or relied on when deciding to purchase a product.

  • On the other side of the market, producers and retailers are increasingly relying on technology-enabled marketing. Online advertising strategies, such as sponsored search advertising and display advertising, offer opportunities to tailor highly relevant ads to individual consumers. Tailored advertising may make it more likely that consumers were exposed to different marketing messages from a company.

  • Social media platforms and websites can serve to diffuse electronic word of mouth such as consumer reviews about products, which can influence sales.  Companies often seek to influence this electronic word of mouth via public relations and other marketing activities, raising the questions of whether and how a company can be held liable for any misleading electronic word of mouth.

  • Displayed pricing for a product sold online can vary over shorter time periods than in retail stores.  These pricing dynamics would complicate any assessment of economic harm that a putative class of consumers allegedly suffered from a disclosure related to that product.

Understanding how this new paradigm affects consumer decision-making processes and firm marketing behavior can be critical. In this series, we will discuss key findings from academic and industry research, and explore how these findings can provide conceptual insights, guidance on potential data sources, and relevant analytical techniques in litigation.

Copyright ©2020 Cornerstone ResearchNational Law Review, Volume X, Number 265
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About this Author

Ceren Canal Aruoba Economic and Financial Analysis Cornerstone Research
Principal

Ceren Canal Aruoba provides economic and financial analyses for complex business litigation matters involving pharmaceuticals, healthcare, intellectual property, marketing, and antitrust issues. She supports clients and experts through all phases of litigation, including deposition and trial. Ms. Canal Aruoba has worked on the design and implementation of consumer and professional surveys.

Pharmaceuticals and healthcare

Ms. Canal Aruoba has expertise in average wholesale price (AWP) litigation for both branded and...

202-912-8962
Ashish A. Pradhan Intellectual Property & Finance Cornerstone Research Los Angeles, CA
Principal

Ashish Pradhan has more than a decade of experience working on complex intellectual property and finance matters, as well as consumer fraud and product liability cases. He has consulted on high-profile matters and supported experts in state and federal courts, as well as mediation and arbitration. Mr. Pradhan has analyzed matters in the automobile, entertainment, music, retail, social networking, high tech, and video game industries.

Intellectual property

Mr. Pradhan’s expertise spans a wide variety of intellectual property issues, including patents, copyrights, trademarks, and trade secrets. In particular, he has consulted on cases involving lost economic profits, liability issues, and reasonable and nondiscriminatory (RAND) royalties. Mr. Pradhan analyzed lost profits and reasonable royalties in Activision v. Electronic Arts, a breach of contract case involving the publisher and developers of the video game “Call of Duty.” In addition, he has worked on landmark cases such as Move Inc. v. Zillow Inc. and Microsoft v. Motorola.

Consumer fraud and product liability

Mr. Pradhan has worked on multiple product liability matters involving alleged automotive defects. He has evaluated survey data and other market-based research to determine the scope and impact of the alleged defects. In addition, he has addressed alleged misrepresentations in cases involving consumer products and mobile phones.

Finance

In corporate transaction litigation, Mr. Pradhan has expertise with various valuation methodologies, including discounted cash flow, transaction multiples, and public comparables. He has estimated damages in a putative class action against a mortgage originator. Mr. Pradhan has consulted on many cases related to residential mortgage-backed securities, focusing on due diligence, corporate governance, and the materiality of alleged misstatements and nondisclosures.

Marketing

Mr. Pradhan has substantial expertise with a range of marketing analyses related to consumer behavior, advertising, branding and brand value, and customer profitability.

213.553.2521
Anna Shakotko IP Product Liability Analysis Cornerstone Research
Principal

Anna Shakotko focuses on product liability, trade, and intellectual property disputes. She has over a decade of experience providing economic analysis in all stages of litigation, including motion practice, trials, arbitration, and settlement negotiations. Ms. Shakotko works on cases across numerous industries with particular expertise in consumer goods, agricultural products, and technology markets.

Consumer class actions and product disputes

Ms. Shakotko has extensive experience with consumer class actions and...

212.605.5405
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