• by Wendy Davis  @wendyndavis, November 9, 2007

Online marketing company AzoogleAds has agreed to pay $1 million to settle an investigation by the Florida Attorney General into the company's marketing practices.

The settlement, a first for the Florida Attorney General's new Cyber Fraud Task Force, stemmed from an investigation into whether AzoogleAds' online ads offering "free" ringtones tricked consumers into signing up for paid ringtone subscriptions. As part of the agreement, the company promised that future online ads would clarify that the ringtone service it markets isn't actually free. AzoogleAds didn't admit to any wrongdoing as part of the settlement, which was announced Wednesday.

AzoogleAds chief marketing officer Michael Sprouse says the company hopes its agreement with the Florida authorities will serve as a model for other industry players. "What we are aiming to do is make sure that we're setting the right standard and leveling the playing," he says.

Sprouse added that the company has already pulled old online ads that promised free ringtones. "It's an ongoing process, where every day we're looking at all of our offers and all of our creative," he says.

AzoogleAds came to the attention of the Florida Attorney General's office as part of a larger investigation into mobile services marketing. State authorities there continue to probe a host of other companies, including Think Partnership, Intermark Media, Media Breakaway, Traffix, W31 and Verisign's m-Qube.

The settlement comes at a time of heightened scrutiny of online ad techniques. Separately, the FTC is investigating ValueClick for its lead generation practices. That probe involves potential violations of the federal CAN-SPAM act based on promises of "free" merchandise or services in exchange for consumers' e-mail addresses.