New FTC Rules for Digital Ads – Does Your Online Marketing Pass the Test?

Earlier this month, the Federal Trade Commission updated guidelines for advertising and marketing on the Internet.

Entitled “.com Disclosures: How to Make Effective Disclosures in Digital Advertising,” it’s the first revision to the country’s online marketing rules in nearly 13 years, writes Neil Austin at law firm Foley Hoag, and is intended to adapt regulations to today’s more sophisticated practices:

“Whereas most digital advertising thirteen years ago was popping up or scrolling across our computer screens, today’s digital advertising is far more integrated into our online culture—whether as email offers to invitation-only flash sales (‘50% off; today only!’), sponsored Twitter feeds, solicited blog reviews, or advertisements dressed up to look like news (‘THIS JUST IN: Scientists have discovered a revolutionary breakthrough in weight loss.’).”

But one thing hasn’t changed: the same rules apply no matter where you advertise. From Ifrah Law:

“One central theme still prevails: existing consumer protection laws and rules apply no matter where you offer products and services: newspapers, magazines, TV and radio commercials, websites, direct marketing, and mobile marketing. Thus, the basic principle applies that companies must ensure that their advertisements are truthful and accurate, including providing disclosures necessary to ensure that an advertisement is not misleading. Further, the disclosures should be clear and conspicuous – irrespective of the medium of the message.”

What to know?

1. Disclosures must be “clear and conspicuous:”

“In general, this means that a consumer must be able to see and understand the disclosure quickly, without much effort. Disclosures are clear and conspicuous when they: (a) are placed close to the claim they are qualifying, (b) appear prominently in the ad, (c) are repeated as necessary to avoid being overlooked, (d) are made prior to purchase, (e) are written in language that is easy to understand, and (f) in the case of audio disclosures, are at a volume and cadence that can be readily heard and understood.” (Foley Hoag)

2. Text limitations? No matter:

“Space constraints, such as those in social media, do not relieve advertisers of their consume-protection responsibilities. The same rules apply. Required disclosures should still be made in the ad itself or conspicuously on the page to which the ad links. Advertisers should consider how important the disclosure is, what information needs to be disclosed and the extent of the burden of placing the disclosure in the ad when determining where to place it.” (Morrison & Foerster)

3. Timing is everything:

“The FTC suggests that companies display disclosures before a consumer chooses to buy a product or service – in other words, the disclosure should appear before a consumer adds a purchase to his or her ‘shopping cart’ or before the consumer clicks ‘buy now.’ The FTC also cautions that necessary disclosures should not be relegated to general ‘terms of use’ and similar contractual terms on a website.” (Ifrah Law)

4. Consumer perception is 100% of reality:

“Advertisers should make sure their disclosures are clear and conspicuous on all devices and platforms that consumers may use to view their ads. Whether a disclosure meets this standard is measured by its performance—that is, how consumers actually perceive and understand the disclosure within the context of the entire ad.” (Venable)

5. Linking to disclosures is only allowed under certain conditions:

“Hyperlinks used to lead to a disclosure should (i) be obvious, (ii) be labeled appropriately to convey the importance and relevance of the information it leads to, and consistently formatted, (iii) be placed as close as possible to the relevant information it qualifies, (iv) take consumers directly to the disclosure on the click-through page, and (v) be monitored for effectiveness and changed, if necessary.” (BuckleySandler)

6. Once may not be enough:

“Repeating the disclosure may be necessary to ensure that it has been presented in a sufficiently clear and conspicuous manner. This is particularly true on long websites or applications, or in cases where consumers may enter the website not through a home page but (for example) from a link in a search engine. Moreover, if the claim requiring the disclosure is repeated throughout the ad, the disclosure should accompany the claim each time.” (Morrison & Foerster)

7. Can’t follow the rules? Just say no:

“The new guidance … cautions advertisers to take account of the various devices and platforms consumers may use to view advertisements and any corresponding disclosures, and states that the disclosures should be conspicuous on all platforms that may be used to view the advertisement. If the disclosure cannot be made clearly and conspicuously on a certain platform, then that particular platform should not be used.” (Cullen & Dykman)

The updates:

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