As a general rule, the FTC requires that an advertiser provide
additional information when an ad makes a claim, express or
implied, that might be misleading without more information. To be
effective, that additional information must be presented in a way
that is clear and conspicuous.
For disclosure to be effective, it must be clear and conspicuous
to the reasonable consumer regardless of the device, media or
Ensuring that a consumer sees the disclosure is the
responsibility of the advertiser. The FTC gives substantial
guidance on the placement of disclosure, in particular in regards
to the proximity of the disclosure to the claim that requires the
disclosure. In general, the closer the disclosure is placed to the
claim it is modifying, the better.
The FTC states that disclosure is most effective when the claim
and the disclosure are on the same screen. When the screen is small
or the disclosure is long, an advertiser should include a prompt
that encourages the viewer to scroll through all of the relevant
information. Prompts should be specific, i.e. "see below for
important information on restocking fees" is better than
Next week, we will publish additional tips on ensuring your
disclosure is clear and conspicuous in "Part 2: Tips for
Business Advertising Online in the U.S."
When space is at a premium, in banner ads or on Twitter, for
example, the advertiser must consider whether to place the
disclosure in the ad itself or to hyperlink to the disclosure.
Although the FTC frowns on the use of hyperlinks, they may be used
as long as the disclosure doesn't address key information, such
as price, health and safety.
When hyperlinks are used, the link should be close to the
relevant information and be obvious to the viewer. The hyperlink
should provide sufficient details about the nature of the
disclosure, and once a viewer clicks on the hyperlink they should
be taken immediately to the page that contains the disclosure,
which should be noticeable and understandable.
The FTC particularly discourages disclosure in the form of
pop-up ads, because consumers often block pop-ups, or fail to make
the association between the advertisement on one screen and
potentially relevant information in the pop-up. Where pop-ups are
used, they should require the consumer to complete an affirmative
action before closing the pop-up window (i.e. clicking
"yes" or "no").
Bloggers or Twitter users who are paid to endorse products, or
who receive free products for review purposes, need to disclose
their relationship with the company. For example, a paid celebrity
endorsement on Twitter should start with "Ad:", followed
by the advertiser's message. Disclosure may not be effective if
it follows in a subsequent tweet, as unrelated messages may be
posted in the interim, and separate the claim from the disclosure.
Additional information on disclosure rules for celebrity endorsers,
bloggers and testimonial advertisments can be found in the
FTC's "Guides Concerning the Use of Endorsements and
Testimonials in Advertising"
The FTC publication is clear that if an advertisement requires
disclosure to prevent it from being deceptive, but the necessary
disclosure cannot be made clearly and conspicuously, the
advertisement should not be run.
The recent decision of the Ontario Court of Appeal in BMW Financial Services Canada, a Division of BMW Canada Inc. v. McLean provides some useful insight into the relationship between automobile dealers and the financing arms of the manufacturers for whom those dealers are franchisees.
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