The Federal Trade Commission ("FTC") issued new
guidance for digital advertisers and marketers, ".com Disclosures: How to Make Effective
Disclosures in Digital Advertising" (".com
Disclosures Guide" or "Guide"), on March 12,
2013. The guidance is designed to help mobile and other
online advertisers make disclosures clear and conspicuous to avoid
deception.
The revision to the Dot Com Disclosures Guide is the first since
2000, when smartphones, tablets, and social media marketing were
not in wide use. The revised Guide emphasizes that consumer
protection laws apply equally to marketers across all mediums,
whether delivered on a desktop computer, a mobile device, or more
traditional media such as television, radio, or print.
The Guide emphasizes timeless truth-in-advertising principles,
including that "if a disclosure is needed to prevent an online
ad claim from being deceptive or unfair, it must be clear and
conspicuous." The FTC says this principle means
advertisers should ensure that the disclosure is clear and
conspicuous on all devices and platforms that consumers may use to
view the ad.
Among the revisions, the Guide includes updated guidance taking
into account the increase in the use of small screens and mobile
advertising and contains mock ads that illustrate the updated
principles. For example, the Guide illustrates how placing a
web page disclosure in a different column than the statement it
explains, rather than directly under the statement, may make it
difficult for consumers to notice the disclosure when the consumer
is viewing the web page on a mobile device that has not been
optimized for mobile viewing. In that case, the consumer must
zoom in to read the statement, and the zoomed-in view is unlikely
to encompass the disclosure. The new Guide also explains that
if an advertisement without a disclosure would be deceptive or
unfair, or would otherwise violate a Commission rule, and the
disclosure cannot be made clearly and conspicuously on a device or
platform, then that device or platform should not be used.
The new Guide says disclosures should be "as close as
possible" to the relevant claim. Like the original
guidance, the updated .com Disclosures Guide calls on advertisers
to avoid using hyperlinks for disclosures that involve information
integral to the offer or claim, such as product cost or certain
health and safety issues. The new guidelines also call for
labeling hyperlinks as specifically as possible, and they caution
advertisers to consider how their hyperlinks will function on
various programs and devices.
For space-constrained ads, such as on some social media platforms,
the new guidance says advertisers must still provide disclosures
necessary to prevent an ad from being deceptive, and it advises
marketers to avoid conveying such disclosures through pop-ups,
because they are often blocked.
The .com Disclosures Guide is not a rule or regulation but general
principles that describe the type of disclosures the FTC expects
for digital advertisements. Although the Guide does not have
the force and effect of law, the failure to comply with a guide
might result in an enforcement action alleging an unfair or
deceptive practice in violation of the Federal Trade Commission
Act.
General Background
Generally, advertisers are responsible for ensuring that all
express and implied claims that an ad conveys to reasonable
consumers are truthful and substantiated. When identifying
these claims, advertisers should not focus only on individual
phrases or statements, but should consider the ad as a whole,
including the text, product name, and depictions. If an ad
makes express or implied claims that are likely to be misleading
without certain qualifying information, the information must be
disclosed.
A disclosure can only qualify or limit a claim to avoid a
misleading impression. It cannot cure a false claim. If
a disclosure provides information that contradicts a material
claim, the disclosure will not be sufficient to prevent the ad from
being deceptive. In that situation, the claim itself must be
modified.
Scope of the Guide
The .com Disclosures Guide only addresses disclosures required pursuant to laws that the FTC enforces. It does not address disclosures that may be required pursuant to local, state (e.g., many sweepstake requirements), or other federal laws or regulations (e.g., regulations issued by the Consumer Financial Protection Bureau ("CFPB") or the Food and Drug Administration ("FDA")). Specific statutes and regulations, including those enforced by the CFPB and FDA may have different requirements. Nonetheless, the Guide provides principles that federal and state regulators and private litigants may point to as a basis for when and how a disclosure should be made in digital advertising.
Guidance Highlights
Below are some highlights from the new Guide:
- Disclosure Standard – 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. Additional guidance includes:
-
- Don't assume that consumers read the entire website.
- Draw attention to the disclosure.
- If the disclosure can't be made to be clear and conspicuous, modify the claim so the disclosure is not necessary or don't use the claim.
- If the platform doesn't support the appropriate placement of the disclosure, then don't use it to disseminate the advertisement.
- Design Considerations – Disclosures should be "as close as possible" to the relevant claim. Hyperlinks should be avoided for disclosures involving key information and should not be used to bury advice or be buried themselves. Advertisers should label hyperlinks as specifically as possible. If there are indications that a significant portion of reasonable consumers are not noticing or comprehending a necessary disclosure, the disclosure should be improved. Hyperlinks should be used consistently and be obvious. Don't use pop-ups or other means to convey a disclosure that can be bypassed.
- Space Constraints – Unique features in online ads including social media and mobile devices, may affect how an ad and any required disclosures are evaluated. Don't assume that consumers will see each and every space-constrained advertisement if done in sequence, such as on Twitter. In addition, the Guide suggests that short-form disclosures might not be adequate to inform consumers of the essence of a required disclosure. Tweets, for example, could begin with "Ad:" and use "Sponsored" to convey when a message is sponsored. Consider what processes are in place to retain disclosures upon republication and if the content is printed.
- Evaluation of Disclosures – To evaluate whether a particular disclosure is clear and conspicuous, consider:
-
- Proximity and Placement – evaluate proximity; hyperlinks may be used, but not for integral or inseparable information; consider the label and placement of hyperlink
- Prominence – consider the size, color, device, and graphics
- Distracting Factors in Ads – don't let other parts of the ad get in the way
- Repetition – repeat as needed
- Multimedia Messages and Campaigns – for audio claims, use audio disclosures; for written claims, use written disclosures, display visual disclosures for a sufficient duration
- Understandable Language – avoid legalese or technical jargon, avoid diminishing the disclosure with extra material, icons and abbreviations cannot prevent a claim of misleading if a significant minority of consumers do not understand the meaning
The Guide uses 22 mock advertisements to present scenarios to illustrate one more of the above factors.
The FTC provides a summary of the .com Disclosures Guide at http://www.ftc.gov/opa/2013/03/dotcom.shtm.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.