A new set of legal standards now governs advertising in social media. Last month, the FTC released its revised “.Com Disclosures: How to Make Effective Disclosures in Digital Advertising,” setting new standards for making disclosures on space-constrained website, social media, and mobile platforms. While the original “Dot Com guides” had issued in 2000, advances in technology quickly rendered them incomplete. The new guides pick up where the old ones left off. They change the landscape for advertisers, putting a clear burden on them to ensure that consumers understand offers for sale of goods and services, regardless of the technology being used. In short, the FTC wants advertisers to be clear in their communications with consumers.
Applying basic principles of truth in advertising, the FTC’s new guides delve into the mechanics of making disclosures to prevent an advertisement from being unlawfully deceptive, false, or unfair. Advertisements that contain pricing claims, warranty information, product description details, sponsored endorsements, or negative option commitments often require more details for a consumer to understand fully the brand’s offer. (For an analysis of an advertising campaign that had questionable disclosures, see here.) Advertisers have increasingly relied on hyperlinks, hashtags, scrolls, and popups to make disclosures in mobile space, banner ads, tweets, and other social media posts. In its revised guides, the FTC reasserts that these digital techniques must meet a “clear and conspicuous” standard to be compliant with the law and scrutinizes the details of how to implement disclosures in space-constrained advertising.
While the 2000 guides enunciated standards for evaluating whether a disclosure is “clear and conspicuous,” the new guides add on to those standards in substantive ways. Any required disclosure must not just be proximate to the advertising claim. Instead, it must be “unavoidable” from the consumer’s perspective. Accordingly, an advertiser may need to repeat the disclosure in multiple locations and in different ways on different platforms to ensure that the consumer does not miss it.
When designing a multi-platform social media and digital advertising campaign, advertisers need to analyze how the advertising appears in all venues. Different devices may require different types of disclosures. A mobile phone has far less space than does a tablet or a computer, and the FTC is clear that advertisers must create flexible designs that fit all spaces. The FTC guides clearly state that technological limitations are not a defense to false or deceptive advertising charges. Even as new, smaller technologies appear, (e.g. smartwatches), the FTC will continue to hold advertisers to these standards. If digital advertisers find it difficult to comply with the FTC’s new guidelines because of the complexity of the goods or services or space constraints, the FTC offers succinct advice: don’t run the advertising.
How do all these principles apply to tweets, posts, banner ads, and other digital advertising that may appear on computers, tablets, mobile screens, or even smaller devices in the future (e.g. smartwatches)? The guidelines enumerate specific steps to take and practices to avoid.
Steps to Take:
- Optimize advertising so that disclosures are “unavoidable”, regardless of the device or platform, particularly mobile devices.
- Consider proximity in determining whether a disclosure has been made clearly and conspicuously.
- Label hyperlinks in an “obvious” manner that emphasize their importance and place them right next to the claim.
- Communicate all disclosure information within a single tweet or post.
- Design social media advertising for republication so that consumers do not accidentally truncate the disclosures.
- Make disclosures in clear, succinct, and easy to understand transparent language.
- Make all disclosures and conspicuously prior to a consumer adding any good or service to his shopping cart.
Practices to Avoid:
- Don’t run advertising that requires complex disclosures that cannot be made clearly and conspicuously in space-constrained advertising.
- Avoid any advertising design that has excess blank space, requires scrolling in any direction, or clicking through to multiple screens, particularly on mobile devices.
- Do not rely on generic link shorteners, or vague hashtags (e.g. #SPON for sponsored), especially in complying with the FTC Endorsement and Testimonial Guidelines. (For more information about the FTC’s enforcement on influencer marketing, see here.)
- Beware of distracting elements that interfere with the disclosures’ visibility.
- Do not rely on sending consumers from social media to a website if goods may be purchased at bricks and mortar locations.
- Do not use pop-ups to make disclosures.
- Avoid prechecked boxes to obtain affirmative consent from the consumer.
One final note: The FTC guides remind the advertiser of its ongoing responsibilities to the consumer. Once the advertiser has designed its disclosures and disseminated its advertising, the FTC requires the advertiser to do “reasonable monitoring” of the marketplace to ensure that its affiliated third parties are disseminating the disclosures properly and that consumers are understanding them.
The ultimate test of compliance is whether the “information intended to be disclosed is actually conveyed to consumers.” Undoubtedly, the FTC will start enforcing its new guidelines within the year. Now is the time for advertisers to audit their advertising. The audit team should include social media planners, influencer marketing specialists, traditional brand advertising managers, in-house legal counsel and outside specialized legal counsel. Together, the team should determine the necessary disclosures, examine current disclosure strategies, and analyze changes needed to minimize risk. Remember that legal challenges can come from the FTC, a competitor, or consumers.
An advertiser may need to overhaul its disclosure practices to comply with the revised Dot Com guides. In so doing, however, the advertiser will not only have proactively reduced risk, but it also will have seized the opportunity to enhance the brand’s image as an authentic and truthful advertiser. In the end, a sterling reputation will help to convert consumers into brand advocates on social media and customers at the cash register.
DISCLOSURE: This article does not constitute legal advice. If you have specific questions about how to interpret the FTC’s new “.Com Disclosures” guidelines, please contact this post’s author or another attorney.