Dallas Bar Association

Effective Digital Advertising Disclosures

by Debra L. Witter

 

Not so many years ago, a business that wanted to advertise its products had a relatively limited number of available platforms, most of which were static in nature. There were traditional print ads, television and radio and “out of home”—billboards, signs, etc. The rules of the road for what constituted an unfair or deceptive ad were generally understood.

Then came the Internet, which exponentially increased both the potential audience and the available delivery mechanisms for ads. Now, consumers can view ads via a dynamic, interactive platform. In 2000, the Federal Trade Commission (FTC) staff issued a guidance document on how to make effective disclosures in Internet advertising. It should be noted that because staff guidance lacks the force of law, failure to comply is not necessarily a violation, nor does compliance provide a safe harbor. Nonetheless, the FTC made clear that basic “truth in advertising” concepts applied to all advertising, including Internet advertising. Ads must be truthful and not misleading or unfair; claims must be substantiated; and any disclosures necessary to qualify an ad must be clear and conspicuous. The guidance focused on how to make such disclosures meaningful in a non-print advertising world, using a series of examples.

Thirteen years later, the nature of online advertising is dramatically different. Mobile devices—smart phones, text messaging-capable phones and tablets—present challenges for advertisers due to smaller screen sizes than traditional computers. Social media platforms such as Twitter limit the content of an ad to a finite number of characters. And social media can make it more difficult for the consumer to understand that content is an ad, such as a paid endorsement via Tweet or Facebook posting.

In March, 2013, the FTC revised its guidance, reissuing “.com Disclosures: How to Make Effective Disclosures in Digital Advertising,” available at www.ftc.gov/os/2013/03/130312dotcomdisclosures.pdf. As before, the updated guidance addresses how to make compliant disclosures via a series of examples. The most important takeaway for advertisers is plain: the FTC asserts that if an ad is viewable on a particular device or platform, any necessary disclosures should be sufficient to prevent the ad from being misleading when viewed on that device or platform. If that is not possible due to inherent limits in the platform or device, the ad should not be disseminated via that platform or device.

So, when designing an ad that may be viewed on mobile devices, the advertiser must give consideration to the physical and technological limitations of those devices. For example, a consumer may “pinch” or “zoom” a mobile device screen and thus miss an important disclosure. Preferably, scrolling will not be necessary to find a disclosure. If it is, there should be text or visual clues that encourage the consumer to do so. Ideally, the disclosure will be unavoidable—that is, the consumer cannot proceed without viewing it.

One solution often used in space-constrained ads is the use of a hyperlink to more detailed disclosure. The revised guidance confirms that this can be an acceptable method as long as the disclosure is not an integral part of an assertion or inseparable from it. For example, if an ad states a price, but there are additional fees that the consumer will have to pay, the existence of those fees must be clearly disclosed in the ad, even if the details are disclosed via hyperlinked text. The link must be obvious, and it should be clearly and specifically labeled so that the consumer understands its importance. The FTC believes that labeling a hyperlink “disclaimer,” “more information,” “terms and conditions,” or similar general language is not likely to do this. Moreover, important disclosures should not be buried in a long paragraph of unrelated text. The hyperlink should take the consumer directly to the disclosures. Advertisers should assess whether hyperlink disclosures are adequate by monitoring click-through rates.

The guidance also addresses the use of icons or short-form disclosures. For example, many advertisers had been using “#spon” (for “sponsored”) or certain visual icons to indicate when a tweet or text was actually a paid endorsement or advertisement. The FTC questions whether this is adequate. “Ad:” or “Sponsored” at the beginning of a tweet or text should be sufficient, but FTC is not yet prepared to accept use of icons or other abbreviations for disclosure, absent empirical evidence that their meaning is widely understood by consumers.

Although the road and the vehicles may be constantly changing, the FTC continues to advise advertisers that the rules of the road regarding deceptive or misleading advertising still apply.

 

Debra Witter is solo practitioner. She can be reached at dwitterlaw@aol.com.

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