Following its September workshop, the Federal Trade Commission published a report on “Putting Disclosures to the Test.”
Almost 1,000 individuals attended the workshop—225 in person and 735 via webcast—to discuss the effectiveness of disclosures and how to conduct testing to evaluate their effectiveness. Chairwoman Edith Ramirez kicked off the workshop by discussing FTC guidance and enforcement actions related to disclosures, and emphasizing the importance of testing disclosures.
“We aim to highlight the importance of empirical analysis of disclosures and encourage marketers, businesses, and other organizations to test their own disclosures and learn from research,” she told attendees. “Ineffective disclosures can overwhelm, confuse, or even distract consumers from making informed choices.” She encouraged businesses to “pay attention to ensuring that disclosures provide useful information that can translate into consumer action.”
Participants in the discussion noted that disclosures may be delivered offline or online through icons, product labels, short text, long text, audio or video messages, interactive tools, or other media. Disclosures may be necessary to limit or qualify marketing claims to prevent deception, and can also communicate a wide range of other information that consumers need to make informed decisions in the marketplace. Multiple factors impact the effectiveness of disclosures, including whether they contain the most essential information and whether they are noticed by consumers.
Workshop panelists shared various cognitive models and evaluation methods that can be used to assess disclosure effectiveness, including eye tracking studies and post-study questions. Panelists also highlighted common testing problems. For example, one should not assume that an individual who clicks on or observes a disclosure is actually aware of the disclosure or understands its message. Additionally, disclosure testing should not be conducted using populations other than the intended audience of the particular advertising. Also, advertisers should not assume that the results from any prior testing will hold under new circumstances.
A panel devoted to exploring whether and when consumers pay attention to disclosures reported that presenting both audio and text disclosures led to a poorer understanding than presenting a text disclosure by itself. The panel recommended that the most important and likely to be novel information be placed up front. Panelists also noted the importance of using multiple testing methods to evaluate disclosures.
Regarding the evaluation of how well consumers comprehended disclosures, the discussions emphasized that study participants should be asked to perform some analysis that can be measured for accuracy. Panelists also highlighted the effectiveness of lower-cost testing approaches, including new approaches to eye tracking and crowdsourcing platforms. Surveys, online experiments, observational studies, and field experiments can all evaluate the impact that disclosures have on consumers’ decision-making and behavior, panelists said.
In considering the future of disclosures, attendees debated use of an app that would learn to predict the types of permissions a user would allow based on prior responses to disclosures. While arguably more efficient, the app presented some legal and ethical issues, including how to address incorrect predictions made by the app.
To read the FTC’s staff summary, click here.
Why it matters: Based on workshop input, the staff summary concluded that disclosure evaluation is a topic of broad interest that includes a large number of disciplines. A variety of methodologies exist to test disclosure effectiveness, and panelists shared a number of ways to improve disclosure design. There may also soon be an app for disclosures, which could reduce the burden on consumers.