On March 12th, the Federal Trade Commission (“FTC”) released the long awaited updates to the Dot-Com Disclosures, which contain guidance for making clear and conspicuous disclosures across all platforms. To put the need for the updated disclosures in context, the original disclosures were issued in 2000 — four years before the launch of Facebook, six years before the launch of Twitter and seven years before Apple released the first iPhone. The updated Dot Com Disclosures recognize the special concerns of the evolving online and mobile marketplace and provide guidance on providing disclosures for use in social media and mobile applications.
In the Updated Dot Com Disclosures, the FTC makes clear that the basic principles of advertising apply to online and mobile advertising. Ads must be truthful, substantiated and fair. In addition, disclosures in ads must be clear and conspicuous. Keeping these underlying principles in mind, the Dot Com Disclosures seek to provide marketers with guidance on adapting long held advertising principles to the world of apps and social media.
Perhaps the most difficult task of an online and mobile marketer is to convey important disclosures in the context of the limited screen size. While there is no set formula to determine whether a disclosure is adequate, the FTC has provided guidance to help evaluate the sufficiency of the disclosure. In evaluating the facts surrounding whether a particular disclosure is clear and conspicuous, the FTC considers six factors: 1) Proximity and Placement; 2) Prominence; 3) Distracting Factors in Ads; 4) Repetition; 5) Multimedia Messages and Campaigns; and 6) Language.
Traditionally, the closer a disclosure is to the claim it qualifies, the more effective the FTC considers the disclosure. In traditional advertising, an advertiser might measure proximity in terms of whether the disclosure is placed adjacent to the claim, or if it is separated by text or graphics. Websites and mobile applications, on the other hand, are interactive and often are made up of multiple elements (i.e., multiple pages or screens linked together, pop-ups, etc.) that impact how proximity is evaluated. When creating ads, considering the following tips:
- Disclosures that are only viewable through scrolling should be avoided, if possible. When scrolling is necessary, use text or visual cues to encourage consumers to scroll to view the disclosure. (Scroll bars alone are not a sufficient visual cue.)
- Hyperlinks can be used in certain situations (i.e., Twitter), but disclosures that are an integral or inseparable part of a claim should not be communicated via hyperlink. The hyperlink should be labeled in such a way that its importance is obvious to the consumer. It should be placed as close as practicable to the claim, and be structured so consumers are able to access the information quickly.
- Don’t ignore technological limitations. For example, a disclosure that requires Adobe Flash Player will not be displayed on certain mobile devices.
- Try to avoid pop-up disclosures. Advertisers should not disclose necessary information through the use of pop-ups that could be prevented from appearing by pop-up blocking software.
- The disclosure should be made prior to purchase and should be provided before the consumer makes clicks an “add to cart” or “buy now” link.
- If a disclosure is required in a space-constrained ad, such as a tweet, the disclosure should be in each and every ad that would require a disclosure if that ad were viewed in isolation. Advertisers should not assume that consumers will see the prior disclosure.
The burden is on the advertiser to draw attention to required disclosures. In considering the adequacy of disclosure prominence, advertisers must consider size and color of the disclosure in relation to the rest of the website or ad. The advertiser should also account for the possibility of viewing the ad on different devices, and take care not to bury the disclosure. Disclosures should be in a font as least as large as the associated claim and should be made in a color that contrasts with the background. Although not required, in certain instances, graphics can make disclosures more prominent and recognizable to the consumer.
Distracting Factors in Ads
The clear and conspicuous analysis does not consider only the disclosure, but the disclosure in relation to the ad as a whole. With this in mind, the advertiser must make sure that other parts of the ad do not get in the way of the disclosure. Moving visuals, flashing images, or animation (such as a talking spokesperson) may undermine the effectiveness of a disclosure.
In certain situations, it may be necessary to repeat a disclosure to ensure that a consumer is aware of it. If claims requiring qualification are repeated throughout an ad, it may be necessary to repeat the disclosure each time the claim appears. Repetition is especially helpful in situations where a consumer has the ability to enter a site at different points and may miss the first disclosure.
Multimedia Messages and Campaigns
Online ads may be presented in multiple mediums: audio, video, text, animated segments, or augmented reality experiences. Disclosures remain mandatory, regardless of the medium. In particular, advertisers should be use the same medium for the disclosure and the ad. At minimum, audio claims should use audio disclosures and written claims should use written disclosures, and any visual disclosures should be displayed for a sufficient duration.
Keep it simple. The language in the disclosures must straightforward such that consumers can readily understand the disclosure (i.e., legalese and technical jargon should be avoided). If the consumer cannot understand your disclosure, it likely does not meet the clear and conspicuous standard.
While the Dot Com Disclosures are not law, they clearly indicate what the FTC considers acceptable and what it considers misleading, with regard to online and mobile advertising. Companies that fail to comply with the revised Dot Com Disclosures run the risk of being targeted by the FTC for enforcement or of drawing false advertising complaints from state consumer protection agencies or private parties. Thus, advertisers should take a proactive approach to ensure compliance with the Dot Com Disclosures, and consider the above factors as well when developing their ads. A copy of the complete Dot Com Disclosures can be found here.