On March 12, 2013, the Federal Trade Commission (FTC) released new guidance for advertising online. Entitled “.com Disclosures: How to Make Effective Disclosures in Digital Advertising,” the new guidance comes in response to consumers’ growing use of mobile devices and social media applications, and advertisers’ efforts to reach consumers via these new devices and media. The FTC’s guidance emphasizes that the same consumer protection laws that apply to traditional advertising also apply to online advertising. The FTC issued the guidance, however, to address some of the unique advertising issues that arise in advertising on mobile devices and in social media.
It is well-established that advertisers have a duty to disclose no matter what the medium. As the FTC stated in its 2000 guidance entitled “.com Disclosures: Information About Online Advertising,” if a disclosure is needed to prevent an advertisement from being deceptive or unfair, the disclosure must be clear and conspicuous. Under the new guidance, the FTC explains that the disclosure must be clear and conspicuous on all devices and platforms on which consumers will view the ad. The new guidance thus encourages advertisers to consider how their advertisements will be viewed by consumers and then tailor any necessary disclosures accordingly. It also instructs advertisers to adopt the perspective of a reasonable consumer and assume that consumers do not read an entire website or even screen.
For example, mobile devices and social media applications like Twitter have inherent space limitations, but these space limitations do not change the duty to disclose. Advertisers should consider using short form disclosures, such as “Ad:” at the beginning of a tweet or including the word “Sponsored” in a short message. The disclosure should be “as close as possible” to the relevant claim with minimal scrolling required. The size, color and graphics of the disclosure, particularly in relation to the rest of the advertisement, are important. The disclosure should be prominent and other elements of the advertisement should not distract consumers from the disclosure. It should also be as simple and straightforward as possible and avoid legalese. In determining proximity and placement of disclosures on mobile devices, the new guidance provides that advertisers should consider empirical research about where consumers do and do not look on a screen. Finally, pop-up disclosures are discouraged because they are often blocked.
Many advertisers also now use hyperlinks to make required disclosures. Although such disclosures are permissible, the new guidance encourages advertisers to embed the disclosures within the text of the advertisement. If hyperlinks are used, the FTC directs advertisers to clearly and specifically label them and cautions against using them for key information, including price, health and safety information. As with other disclosures, advertisers should consider how each hyperlink will appear and function across multiple devices and applications used by consumers. Effective hyperlinks are noticeable on the screen, regardless of the medium, and designated in the same way (e.g., consistent font and color) throughout the advertisement. In addition, the FTC encourages advertisers to pay attention to click-through rates—i.e., how often consumers click on a particular hyperlink and view the relevant disclosure. “If there are indications that a significant proportion of reasonable consumers are not noticing or comprehending a necessary disclosure, the disclosure should be improved.” FTC Guidance, p. 7.
Importantly, the burden is on the advertiser—not the platform where the advertisement will be shown (e.g., Facebook)—to design the advertisement and any necessary disclosures to fit the platform. If the disclosure cannot be made clearly or conspicuously on the device or platform, and the ad is incomplete or deceptive without it, then the advertisement should not run on that particular device or platform.
The new guidance demonstrates the FTC’s increased focus on emerging digital advertising and media and signals that advertisers should focus on the unique challenges of the new media platforms and applications to ensure that advertising claims are truthful and not misleading.
The FTC’s new guidance is available for download.