It’s the holiday season, and many of us are turning our thoughts to celebrating with friends and family. It is also high season for shopping, which means the airwaves, social media, websites and print pages are full of opportunities to buy, sell, and advertise. Whether you consider that to be a feature or a bug, this is the time to be especially vigilant about doing advertising right. In this post we present a few considerations to keep in mind to avoid starting 2017 with unwanted attention from the Federal Trade Commission (FTC), the Federal Communications Commission (FCC) or other regulators.

  1. Weight-loss and other health claims. The most popular New Year’s resolutions are to “stay fit and healthy” and “lose weight.” Weight-loss products and services have long been a favorite target of the FTC, and the FTC has asked for help from broadcasters and publishers to help spot false health claims before they are aired or published. (And, as the FTC notes, purveyors of false advertising claims take advantage of the good will that broadcasters and publishers have with consumers.) The FTC is just as interested in going after false health claims online and in the app marketplace. We can expect the FTC to resolve to keep watching this space in 2017.
  2. Endorsements and testimonials. Since time immemorial advertisers have recognized the power of a good word from a respected – or at least well-known – personality. But such praise has to reflect the honest opinion of the endorser, and any unexpected “material connection” – whether it is money, free merchandise, an early look at a new video game, or even the expectation of some kind of payment in the future – has to be clearly and conspicuously disclosed to consumers. Would consumers expect that Trinket the Elf who appears on the air to praise the quality of Santa’s toys is also employed by Santa? Maybe. To be on the safe side, make sure the connection is clear in any video, audio, social media, or other content that conveys Trinket’s praise.
  3. Native advertising and sponsored content. Ensuring that the format of advertising does not deceive consumers is just as important as making sure that an ad’s claims, testimonials, and other elements are true and not misleading. Over the past few years the FTC has taken a keen interest in “native” advertising, meaning ad formats that may deceive consumers because they are difficult to distinguish from editorial content. After issuing enforcement guidance in December 2015, the FTC announced an action against Lord & Taylor, alleging that the retailer paid an online fashion magazine to run an article, which Lord & Taylor reviewed and approved, that featured a picture of the dress that Lord & Taylor wanted to promote. The FCC’s sponsorship identification rules likewise insure “transparency” so that consumers are not misled as to who is trying to persuade them about a commercial product. These rules require that a sponsor be identified when a station receives valuable consideration for the airing of a program broadcast to the public. As we have written about here and here, simply providing a recorded program unduly promoting a commercial product has been found to be sufficient to trigger the FCC’s sponsorship identification rules.
  4. Use of Trademarks in Hashtags. Use of hashtags (words or phrases preceded by a pound (#) sign) has quickly become a popular social media trend and can be a great way to promote products and services online. While they are largely meant to serve as a functional tool to facilitate searches and to categorize information and conversations on social media, they can also open the door to potential legal issues. While the law in this emerging area remains unsettled, at least one court has found that use of a competitor’s trademark in a hashtag could result in trademark infringement. Likewise, use of your own registered trademark in a hashtag could present challenges when it comes to policing the mark. Hashtags are intended to generate online buzz, with the goal of having as many people as possible use them. But what if consumers use the hashtags improperly or inappropriately? If you are planning to create a hashtag campaign, either for your own stations or on behalf of advertisers, be sure to think through their costs and benefits.
  5. Marketing to children. Children are at the center of many holiday celebrations, so it’s no surprise that advertisers want to reach them (and their parents). But advertising to children deserves some extra caution. First, if you have an app or website that is directed toward children under the age of 13, or if you knowingly collect information online from the under-13 set, then the Children’s Online Privacy Protection Act (COPPA) probably applies to you. The rules for handling children’s information under COPPA are much stricter than they are for the online advertising in general, beginning with a requirement to obtain verifiable parental consent before collecting any personal information from children. Second, children’s advertising is evolving with the marketplace in general to include greater use of social media and user-generated video platforms. This means that the need for careful handling of endorsements and native advertising applies to ads designed for children, too. Although the FTC has yet to bring an enforcement action based on native ads or undisclosed endorsements in ads that target children, the FTC has received public complaints (see here and here) urging the agency to do just that.
  6. Music in commercials. As we’ve about here and here, contrary to what some stations might think, a station’s ASCAP, BMI and SESAC royalties do not give them the right to use popular music in their station productions – or in their commercials. Nor do they give you rights to use music in video productions used repeatedly on a station, or on a station’s website. Broadcasters should take care to ensure that they’ve got the appropriate licenses in hand before producing a spot that includes a holiday jingle

Businesses want to put their best foot forward during the holiday season. We hope these tips will help you step into 2017 with the confidence that you have consigned any marketing legal pitfalls to the return bin.