Advertising In 2013 : The FTC Law to ‘dot com’

Advertising In 2013 : The FTC Law to dot com image ftc rules for online advertisers by fa ndiayeAdvertising In 2013 : The FTC Law to dot com

Advertisers have the flexibility to be creative in designing their ads, as long as necessary information is communicated effectively and the overall message conveyed to consumers is not misleading » (FTC.2013)

The Commission has brought countless law enforcement actions to stop fraud and deception online and works to educate businesses about their legal obligations and consumers about their rights. The term « online » includes advertising and marketing via the Internet and other electronic networks. It is device neutral and encompasses advertising and marketing on mobile devices, such as smartphones and tablets, and sales online, as well as the same activities in print, television, telephone, and radio.

The Commission’s authority covers virtually every sector of the economy, except for certain excluded industries, such as common carrier activities and the business of insurance, airlines, and banks.

Background on Disclosures
Advertisers are responsible for ensuring that all express and implied claims that an ad conveys to reasonable consumers are truthful and substantiated. When identifying these claims, advertisers should not focus only on individual phrases or statements, but should consider the ad as a whole, including the text, product name, and depictions. If an ad makes express or implied claims that are likely to be misleading without certain qualifying information, the information must be disclosed.

Advertisers are responsible for ensuring that their messages are truthful and not deceptive. There is no set formula for a clear and conspicuous disclosure; it depends on the information that must be provided and the nature of the advertisement. Some disclosures are quite short, while others are more detailed. Some ads use only text, while others use graphics, video, or audio, or combinations thereof.

Proximity and Placement
For print ads, an advertiser might measure proximity in terms of whether the disclosure is placed adjacent to the claim, or whether it is separated from the claim by text or graphics. The same approach can be used for online ads. Websites, and mobile applications, however, are interactive and have a certain depth — with multiple pages or screens linked together and pop-up screens, for example — that may affect how proximity is evaluated.

Mobile devices also present additional issues because a disclosure that would appear on the same screen of a standard desktop computer might, instead, require significant vertical and horizontal scrolling on a mobile screen. In evaluating placement, advertisers should also take into consideration empirical research about where consumers do and do not look on a screen.

In addition, computers, tablets, smartphones, and other connected devices have varying screen sizes that display ads and websites differently. In these situations, an advertiser might place a disclosure where consumers might have to scroll to reach it.

When advertisers are putting disclosures in a place where consumers might have to scroll in order to view them, they should use text or visual cues to encourage consumers to scroll and avoid formats that discourage scrolling.
Text prompts can indicate that more information is available. An explicit instruction like “see below for important information on restocking fees” will alert consumers to scroll and look for the information. The text prompt should be tied to the disclosure to which it refers. General or vague statements, such as “details below,” provide no indication about the subject matter or importance of the information that consumers will find and are not adequate cues.

The visual design of the page also could help alert consumers to the availability of more information. For example, text that clearly continues below the screen, whether spread over an entire page or in a column, would indicate that the reader needs to scroll for additional information. Advertisers should consider how the page is displayed when viewed on different devices.

Readers will also likely stop scrolling when they see the information and types of links that normally signify the bottom of a webpage, e.g., “contact us,” “terms and conditions,” “privacy policy,” and “copyright.” In addition, if there is a lot of unrelated information — either words or graphics — separating a claim and a disclosure, even a consumer who is prompted to scroll might miss the disclosure or not relate it to a distant claim they’ve already read.

Hyperlinks should not be used to communicate disclosures that are an integral part of a or inseparable from it, including important health and safety information. (Learn more about regulation on hyperlinks)

Displaying Disclosures Prior to Purchase
Disclosures must be effectively communicated to consumers before they make a purchase or incur a financial obligation. Where advertising and selling are combined on a website or mobile application — that is, the consumer will be completing the transaction online — disclosures should be provided before the consumer makes the decision to buy, e.g., before clicking on an “order now” button or a link that says “add to shopping cart.”

Evaluating Proximity in Space-Constrained Ads
“Tweet Ads Need Some Fine Print” ( Tom Gara.2013)

Many space-constrained ads displayed today are teasers. Because of their small size and/or short length, space-constrained ads, such as banner ads and tweets, information about a product or service. Often, consumers must click through to the website to get more information and learn the terms of an offer. If a space-constrained ad contains a claim that requires qualification, the advertiser disseminating it is not exempt from disclosure requirements.

Short-form disclosures might or might not adequately inform consumers of the essence of a required disclosure. For example, “Ad:” at the beginning of a tweet or similar short-form message should inform consumers that the message is an advertisement, and the word “Sponsored” likely informs consumers that the message was sponsored by an advertiser. Other abbreviations or icons may or may not be adequate, depending on whether they are presented clearly and conspicuously, and whether consumers understand their meaning so they are not misled. Example : Misleading a significant minority of reasonable consumers is a violation of the FTC Act (Deception Policy Statement at 177 n.20).

Businesses, as well, should consider these criteria when developing online ads and ensuring they comply with the law. The FTC has enforced and will continue enforcing its consumer protection laws to ensure that products and services are described truthfully online, and that consumers understand what they are paying for. These activities benefit consumers as well as sellers, who expect and deserve the opportunity to compete in a marketplace free of deception and unfair practices.

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