Advertising Law Alerts

March 13th, 2013

New FTC Guidelines on Digital Ads

Yesterday, the staff of the Federal Trade Commission issued new guidance to advertisers about how to make effective disclosures in digital advertising. Updating the 2000 "Dot Com Disclosures" guidance, the new guidance, ".com Disclosures: How to Make Effective Disclosures in Digital Advertising," addresses technological developments over the last 10+ years, including the increased use of smart phones for advertising and social media marketing.

The new guidance makes clear that consumer protection laws governing advertising apply equally to marketers in both traditional and digital media. Therefore, any disclosures necessary to make a claim truthful and adequately substantiated for a reasonable consumer must be clear and conspicuous, even if the space for them is limited by the medium. In addition, such disclosures must be made before consumers make a decision to buy.

Departing from the earlier guidance, however, the new guidance stakes new ground that may require advertisers to make significant changes in their digital advertising, including even in their functionality and architecture. Some significant watch-outs in the new guidance include:

  • If a particular platform does not provide sufficient opportunity to make clear and conspicuous disclosures, that platform should not be used. In other words, inadequate space is not an excuse: compliance comes first.
  • Because consumers don't necessarily enter a website at the homepage or any particular page, it may be necessary to repeat disclosures related to a claim or offer several times. Moreover, the disclosures must be "unavoidable" and should appear before a consumer gets to the order screen.
  • Hyperlinks, where appropriate for disclosures, must be explicitly labeled; use of "disclosures" or "terms" or, even, "important information" may not be adequate.
  • Because of the small screens on smart phones (and some tablets), and the need to zoom in on copy to make it legible on the smaller screen, consumers may miss necessary disclosures. Therefore, optimizing websites for mobile devices should be done as a matter of course.
  • Advertisers must be aware of technological limitations when considering whether a technique is appropriate for providing disclosures. For example, pop-ups can be prevented from appearing by pop-up blocking software and mouse-overs may not work in the mobile environment.
  • Short-form disclosures in space-constrained ads, such as on Twitter or Facebook, may not be adequate. Advertisers may need to gather empirical evidence to show that abbreviations and icons work in communicating required disclosures to consumers.
  • Advertisers should be sure to review the new guidance and the mock ads included as exhibits to the guidance. Although the new guidance does not have the force of law, advertisers should expect FTC staff to look to it to determine whether any particular advertising campaign is unfair or deceptive. A company that fails to comply with the guides may well find itself the subject of an enforcement action.

If you have any questions about this alert, or about any other advertising law issues, please contact Terri Seligman at (212) 826 5580 or tseligman@fkks.com, or Jeffrey A. Greenbaum at (212) 826 5525 or jgreenbaum@fkks.com, or any other member of the Frankfurt Kurnit Advertising, Marketing and Public Relations Group.