New FTC Disclosure Guidelines For Social and Digital Advertisers

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Last month, the Federal Trade Commission (FTC) finally gave the digital advertising world what it’s been waiting for and badly needed for years: “Dot-com Disclosures: How to Make Effective Disclosures in Digital Advertising,” to replace the sorely outdated guidelines from 2000. The revised guidelines make clear that FTC truth-in-advertising principles apply to any medium, platform or device – no matter how new or small – and attempt to offer practical advice for complying with FTC disclosure requirements in online, social media and mobile advertising.

Two bedrock FTC advertising axioms underlay the new guidelines: 1) disclosure is required where necessary to prevent an ad from being deceptive or unfair; and 2) where disclosure is necessary, it must be “clear and conspicuous.” The updated guidance makes abundantly “clear and conspicuous” that these requirements apply without exception to any device. If a disclosure is required to make an ad on the smallest tablet or smartphone non-misleading, it must be made and has to be easy to see and understand. If space constraints make that impossible and the claim can’t be modified to moot the need for disclosure, then the ad shouldn’t run on the device.

What will make a disclosure “clear and conspicuous” in a digital ad? The FTC’s criteria are:

  • Placement and prominence of the disclosure and how close it is to the related claim
  • Whether the disclosure is unavoidable
  • Whether other parts of the ad distract from the disclosure
  • Whether the disclosure needs to be repeated to ensure it’s seen
  • Whether the language is understandable

The disclosure must be as close as possible to the relevant claim. Key information (i.e., price, health, safety) must always appear with the claim and hyperlinks are disfavored. If hyperlinks are necessary for space reasons, they can be used so long as they satisfy the tenets of “clear and conspicuous,” namely:

  • The link is obvious and placed as close as possible to the relevant information
  • It’s labeled to convey the nature and significance of the linked information (“see details” is not okay)
  • It takes consumers directly to the disclosure on the click-through page
  • The disclosure on the click-through page itself is noticeable and understandable

The revamped guide also strongly discourages scrolling to find a disclosure, especially horizontal scrolling on smaller screens which consumers rarely do (any need to scroll horizontally can be solved by having a mobile-optimized site). When scrolling can’t be avoided, effective text or visual cues need to lead consumers to the disclosure. Pop-ups are another FTC disclosure non-favorite since they can be easily blocked and are often ignored.

Where space constraints are acute, such as in tweets, the revised guidance encourages repetition of disclosures (such as republishing in “re-tweets”) and allows abbreviated disclosures as long as consumers understand them. For example, “Ad” should be adequate to indicate a tweet is sponsored, but not necessarily “#spon.”

Since mobile and social media ads are still so new, the FTC expects advertisers to monitor the effectiveness of disclosure techniques, keeping what works and improving what doesn’t. Over time, FTC “test cases” will further illuminate the meaning of “clear and conspicuous” in digital advertising. In the meantime, it behooves digital advertisers to study the whole 53-page document (including its 22 mock ads), located at www.ftc.gov.

About WilliamRothbard

William Rothbard was an attorney with the Federal Trade Commission, holding positions as an advertising enforcement attorney, Deputy Assistant Director of the Bureau of Consumer Protection, and Attorney-Advisor to FTC Chairman Michael Pertschuk. Bill has practiced law continuously since 1984, except for a two-year appointment as Counsel to the United States Senate Judiciary Committee, Subcommittee on Antitrust, Monopolies and Business Rights, in 1987-88. Bill writes a excellent blog with the latest news here.

14 thoughts on “New FTC Disclosure Guidelines For Social and Digital Advertisers

    1. geekmom

      The government needs to be on the right side of itself ;)

      I’d be interested to see all this in action. It’s always interesting how regulation will change the way people work because others can’t seem to stop that knee jerk reaction of buying something that might hurt them. Is that the advertiser’s fault? Honesty is the best policy, but people should start thinking for themselves, too.

  1. Eric Pangburn

    About time that something new has come out, but it will be interested to see what all is actually carried out. Not to mention how long it will take for them to come up with a new updated. Will it be as long it was since the last time it was updated.

    Very interested information though, and thanks for sharing!

    Eric

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  5. Hansika

    I must say it was really a good read. One must also measure performance, or else the unnecessary activities being performed will be wasting time, money and effort.

  6. Elisabeth Kuhn

    I just checked the report, and it doesn’t mention affiliates at all, except for in one instance. Is there another new report about that, or do the “old” rules still apply?

    Also, I’m wondering if the FTC disclosure rules also apply to special reports that may include affiliate links. I suppose inside the special reports, there should be a disclosure. However, would there have to be a disclosure in the ad/offer for the free special report?

    Thanks!

  7. Maynard

    I really hate/love the FTC at the same time. They really go hard at people and it is kinda scary at times.

  8. Jesse

    I love it when William posts on here. Great information and very resourceful. Thanks for sharing

  9. Ryan

    I got so many other things to think about, the last thing I want to do right now is read a 53 page document.

    I think I’ll just continue about my business and try to be as honest as I can, but you know what? I would have done that anyway without the FTC pushing it.

Comments are closed.