In March, the Federal Trade Commission issued updated advertising guidelines to take into account the challenges created by the rapid growth of mobile and online advertising platforms, particularly small screen size and other space constraints. The revised guidelines, “.com Disclosures: How to Make Effective Disclosures in Digital Advertising,” seek to help businesses apply many of the same principles espoused in the previous version of the guidelines to modern technologies and marketing channels.
WHAT’S THE SAME: The guidelines emphasize that traditional consumer protection laws—most importantly, the FTC Act §5’s prohibition on “unfair or deceptive acts or practices”—apply with equal weight to advertising online and in new media. The guides also make clear that “advertising” encompasses all forms of promotional content, from online advertising, marketing, and sales, to promotional activities, testimonials, social media, blog posts and other forms in use now or in the future. As ever, if a disclosure is required to prevent an advertisement from being deceptive or unfair, the disclosure must be “clear and conspicuous.” In evaluating whether a disclosure is clear and conspicuous, advertisers should consider (1) the placement of the ad and the proximity of the ad to the claim it modifies; (2) the prominence of the disclosure; (3) whether the disclosure is unavoidable; (4) whether other parts of the advertisement distract attention from the disclosure; (5) whether the disclosure needs to be repeated at different places on a Web site; and (6) whether the disclosure is understandable to the intended audience.
WHAT’S NEW: Elements like small screen size, space constraints, and republishing can create challenges for advertisers attempting to create an effective disclosure. Disclosures must be “clear and conspicuous,” which means at the very least that the disclosures must be prominent and unavoidable across all platforms on which the claim may be displayed. A disclosure that may be prominent and unavoidable in one media (i.e., a desktop screen) may not be sufficient if a user views the claim in another (i.e., on a smart phone). Moreover, space-constrained ads like banner ads and tweets are not exempt from these disclosure requirements and must meet the disclosure principles or modify the claim so that disclosure is unnecessary. The revised Guidelines provide helpful examples of how the basic advertising principles can be applied in the new media space.
Hyperlinks can be useful to access disclosures that are not integral to the claim, particularly if the disclosure is lengthy or if it needs to be repeated. Hyperlinks are most effective if the links meet some or all of the following criteria:
From the FTC’s perspective, if a disclosure is necessary to prevent an advertisement from being deceptive or unfair and it is not possible to make the disclosure clearly and conspicuously across all platforms, then that ad should not be disseminated. Remember that the effectiveness of a particular disclosure will always be fact-specific and strict adherence to these Guidelines does not create a Safe Harbor. Rather, the ultimate test of the effectiveness of the disclosure is whether the information intended to be disclosed is actually conveyed to consumers.
For additional analysis by Orrick of the FTC's guidelines, click here (pdf).