Background
I “attended” an FTC Webinar yesterday on “Advertising and Privacy Disclosure in a Digital World”. There was a lot of great information that I will cover in this and subsequent blog posts.
The FTC requires all ads be “truthful, accurate, and not misleading”. Advertisers often need to disclose additional details in the ad, to meet this requirement. This disclosure requirement applies even in the digital world.
Discussion
Advertising “disclosures” cannot contradict claims made in the advertisement itself; must be clear and conspicuous; must be prominently placed so the consumer will see them; and must be in close proximity to the claim it modifies.
These FTC requirements can be difficult to meet when there is limited screen space. On desktops, advertisers often require the user to scroll or page down to view the disclosure. These disclosures may not even be valid, because they are not in close proximity to the issue they modify. Advertisers must also be aware that unsophisticated tech users may not even know to scroll down to look for additional information. If the “call-to-action” is above the fold, the disclosure should be there too.
Space limitations on phones, does not eliminate the duty to disclose. If a link is needed, be specific so the consumer knows to click through. Don’t call it “Details”; label it “purchase terms” “restrictions” or “restocking fee”. Be obvious. Multiple clicks to get to the disclosure should be avoided. Also, disclosures must not occur in the Terms of Service.
The scope of the disclosure often depends on the consumer and the context. An example discussed was a text offer: “Discounted cup of coffee with a purchase.” How to disclose the type of purchase required depends on whether the text was: (i) a general blast; (ii) a blast to specific people; (iii) a blast to people in a specific location; or (iv) a blast to people who are part of a club that always receive these messages.
Advertisers who use third-party platforms (i.e., eBay, Facebook, Twitter) must also comply with the platform requirements as well as FTC requirements. Additionally, visual cues (i.e., bold, font color, italics) to indicate a disclosure may work on websites but not other platforms that don’t support visual cues.
Why You Should Care
When determining the adequacy of any disclosure, the FTC focuses on a “reasonable consumer”. However, this standard might be different in each state because of state consumer protection laws. Companies must devise disclosure strategies specific for each platform and each location they advertise. Factors such as: (i) who the ad recipient is; (ii) the sophistication of the recipient; (iii) the product itself; and (iv) the ad platform will dictate the elements of the disclosure. Ultimately, advertisers control the disclosures because they control the claims being made.
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