Hazel wrote a summary blog post earlier this month about the newly revised FTC guidelines (130312dotcomdisclosures) for app developers, paid Tweeters, and online advertisers, with the quick and dirty high points.
I just finished reading and studying the various examples in the staff guidance document, and I’m going to detail a couple of the key takeaways.
The main point of the document (and accompanying video) is to caution marketers to reign in their exuberance when using new mediums to promote in a manner that might be frowned upon if the FTC were to take a closer look at their efforts.
The FTC regulates commerce in the US; their stated mission includes “To prevent business practices that are anticompetitive or deceptive or unfair to consumers…” and their enforcement abilities include freezing bank accounts and other assets (a common practice when they are filing a formal complaint against a company) – they almost always freeze personal accounts and those of spouses as well as corporate accounts. During an investigation in 2000 of a prominent performance marketing network, the bank account of an ‘soon to be’ former spouse was frozen amidst a pending divorce from one of the defendants.
They also are committed “to accomplish this without unduly burdening legitimate business activity” and therefore publish guidelines and suggestions as to how to stay out of hot water while marketing your products and services to consumers.
The FTC says that “there is no litmus test for determining whether a disclosure is clear and conspicuous” in Section 1, and contains several examples that detail mobile ad space usage and Twitter as an ad medium, but makes two key references to responsive design –
At first glance, this appears to be a loophole in the directive, since responsive design is not necessarily going to make a disclosure appear in the location that the FTC would deem appropriate, but it would follow that if a site had used responsive design, they could perhaps submit that as a reason for their advertising practices. Until someone attempts to use this excuse (and it could be years before it comes to that), we won’t really know how aware of responsive design that the FTC actually is, compared to what some claim it does. I can think of at least 3 ways the average WordPress site theme could be tricked into displaying disclosures in locations that might not pass any litmus test, and I’m a consultant with very few technical skills.
Next up is the Twitter specific descriptions and examples of how the FTC wants advertising in Tweets, especially for endorsements.
- You must use a single Tweet to encompass the ad, the claim, and the average results of the claim. In this example, it appears that someone famous (JuliStarz) has used Fat-away Pills and lost 30 lbs in 6 weeks and thinks it’s a great product.
The FTC says this is not enough, since JuliStarz was paid to promote the product and that’s not clear in the Tweet. It’s also misleading because even if Juli did lose 30 lbs in 6 weeks, that’s not the average consumer’s results. They also state that Juli can’t have one Tweet with the information included above and another Tweet that says she’s being paid to endorse the product, since the nature of Tweets is that the two might become separated and the consumer would not associate them in a stream of incoming Tweets, especially if they were separated by multiple Tweets from other users.- The correct method of handling a sponsored Tweet, according to the FTC, looks like this:
- The word Ad: including the colon and the space after account for 4 characters, and the average claim needs to be in there as well. Unfortunately in this FTC example, there’s nowhere left for a product URL, even a shortened one!
There are more examples, addressing mobile devices and smartphones; frankly, these should be common sense for advertisers who choose to market in a manner that isn’t deceptive or misleading to consumers.
- Make sure the disclosures are on the same page as the product
- Do not force viewers to click through multiple pages or scroll horizontally to see the disclosures
- Keep the disclosures close to the product in question
- Do not subject potential buyers to lengthy terms and conditions in small print on a small screen
- Do not use pre-checked boxes for negative option offers
- Be sure to place the disclosures prominently on the page BEFORE the buyer starts the purchase process
Being the target of an FTC investigation is a sure fire way to get your business completely off track, sometimes for long enough to kill your business. If you’re in a business that could be a target, and you’re not planning to re-structure your ad methods, make sure you’ve pre-paid your attorney since you won’t have access to funds when they come knocking on your door. Or you could choose Door #1 and get into compliance before you find yourself in the spotlight.