FTC Releases Revised Online Advertising Disclosures | Practical Law

FTC Releases Revised Online Advertising Disclosures | Practical Law

The FTC recently released a revised version of its online advertising disclosure guidelines. The new guidelines reflect the expanding use of smartphones and social media in marketing and advertising.

FTC Releases Revised Online Advertising Disclosures

Practical Law Legal Update 5-525-1745 (Approx. 5 pages)

FTC Releases Revised Online Advertising Disclosures

by PLC Commercial
Published on 15 Mar 2013 • USA (National/Federal)
The FTC recently released a revised version of its online advertising disclosure guidelines. The new guidelines reflect the expanding use of smartphones and social media in marketing and advertising.
On March 12, 2012, the FTC released online advertising disclosure guidelines, .com Disclosures, an update of a previous version from 2000. The new guidelines:
  • Emphasize that the FTC Act and basic principles of advertising law apply equally to:
    • traditional commercial advertising mediums like print, television and radio; and
    • online platforms, including the mobile marketplace.
  • Describe how these well-established truth-in-advertising principles apply to the unique features of online mediums. For example, the guidelines:
    • address online mediums that are space-constrained, such as those imposed by smartphone screens and character limitations in social media; and
    • use mock ads to illustrate how advertisers should apply the existing guidance to newer media platforms.
To avoid future FTC investigations and legal actions, online markers and advertisers should carefully review these new guidelines and, where necessary, change their advertising strategies to conform.

The FTC Act and Online Advertising

Generally, the revised guidelines:
  • Reiterate that the following basic FTC Act principles apply to online ads:
    • if an ad makes express or implied claims that are likely to be misleading without qualifying information, then the qualifying information must be disclosed;
    • ads claims must be substantiated;
    • ads cannot be unfair; and
    • if a disclosure is required to prevent an ad from being deceptive or unfair, the disclosure must be clear and conspicuous.
  • Advise advertisers to incorporate relevant disclosures into the underlying claim, rather than listing the disclosures in a separate statement.
  • Suggest practices to make online disclosures clear and conspicuous. When evaluating whether online disclosures are clear and conspicuous, the revised guidelines advise advertisers to consider:
    • placement and proximity to the relevant claim;
    • prominence;
    • whether the disclosure is unavoidable;
    • whether other parts of the ad distract attention from the disclosure;
    • whether the disclosure should be repeated at different places on a website;
    • if an audio message, whether the volume and cadence are adequate;
    • if visual, whether disclosures appear for a sufficient duration; and
    • whether the language is understandable to the intended audience.
Importantly, the guidelines specify that for online ad claims:
  • When disclosure is required it must be clear and conspicuous on all devices and platforms on which consumers will view the ad.
  • If disclosure cannot be made clearly and conspicuously on a device or platform, that device or platform should not be used.

Creating Clear and Conspicuous Disclosures in Online Advertising

When addressing disclosure clarity and conspicuousness, the revised guidelines focus on:
  • Proximity and placement.
  • Hyperlinks.
  • Space-constraints.
The revised guidelines include series of mock ads to illustrate these areas of concern.

Proximity and Placement

The revised guidelines state that disclosures should be "as close as possible" to the relevant ad claims to ensure that they are clear and conspicuous. This standard is more stringent than in the previous version of the guidelines, which defined proximity as "near and, when possible, on the same screen." The guidelines encourage advertisers to:
  • Use ads that do not require consumers to scroll down to find a disclosure.
  • Use text or visual cues when scrolling is necessary so that consumers know to scroll.
  • Display disclosures before consumers add an item to their "shopping cart."
  • Take account of the various devices and platforms on which consumers will view an ad and its corresponding disclosure.
  • Stay informed on empirical research about where consumers do and do not look on a screen.
  • Repeat disclosures as necessary on lengthy websites and in connection with repeated claims.
  • Prominently display disclosures so that they are noticeable to consumers, evaluating the size, color and graphic treatment of the disclosure in relation to other parts of the web page.
  • Ensure that moving graphics or other visual elements of an ad do not distract consumers' attention from a required disclosure.

Hyperlinks

The revised guidelines reiterate the original guide's advice to avoid using hyperlinks for disclosures that involve product prices or certain health and safety issues. In addition, the new guidelines ask advertisers to:
  • Make hyperlinks obvious.
  • Label hyperlinks as specifically as possible.
  • Place the link as close as possible to the relevant information.
  • Consider how hyperlinks will function on various programs and devices.

Space Constraints

The revised guidelines point out that ads on space-constrained platforms, like smartphone screens and some social media sites, must still provide disclosures necessary to prevent the ads from being deceptive. When placing ads on space-constrained platforms, the guidelines encourage advertisers to consider:
  • Whether any required disclosure can be incorporated into the ad.
  • If not possible to incorporate the disclosure into the ad, making the disclosure clearly and conspicuously on the page to which the ad links.
For more information on online advertising and marketing, see