FTC Updates Rules on Online Advertising, Disclosures


By University Alliance on April 05, 2013

April 5, 2013

New federal rules require online advertisers to do more than simply add a hard-to-see hyperlink, tuck disclaimers into the bottom of an ad or tack #Spon onto a tweet in order to avoid claims of deceptive practices.

The Federal Trade Commission (FTC) released the tightened regulations in March 2013, updating the rules it issued in 2000. The new guidelines are aimed at bringing digital ads under the same truthfulness and clarity requirements as print and broadcast advertising, and also seek to solidify the commission’s ban on “unfair or deceptive acts or practices.”

According to the FTC, the rules try to account for variations in digital advertising, such as the restricted character count on Twitter and the limited screen space on mobile devices, which might require a consumer to scroll extensively in order to view an entire ad. The regulations also address differences in how ads might appear on a smartphone or other mobile device versus a desktop computer.

“The general principles of advertising law apply online, but new issues arise almost as fast as technology develops — most recently, new issues have arisen concerning space-constrained screens and social media platforms,” the FTC noted in its report, “.com Disclosures: How to Make Effective Disclosures in Digital Advertising.”

Many of the regulations are similar in concept to those relating to traditional advertising, such as: place disclosures near the claim they highlight; display them prominently; don’t hide them in the small print or terms of use; use clear language; and don’t use fuzzy graphics, fonts or colors to camouflage disclosures.

But the details of the updated rules relate directly to the digital arena. For example, the FTC noted that beginning a Twitter message with the phrase “Ad:” could satisfy its disclosure requirement for paid endorsements, while only using four of the 140 available characters in a tweet.

Disclosures can’t be placed in a separate tweet because consumers may not realize the two Twitter messages are connected, the commission said.

In cases where a disclosure includes complex or detailed information, it may be appropriate to provide the disclosure via a hyperlink from the online advertisement, the FTC noted. Such a hyperlink “should be labeled clearly and conspicuously.”

The primary consideration should be clarity for the consumer.

“The ultimate test is not the size of the font or the location of the disclosure, although they are important considerations; the ultimate test is whether the information intended to be disclosed is actually conveyed to consumers,” the FTC report said.

Category: Internet Marketing