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FTC Tightens Online Disclosure Requirements

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ftc-dotcom-disclosuresThe Federal Trade Commission (FTC) released its new .COM Disclosures standard on March 12, tightening considerably the requirements for disclosure statements for online advertisements, ads and reviews.

In December 2009, they had already made it known that even bloggers were expected to disclose any remuneration (such as free samples or affiliate commissions) that might prompt or influence reviews.

This new standard gets much more granular, and reaches far beyond bloggers' reviews. If you run ads on your site, receive any affiliate commissions or do reviews of products or services (paid or otherwise), you need to familiarize yourself with the new requirements – they're significantly more stringent than before. In fact, I see them as more stringent than the traditional requirements for print advertisements.

Disclosure Visibility

Visibility of disclosures is the area that saw the greatest focus. There are several references to where the disclosure should be, how prominent it should be, when it should be displayed (and how many times, in some instances), and where it isn't adequate to display it.

In 2010, it was widely considered sufficient to place a link at the end of a blog post to a page stating the necessary disclosure position. I did that myself, simply stating that unless I stated otherwise, any tool, service or product review should be assumed to involve no remuneration, unless I specifically said otherwise in the subject post. I don't run ads on my sites, so I avoided that bullet.

That falls short of meeting the new standards, however. Here are a few excerpts from the FTC's new document (bolding of important points mine):

When practical, advertisers should incorporate relevant limitations and qualifying information into the underlying claim, rather than having a separate disclosurequalifying the claim.

To make a disclosure clear and conspicuous, advertisers should:

  • Place the disclosure as close as possible to the triggering claim.
  • Take account of the various devices and platforms consumers may use to view advertising and any corresponding disclosure. If an ad is viewable on a particular device or platform, any necessary disclosures should be sufficient to prevent the ad from being misleading when viewed on that device or platform.
  • When a space-constrained ad requires a disclosure, incorporate the disclosure into the ad whenever possible. However, when it is not possible to make a disclosure in a space-constrained ad, it may, under some circumstances, be acceptable to make the disclosure clearly and conspicuously on the page to which the ad links.
  • When using a hyperlink to lead to a disclosure,
    • make the link obvious;
    • label the hyperlink appropriately to convey the importance, nature, and relevance of the information it leads to;
    • use hyperlink styles consistently, so consumers know when a link is available;
    • place the hyperlink as close as possible to the relevant information it qualifies and make it noticeable;
    • take consumers directly to the disclosure on the click-through page;
    • assess the effectiveness of the hyperlink by monitoring click-through rates and other information about consumer use and make changes accordingly.
  • Preferably, design advertisements so that “scrolling” is not necessary in order to find a disclosure. When scrolling is necessary, use text or visual cues to encourage consumers to scroll to view the disclosure.
  • Keep abreast of empirical research about where consumers do and do not look on a screen.
  • Recognize and respond to any technological limitations or unique characteristics of a communication method when making disclosures.
  • Display disclosures before consumers make a decision to buy — e.g., before they “add to shopping cart.” Also recognize that disclosures may have to be repeated before purchase to ensure that they are adequately presented to consumers.
  • Repeat disclosures, as needed, on lengthy websites and in connection with repeated claims. Disclosures may also have to be repeated if consumers have multiple routes through a website.
  • If a product or service promoted online is intended to be (or can be) purchased from “brick and mortar” stores or from online retailers other than the advertiser itself, then any disclosure necessary to prevent deception or unfair injury should be presented in the ad itself — that is, before consumers head to a store or some other online retailer.
  • Necessary disclosures should not be relegated to “terms of use” and similar contractual agreements.
  • Prominently display disclosures so they are noticeable to consumers, and evaluate the size, color, and graphic treatment of the disclosure in relation to other parts of the webpage.
  • Review the entire ad to assess whether the disclosure is effective in light of other elements — text, graphics, hyperlinks, or sound — that might distract consumers’ attention from the disclosure.
  • Use audio disclosures when making audio claims, and present them in a volume and cadence so that consumers can hear and understand them.
  • Display visual disclosures for a duration sufficient for consumers to notice, read, and understand them.
  • Use plain language and syntax so that consumers understand the disclosures.

To me, it looks like these refinements render most of the disclosures that I've seen inadequate.

If you're selling, promoting or reviewing anything on your site, directly or indirectly, you really need to read through their document thoroughly. The above excerpts are from the three-page overview of their document.

Don't depend on that overview, though... read the entire 53 pages, as there's a lot of detail that should be taken into consideration, that isn't adequately addressed in the overview.

How does it Apply?

There are other ways than just on our websites that the new .COM Disclosure document affects us. Now, if you're posting anything on a social media platform, that specifically requires disclosure, too. Those 140 characters on Twitter just had another nibble taken out of them.

Here's a blogger who was apparently paying attention, because as of March 18, she incorporated the #ad tag into her tweets.

randommommy1-tweet-ad

Some folks focus their social media marketing efforts more on Facebook, although often, not by buying ads or sponsored posts, but by doing their own thing on their wall. While I couldn't find any instances of people incorporating disclosures into promotional posts on Facebook, I think it's a safe assumption that the FTC will be looking for them there as well.

Depending upon the captioning that accompanies the image, they may even clamp down on some people that are using Pinterest to market their products.

You may have noticed, too, the reference to "various devices and platforms". If you have or are planning a responsive website, you need to be certain that your site is rendering on all viewports in a way that will satisfy the "clear and conspicuous" requirement.

From their past history, I would expect the FTC to take a mild approach to enforcement at first, then suddenly decide to single someone out and make an example of them. Since six- and seven-figure fines make better examples, at least one of those victims is likely to be a big brand.

I would suggest, though, that the rest of us should take this disclosure requirement serious - they'll probably want to send a message to the smaller fish in the sea, too.

Nobody likes to hear "We're going to make an example out of you."


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