New FTC Disclosure Guidelines For Social and Digital Advertisers

Last month, the Federal Trade Commission (FTC) finally gave the digital advertising world what it’s been waiting for and badly needed for years: “Dot-com Disclosures: How to Make Effective Disclosures in Digital Advertising,” to replace the sorely outdated guidelines from 2000. The revised guidelines make clear that FTC truth-in-advertising principles apply to any medium, platform or device – no matter how new or small – and attempt to offer practical advice for complying with FTC disclosure requirements in online, social media and mobile advertising. Two bedrock FTC advertising axioms underlay the new guidelines: 1) disclosure is required where necessary to prevent an ad from being deceptive or unfair; and 2) where disclosure is necessary, it must be “clear and conspicuous.” The updated guidance makes abundantly “clear and conspicuous” that these requirements apply without exception to any device. If a disclosure is required to make an ad on the smallest tablet or smartphone non-misleading, it must be made and has to be easy to see and understand. If space constraints make that impossible and the claim can’t be modified to moot the need for disclosure, then the ad shouldn’t run on the device. What will make a disclosure “clear and conspicuous” in a digital ad? The FTC’s criteria are:

• Placement and prominence of the disclosure and how close it is to the related claim
• Whether the disclosure is unavoidable
• Whether other parts of the ad distract from the disclosure
• Whether the disclosure needs to be repeated to ensure it’s seen
• Whether the language is understandable

The disclosure must be as close as possible to the relevant claim. Key information (i.e., price, health, safety) must always appear with the claim and hyperlinks are disfavored. If hyperlinks are necessary for space reasons, they can be used so long as they satisfy the tenets of “clear and conspicuous,” namely:

• The link is obvious and placed as close as possible to the relevant information
• It’s labeled to convey the nature and significance of the linked information (“see details” is not okay)
• It takes consumers directly to the disclosure on the click-through page
• The disclosure on the click-through page itself is noticeable and understandable

The revamped guide also strongly discourages scrolling to find a disclosure, especially horizontal scrolling on smaller screens which consumers rarely do (any need to scroll horizontally can be solved by having a mobile-optimized site). When scrolling can’t be avoided, effective text or visual cues need to lead consumers to the disclosure. Pop-ups are another FTC disclosure non-favorite since they can be easily blocked and are often ignored. Where space constraints are acute, such as in tweets, the revised guidance encourages repetition of disclosures (such as republishing in “re-tweets”) and allows abbreviated disclosures as long as consumers understand them. For example, “Ad” should be adequate to indicate a tweet is sponsored, but not necessarily “#spon.” Since mobile and social media ads are still so new, the FTC expects advertisers to monitor the effectiveness of disclosure techniques, keeping what works and improving what doesn’t. Over time, FTC “test cases” will further illuminate the meaning of “clear and conspicuous” in digital advertising. In the meantime, it behooves digital advertisers to study the whole 53-page document (including its 22 mock ads), located at www.ftc.gov.