FTC Updates Guidance for Mobile and Internet Advertising Disclosures

Fraud FTC Disclosures

Yesterday, the FTC released guidance for mobile and other online advertisers. The new guidance, “.com Disclosures: How to Make Effective Disclosures in Digital Advertising,” adapts and expands prior FTC guidance to account for a decade’s worth of additional experience with online marketing practices, consumers’ increasing use of smartphones, and merchants’ increasing use of social media marketing.

The new guidance highlights several key considerations for businesses as they develop advertisements for online and mobile media:

• The same consumer protection laws – e.g. UDAP – that apply to commercial activities in other media apply online and in the mobile marketplace.
• Limitations and qualifying information should be incorporated into any underlying claim, rather than provided as a separate disclosure qualifying the claim.
• Marketing materials that may be viewed on a variety of platforms, including handheld devices, should be designed so that required disclosures are effectively delivered on all of the platforms.
• Required disclosures must be clear and conspicuous, as determined by numerous factors.
• If a disclosure is necessary to prevent an advertisement from being deceptive, unfair, or otherwise violative of a FTC rule, and it is not possible to make the disclosure clearly and conspicuously, then that ad should not be disseminated.

To meet the clear and conspicuous standard, the FTC reminds advertisers that, generally, a disclosure should be placed as close as possible to the trigger claim, and that they should take account of the devices and platforms consumers may use to view the advertisement and disclosure. The FTC offers other specific guidance, with corresponding examples, for complying with the clear and conspicuous standard in online and mobile advertisements:

• When a space-constrained ad requires a disclosure, incorporate the disclosure into the ad whenever possible. When it is not possible it may be acceptable to make the disclosure clearly and conspicuously on the page to which the ad links.
• Hyperlinks used to lead to a disclosure should (i) be obvious, (ii) be labeled appropriately to convey the importance and relevance of the information it leads to, and consistently formatted, (iii) be placed as close as possible to the relevant information it qualifies, (iv) take consumers directly to the disclosure on the click-through page, and (v) be monitored for effectiveness and changed, if necessary.
• Avoid requiring consumers to “scroll” in order to find a disclosure, or, when necessary, use text or visual cues to encourage consumers to scroll to view the disclosure.
• Determine screen placement based on empirical research about where consumers do and do not look.
• Recognize and respond to any technological limitations or unique characteristics of a communication method.
• Display disclosures before consumers make a decision to buy, and consider repeating disclosures before a purchase is finalized.
• Repeat disclosures, as needed, on lengthy websites and in connection with repeated claims.
• For products intended or able to be purchased from “brick and mortar” stores or from online retailers other than the advertiser itself, the disclosure should be presented in the ad itself.
• Prominently display disclosures, based on an evaluation of the size, color, and graphic treatment of the disclosure in relation to other parts of the webpage. Do not relegate disclosures to “terms of use” and similar contractual agreements.
• Review the entire ad to assess whether the disclosure is effective in light of other elements 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.

The updated guidance, and especially the FTC’s emphasis on the ability of marketing materials to effectively deliver disclosures across multiple platforms, should lead businesses with online marketing programs to carefully review and re-assess their marketing materials and methods of presentation.