2013 FTC Dot Com Disclosure Updates and What They Mean For Online Marketers

On March 12, 2013, the United States Federal Trade Commission (FTC) released the long-awaited Dot Com Disclosures. The Dot Com Disclosures guide provides guidance for online and mobile advertisers. Last released in 2000, the internet back then looked very different than it does today. Even now, after over a year of working on this update, some of the information seems dated because technology is changing so quickly.

As soon as the guide was released I started getting emails and contacts asking questions and seeking clarification. The amount of inaccurate information I’ve seen in the few days after their release tells me that there is a need for helpful and accurate information for business, social media professionals and bloggers when it comes to the FTC’s 2013 Dot Com Disclosures.

1. These disclosures are NOT new laws. The 2013 Dot Com Disclosures, like its predecessor, is a guidance document. The FTC staff has made these documents public to assist businesses and professionals working in the online and mobile advertising space in creating their advertising programs so they comply with the FTC rules with regard to advertising and selling online and via mobile platforms. The guidelines only address disclosures required that relate to laws the FTC enforces.

2. The FTC Act continues to prohibit “unfair or deceptive acts or practices” with regard marketing, advertising, promotional and sales practices, in general. The FTC Act is platform neutral, with the goal of consumer protection being paramount. As new technologies and methods of engaging with consumers have come about, the requirement for appropriate disclosures has continued. This document seeks to clarify what is meant by “clear and conspicuous” disclosure to consumers.

3. The FTC’s basic principles of advertising law have not changed. Advertising must still be fair, truthful and not misleading, and have evidence to support all claims. The FTC is tasked with protecting consumers, and, as such, their evaluation of advertising uses the reasonable consumer as its standard.

4. These disclosures, both the content and their placement, aren’t measured by what the company or online marketer/professional thinks makes sense. If a disclosure is necessary or required so that an advertisement or marketing message does not violate an FTC rule or other law, then the disclosure should be clear and conspicuous. The guide provides a very good discussion of this topic. Mentioned are factors such as size of text, color, distracting factors, use of graphics, repetition, location, proximity to message, as well as the primary message of the advertisement.

5. Hyperlinks may be used for disclosures, but the FTC will look at a number of factors to determine if they meet the clear and conspicuous test. The Dot Com Disclosure guide provides a comprehensive discussion on this topic on pages 10 – 13. The general conclusion is that if you are going to use a hyperlinked disclosure you should read this section to fully understand how to do it within the parameters of compliance.

6. Understand the technical limitations of the platform. The FTC is very clear that pop-up disclosures are not to be used. Due to pop-up blockers, a user or consumer may not see the required disclosure creating a potential liability for the marketer. In addition, be aware of the issues related to the technology that may prevent the disclosure from being seen. Not all apps, browsers or mobile platforms function in the same way. What may work on one device may not work on all. In addition, common software may prevent hover disclosures or change link functionality. If these are known (or should be known) limitations, be prepared to create alternative means of disclosure.

7. For the first time, the FTC addresses disclosure on space-constrained platforms. For most, this means Twitter. The FTC states the disclosure should be at the beginning, using “AD” or “Sponsored” so the consumer is adequately informed. The FTC notes that using an abbreviation of the word “sponsored” is likely inadequate because the consumer will not know what the abbreviation means. While most advertisements or sales pitches are teasers and will lead the consumer to a site where it is much easier to provide full and appropriate disclosure, the space-constrained message may still need a disclosure. Furthermore, the FTC recognizes that space-constrained messages may be replicated (such as a retweet). With such replication, the advertiser needs to ensure there is sufficient space so the disclosure is maintained.

 

8. Since the FTC is primarily tasked with protecting consumers, it makes sense that the Dot Com Disclosures address the language used for the disclosure. Consumers have different levels of understanding. Online professionals may be very proficient at the utilized technology, but the consumer may not. How you use the technology may differ from how the consumer uses it, making it incumbent on the marketer and other online professions creating the message to craft a disclosure appropriate for the average consumer.

9. The Dot Com Disclosures do not change any of the requirements with regard to testimonials and endorsements used in advertising. When companies use third parties to share their message, through testimonials or endorsements, the FTC’s Endorsement Guides offer helpful information. The Dot Com Disclosures not only addresses additional situations with regard to marketing, sales and advertising in the mobile and online space, but it acts to clarify they types of disclosures that are required when the internet or mobile platforms are used. The disclosure requirement for bloggers, spokespeople, brand ambassadors, and other third-parties (like celebrities) remain the same.

While this update to the Dot Com Disclosures now incorporates technology that did not exit when the prior version was created, we don’t see many radical changes. These disclosures relate to online and mobile-technology communication with consumers that could lead to a buying decision. And while much of the focus is on the consumer protection aspect of these new Dot Com Disclosures, what is equally important is that compliance is also a tool which allows marketers and sellers to compete in a marketplace free of deception or unfair trade practices.

Who should use the Dot Com Disclosures? This guide should be used by brands, entrepreneurs, small businesses, PR companies, marketing strategists, online professionals, social media consultants and strategists as well as bloggers and others who use social media in conjunction with promoting a product or service to the consuming public. Non-compliance with this new update won’t bring a fine or a reprimand from the FTC. However, since these disclosures are a guide as to how the FTC will determine and evaluate unfair and deceptive trade practices which violate underlying laws it would not be wise to disregard them. The FTC is attempting to offer insight and transparency into what they look at in determining what consumer protection matters they will pursue. While it may not be exacting or crystal clear, it is an important tool to consider when making consumer focused marketing, advertising and sales decisions.

What are your thoughts about the 2013 FTC Dot Com Disclosures? Are you confused about what you have to do? Has the FTC gone too far? Are you mad because you disclose and others don’t?

For other articles about the legal implications of being online, check out my legal blog.

Disclosure: While I am a lawyer, I am not offering legal advice. Posts on legal matters are intended to provide legal information only and do not create an attorney/client relationship. 

Images taken from FTC Dot Com Disclosure Guide

Sara

Author: Sara

Sara is a life-long dreamer, creating a list of things she wants to do "someday". Realizing there is no "someday" on the calendar she's taking the steps to make her somedays a reality. Between saving for retirement and college and paying for all the usual things, many women find that they're often putting their hopes and dreams on hold. Saving For Someday is Sara's way of encouraging women everywhere to find ways to save on the ordinary so they can do the extraordinary. Sara is also a licensed attorney and writes about legal issues affecting bloggers, content creators and online professionals. This blog is for informational purposes only. You can also find me on Google+

7 thoughts on “2013 FTC Dot Com Disclosure Updates and What They Mean For Online Marketers”

  1. The one that got me was the placement of the disclosure statement. What is your thoughts on this? In the example the FTC gave, they discouraged placing it at the end of the post if you use hyperlinks that could distract the consumer. Thanks for this great article. 🙂

    1. Jennifer, the need for disclosure at the beginning/top of a post is still consisten with the Endorsement and Testimonial guide issued in 2010 that most bloggers already use. True, many do not put the disclosure at the beginning. However, the FTC does not require any specific legal language so by simply stating that you received an item free to try or “Brand X paid for me/my family to …” upfront is sufficient disclosure. The important thing to remember is that the potential consumer should know from the beginning that the post they are reading may not be completely objective. It’s not that you’re not being honest or truthful in your post, but rather by telling your reader what prompted you to write the reader can make their own decision.

      Many bloggers do include hyperlinks (which should be “no follow” for SEO purposes) on paid/sponsored/compensated posts. Even if they are not affiliate links, it’s important for readers to know beforehand you’re providing that link because there is some relationship between you and the site you’re linking to.

      Hope this helps. If you have other questions, please let me know.

      ~ Sara

  2. So by this example, a tweet needs to start with #ad #sponsored and we shouldn’t use the more common version of #spon any longer? Just want to understand what I’m reading.

    1. Jennifer, the FTC has stated #spon may not sufficiently make consumers aware the message was an advertisement or compensated (not just with money) message.

      Interestingly, if a consumer did go to next step to try and find out what exactly #spon meant they would come upon a website that claims to register hashtags and would be shown that it relates to one specific company.

      Since people use #spon for so many different companies that would definitely be misleading or deceptive, which is likely one of the considerations taken when the FTC made the determination to explicitly state #spon could create confusion or be deceptive to consumers.

      The further reasoning for adding the disclosure to the front of the message is to reduce the chance of it being removed if the message is further shared.

      Thank you for reading and asking for further clarification. There was a lot of ground covered in the update.

      ~ Sara

      Disclosure: for informational purposes only

  3. As blogging continues to demand a more centralized place in marketing and social media, these disclosures and other governmental interferences are more important to understand. Thank you for taking the time to make it clear and plain. There are full committees studying how the government can get a lasso on these blogs and the revenue they may or may not generate.

  4. I don’t see any changes here, except clarifying the need for readable disclosures on mobile devices, and making the AD: clear on the tweet vs. #spon or other things people might not see.

    I am hearing chatter that every time I link to a blog post where I received a free product, I need to put AD: first on FB/Twitter. I’d say yes if I said something like “wow I’m using this new blue widget and it is totally amazing!!” But if I am just putting on Facebook: I posted a review of the blue widget the widget express sent me. Link to post here: http://www.widgetreviews.xyz

    Then on my review I put the disclosure at the very top.

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