Caveat Vendor

FTC Revises Its Guide To Dot Com Disclosures

March 14, 2013

M. Lily Woodland

On Tuesday, the Federal Trade Commission released revised guidance concerning “.com Disclosures” – principles that the FTC wants to see embodied in disclosures in digital advertising. These revisions come approximately thirteen years after FTC released its first guidance related to online disclosures, and the updated guidance covers issues many advertisers have confronted in recent years, including how to make appropriate disclosures when operating on social media platforms or when digital content appears on smartphones or tablets with small display screens.

Some things never change. As is true of disclosures in all other media, the FTC guidance reminds advertisers that their digital disclosures should be “clear and conspicuous.” That standard involves evaluating a number of factors, including:

• the placement of the disclosure and its proximity to the claim it qualifies;

• the prominence of the disclosure;

• whether the disclosure is unavoidable;

• whether there are elements that distract attention from the disclosure;

• whether the disclosure should be repeated;

• whether audio messages are presented in an adequate volume and cadence;

• whether visual disclosures appear for sufficient duration; and

• whether the disclosure is understandable to the intended audience.

As to how to apply those principles to new media, a couple of points to consider:

Scrolling. While scrolling may be required, it can be problematic. Consumers may not scroll down far enough or in the right direction. Advertisers should use textual and visual clues to indicate that more information is available and, if scrolling is necessary, the disclosure should be “unavoidable.” Consumers should not be able to proceed with a transaction without scrolling through the disclosure. Advertisers should also consider optimizing websites for mobile devices, which typically eliminates the need to zoom in or scroll left or right.

Hyperlinks. While disclosures that are an integral part of the claim or are inseparable from it should not be communicated through a hyperlink, in instances where the disclosure is too lengthy and not integral to the triggering claim, a hyperlink may be appropriate. Such hyperlink disclosures should be clearly labeled to indicate what information the disclosure conveys and should be prominently placed in close proximity to the claim itself. The style and formatting of the hyperlinks should remain consistent across the site. Advertisers are not required but should consider monitoring click-through rates to see if the hyperlink is effective.

Get High Tech. Monitor new ways to convey important information or to display disclosures, do not ignore technical limitations of certain browsers and devices, do not use blockable pop-up disclosures and keep in mind that most consumers do not read unblockable pop-ups.

Bricks & Mortar. If a product is advertised online, but available from a bricks and mortar store, all disclosures must be made in the online ad, before consumers go to another outlet. In-store disclosures are not enough.

Space Constraints. Tweets and banner ads present additional challenges. They’re typically only teasers, but that doesn’t mean they are exempt from the disclosure requirements. If possible, incorporate the disclosure into the ad itself. Otherwise, the disclosure can be clearly and conspicuously disclosed on the website to which the ad links, but advertisers should evaluate how important the information is to avoid deception and how effective a click-through disclosure will be. Disclosures should be in each and every ad. Short form disclosures may be sufficient, if they’re easily understood. For instance, “Ad:” or “Sponsor:” at the beginning of the tweet may be sufficient to indicate that message is an ad or sponsored endorsement. If at the end, leave space to make sure that the disclosure travels with the message if it shared or re-tweeted.

Account for Viewing on Different Devices. Unless you have a mobile-optimized website, design your website so that disclosures are clear and conspicuous regardless of whether it is viewed on a desktop, smartphone or tablet. Test your site on different browsers and devices.

Caveat Vendor is Paul Hastings' Consumer Issues blog. We welcome your feedback. Please contact our blog editor with any thoughts or suggestions.

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