Dot Com Ad Disclosures A Tricky Test of Ethics and Effort

Before the Internet (BI), as an account executive for an ad agency, I sat in the sales manager’s office at a major car dealer and took notes for an upcoming print ad. The sales manager identified the model to feature and added, “and make the price . . .”

The price he cited meant the ad would feature a “strippie” – a car with zero upgrades. Back then, few strippies ever actually arrived on a dealer’s lot.

With all the other ad details settled, I was required by my boss and the owner of the dealership to get an inventory stock number for each car being advertised. The Federal Trade Commission (FTC) Truth in Advertising guidelines and the Car Dealers Association required it.

The sales manager called in an associate and asked him for the stock number. After shuffling through a pile of paperwork covering months of past inventory, he cited a number and smiled. Clearly, that particular car was not on the lot.

Today, the Internet has made compliance with FTC rules different and more challenging. After years of being woefully behind the times, in March 2013, the FTC issued the 48-page document, “.com Disclosures, How to Make Effective Disclosures in Digital Advertising.” If you are advertising online, or even just considering it, you should review the 22 examples of what to do, or not do, or find a professional to ensure you’re in compliance.

Until then, try taking this simple, five-question, quiz to get a feel for whether you know the basic requirements and principles. True or False:

  1. Online ads must be smart-phone friendly to ensure that disclosures are clear and conspicuous.
  2. Hyperlinks cannot be used to communicate disclosures that are integral to a claim.
  3. Bloggers writing about products or services must disclose the fact that they received a free sample.
  4. A paid endorser must disclose that fact in each and every Tweet about a product or service.
  5. A business can easily report a competitor, guilty of an infraction, to the FTC.

The answer to all five of these questions is “True.” Here’s why.

One, about smart phones. According to the FTC, a disclosure that is clear and conspicuous on a 22-inch wide monitor might get lost on a 300 pixel-wide smart phone. Every online ad that requires a disclosure must have a smart phone version.

Two, a hyperlink cannot be used to disclose key terms or requirements of an offer because a hyperlink does not meet the FTC standard of a clear and conspicuous disclosure.

Three, a consumer who reads a blog needs to know if the blogger has been paid to write the review, even if the payment is only in the form of a free sample. Common sense and solid research tells us consumers put less weight in reviews written by people who are paid to write them.

Four, this same standard requires a paid endorser of a product or service to disclose that relationship in every Tweet. The disclosure consumes some of the available 140.

The FTC illustrates every disclosure requirement in easy to understand screen-captures.

Lastly, if one business, or one consumer, believes that an online advertiser has not been clear and conspicuous in its ad disclosures, the offender can be reported to the FTC through its web site. Surely the flood of complaints the FTC and each state’s attorney general’s office receive must be overwhelming.

Before the Internet, some advertisers looked at FTC regulations as raising two questions. One was, “How do we comply with the law?” The second question was, “If we violate the law, are we going to get caught?”

When I left that car dealership that day, I was pretty sure the ad we’d be running would promote a car the dealer did not have for sale. Today, a car dealer’s website typically displays the actual Vehicle Identification Number (VIN), one of many aspects of selling and buying cars now that makes the process more transparent and honest.

Even so, the Internet has inspired countless advertisers to cheat in multiple ways. Bloggers get paid under the table, reviewers get paid to write favorable reviews and social media are manipulated in ways that violate FTC rules.

In one famous example, the marketing director for the manufacturer of computer accessories publicly advertised fee-for-service payment for anyone willing to write favorable reviews.

In the United States, that particular marketing director’s antics were reported both by consumers/bloggers and by a journalist who discovered the violations. Evidently the marketing director was fired.

Marketers who cheat today may not get caught by Big Brother – by the FTC in its role as watch dog.     Even so, countless “Little Brothers” – bloggers and ordinary consumers who write reviews on countless websites – are also watching out for cheaters. They help hold advertisers accountable.

If you have an ad agency, the agency may look the other way and let you break the rules. The best approach, however, is to review the FTC’s .com Disclosures yourself and make sure your organization follows the rules to the letter, and spirit, of the law. Big Brother may not be watching, but Little Brothers are out in force.

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About Dave

Dave Tedlock is the head of NetOutcomes, a digital marketing firm. For years he has written a marketing and technology column for various publications, including the Tucson Citizen’s Tucson Business Edge, Idaho Business Review, Inside Tucson Business, and The New Mexico Business Weekly. Tedlock taught writing and business communication for eight years in many universities, including the Harvard Business School and Iowa State University. For 13 years he worked in ad agencies as a copywriter, account manager or creative director. Tedlock has published short stories, scholarly articles and a writing textbook (with Paul Jarvie). He earned a Master’s degree in Fiction Writing from Brown University. He lives in Tucson and Santa Fe.

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