ImageThis past March the Federal Trade Commission released a new version of the “.com Disclosures: How to Make Effective Disclosures in the Digital Age”[i] regarding advertising and internet-based transactions. The document details how to effectively disclose information and prevent deception in digital advertising. Not only are these practices used to protect consumers from shady online transactions, but they also allow companies the opportunity to compete on a level playing field.

Over the next six weeks I will be writing a bi-weekly three-part series on how companies can not only comply with these new disclosures, but also how they can increase their ability to engage and transact with their consumers.

The History: The 2000 Dot Com Disclosures

First made public in 2000, the “Dot Com Disclosures: Information about Online Advertising”[ii] was the culmination of a public comment period and public workshop led by the FTC to discuss how existing consumer protection laws would apply to the digital medium. The document focused mainly on the clarity of internet ads and how Commission regulations and guides using certain words (i.e. “written”, “writing”, “printed”, and “direct mail”) applied to new technologies. The paper also clarified how a company could utilize email to comply with disclosure requirements and provide documents or notices to consumers.

The publication did not put forth new rulings, but rather revisited the advertising model used in other mediums for the new digital space.

Some of the issues discussed in the 2000 disclosures include:

  • Placement of the disclosure and its proximity to the related claim
  • The prominence of the disclosure and how it related to other elements in the ad so as not to distract consumers’ attention from the disclosure
  • Whether a disclosure needed to be repeated throughout a lengthy ad
  • The proper volume & cadence on audio ads and the duration of a disclosure in visual ads
  • And whether the disclosure is understandable by the targeted audience.

Ultimately the FTC decided that the same standards that steer clarity in print advertising would be used to define clear, consumer-friendly internet advertising.

The Basics of Dot Com Disclosures

For disclosure to be presented “clearly and conspicuously” there are three basic principles of advertising that companies in any industry and utilizing any medium must follow.

First, advertisements are required to be “truthful and not misleading”. An omission of information which could mislead a reasonable customer is also deemed to be deceptive.

Second, any claims that are made in an advertisement must be substantiated. For example, if a company is purporting that its supplement will make you lose weight fast it must have some further clarification such as the rate of weight loss achieved by the average person while using their product.

Lastly, advertisements must not be unfair, which is defined by the FTC as “likely to cause substantial consumer injury that consumers could not reasonably avoid and that is not outweighed by the benefit to the consumers or competition.”

“Clear and Conspicuous” in 2013

Since 2000 much has changed. We’ve seen the birth of a number of social networks, including Facebook and Twitter, and the advancement of many tech devices. According to a May 2013 study by the Pew[iii] Research Center 91% of US adults own a cell phone, 56% of those being smartphone users.

The March 2013 the disclosures were revised to address the growing influence of social media platforms and the prominence of various devices, such as smartphones and tablets. The updated document readdresses much of what was covered in the first edition and highlights new issues surrounding space-constrained screens and advertising on social media sites such as Twitter. While the Dot Com Disclosures are more so guidelines than law, they should be adhered to by any company looking to advertise in a digital format. The FTC still retains the ability to use the standards stated in the document as grounds for legal action under the FTC Act.

The new issues covered by the Dot Com Disclosures include:

  • Mobile-optimized websites
  • Social media posts and timelines
  • Hyperlinks
  • Icons, abbreviations, & symbols
  • Limited space ads

Go Out and Disclose!

Ultimately, the Dot Com Disclosures contain standards that should be applied to all forms of digital advertising if companies care about maintaining a high standard of customer satisfaction… and don’t wish to face legal action from the FTC.

During the next few weeks I will discuss the specific issues brought up in the 2013 Dot Com Disclosures, as well as how by investing time & resources creating a mobile marketing plan companies’ can further comply with these updated disclosures, particularly in the areas of social media and mobile transactions.