Increasingly, companies are turning to the internet and social media platforms to advertise their products, often by using native advertising or by providing incentives such as payments or free products to social media “influencers” (Instagrammers, Pinners, Bloggers and Vloggers, to name a few) in exchange for an endorsement.
As we have previously discussed, the FTC has issued Endorsement Guides that provide guidance on appropriate advertising on social media. The FTC has stated that advertising on social media platforms is subject to the same consumer protection laws that prohibit deceptive advertising and that advertising claims must be accompanied by “clear and conspicuous” disclosures. For example, the FTC has stated that endorsements from social media influencers constitute advertisements that require a disclosure of the connection between the endorser and the advertiser company. If a necessary disclosure is not made or is insufficiently clear and conspicuous, companies may face enforcement action from the FTC.
But what does “clear and conspicuous” actually mean in the context of internet advertisements and how can companies write their disclosures to meet the standard?
According to the FTC’s guidelines, whether a disclosure is sufficiently clear and conspicuous is determined by how consumers actually perceive and understand the disclosure within the context of the advertisement. While there is no bright-line rule for what constitutes a clear and conspicuous disclosure, there are several factors that the FTC has indicated are relevant to the inquiry:
- Placement and Proximity – disclosures should be placed close to the claim that they qualify, because physical proximity increases the likelihood that consumers will see the disclosure and properly associate it with the relevant claim. In addition, disclosures that are an integral part of a claim or are inseparable from it should not be placed on a separate webpage through a hyperlink.
- Prominence – Disclosures should be prominent, and it is the advertiser’s responsibility to draw attention to the disclosure. An advertiser can ensure that a disclosure is prominent by making sure that it is large enough and that it is in a color that contrasts with the background. Advertisers may also pair the disclosure with a graphic in order to make it more prominent.
- Distractions – Other elements of the advertisement should not distract consumers from the disclosure. Distracting factors can include graphics, sound, text, and links to other webpages.
- Repetition – A disclosure may need to be repeated in order to ensure that consumers see it, especially on webpages that can be accessed through a variety of different entry points (for example, a blog post that can be accessed directly through a Google search result or from the archives of the home page of the blog).
- Sufficient Opportunity to View or Hear – For internet advertisement involving a multimedia (audio and/or video) component, advertisers should ensure that disclaimers are broadcast at a sufficient volume and for a sufficient duration to be heard and seen. In addition, disclosures that are related to a written claim in a multimedia advertisement should also be written (not merely over audio).
- Language – Disclosures should be simple and straightforward. Advertisers should avoid technical or complicated language and should not incorporate extraneous information into the disclosure.
If an advertisement may be deceptive or unfair (or otherwise violate FTC rules) without a disclosure, then the disclosure is required. If a required disclosure cannot be made clearly and conspicuously – for example, because of space or format constraints (such as on Twitter) – then the advertisement must be modified to allow for the disclosure or should not be disseminated.
For additional information regarding the FTC’s rules regarding online advertisement and for additional examples, please read the FTC’s .com Disclosures Guide.