I talk here on Madison Ave Insights all of the time about the importance of mobile and social media for advertisers.  Technology is always changing, and with new technology comes a set of new challenges for industry groups, brands, and regulators.  In light of the rise of smartphones, tablets, and social media, the Federal Trade Commission (FTC) updated its online advertising disclosure guidelines.  Known as the Dot Com Disclosures, the guidance updates the original guidelines which were introduced in 2000, since, as we all know, a lot has changed since the turn of the Millennium.  While the general principles of traditional advertising law apply equally to online and mobile media, the updated guidelines provide specific guidance for making “clear and conspicuous disclosures” on mobile and social media platforms.

The FTC’s updated Dot Com Disclosures signal to marketers that traditional consumer protection laws apply to mobile marketing, regardless of space limitations.  While there is no set formula for a clear and conspicuous disclosure, when evaluating whether a disclosure meets this requirement, an advertiser should consider its placement in the ad and its proximity to the relevant claim.  Due to the smaller screen size and different format of mobile platforms, the FTC changed its definition of “proximity” from “near and, when possible, in the same screen” (from the 2000 version) to now be “as close as possible” to the relevant claim.

Mobile marketers may need to become creative if they want to continue to use hyperlinks, as hyperlinks need to be obvious and labeled to explain the nature and importance of the information to which they link – terms like “disclaimer,” “more information,” “details,” or “terms and conditions” may no longer be adequate.  The FTC also makes clear that the disclosures that are necessary to comply with the FTC Endorsement Guides need to be disclosed in space-constrained ads such as Tweets and cannot be disclaimed via a click-through or hyperlinked disclosure, but need to say something like “#Ad” in the Tweet.

The Way I See It

  • Mobile marketers should look at the FTC’s new guidance in a positive light.  For too long, we have been applying the FTC’s decade-old Dot Com Disclosures guidance to mobile media, which raised unique challenges given mobile’s space limitations.  With the flexible principles and specific examples presented in the updated guidance, mobile marketers now have the necessary tools to provide disclosures that meet FTC requirements.
  • I see the FTC making clear that if a platform does not allow marketers to make clear disclosures, that platform should not be used for advertising and this should be taken seriously in order to meet FTC standards and avoid any enforcement actions or false advertising litigation down the road.