GNYADA 2019 Membership Directory & Services Guide

Any elements of the ad that detract from the effective communication of a disclosure should be removed or altered. Pop-up disclosures typically do not comply becausemany consumers block pop ups. A disclosure should be made in the same manner as the claim it qualifies and may need to be included each time the claim is presented. The content of the disclosures should be clear, simple, and straightforward. The test for whether a disclosure is effective is the extent to which consumers can actually read, perceive, and understand it. Rapidly scrolling pages of text are likely to fail the test for acceptability. For example, the FTC issued a complaint against an online lender this year in 105 connection with its lack of prominent fee disclosures regarding fees, because the company used methods such as pop ups, scrolling and fine-print to qualify the nature of the fees. The FTC’s complaint asserted that the fee disclosures were not clear and conspicuous and that this constituted a deceptive act or practice. In addition to the challenges posed by making disclosures on electronic devices, the FTC has identified two other major issues with online and social media advertising: • Native Advertising (“sponsored content”). Promotional messages that blur the lines between advertising and content are common on the Internet, but may be deceptive. The FTC has issued an enforcement policy statement on “deceptively formatted advertisements,” defined as promotional messages that are integrated into and indistinguishable from non-promotional content, such as news, featured articles, or product reviews. The policy statement states that advertising and promotional messages that are not readily identifiable as such are deceptive, because they are likely to mislead consumers into believing the messages are independent and impartial. In these situations, the advertiser must clearly and conspicuously disclose that the embedded message is an advertisement, for example by putting the phrase“Paid Advertisement”at the top of the message. • Deceptive Endorsements. Promotional communications that include purported endorsements or testimonials from experts or consumers who have some connection with the advertiser are deceptive absent a clear and conspicuous disclosure of the nature of the connection. For example, if the endorser has received compensation or free products from the advertiser, those facts must be disclosed. The FTC’s Guidelines on Endorsements and Testimonials are described in more detail below. • Online Influencers. The FTC brought its first enforcement action against individual online influencers for failure to disclose material connections with the companies that they promoted. This appears to be an area of emerging interest for the FTC. Social Media Advertising Social media sites offer dealers a new way to connect with consumers through consumers’ principal means of staying in touch with friends, colleagues, and companies with whom they share an interest or have a relationship. But, increasingly, advertisers are using social media to disseminate commercial messages, and government regulators are actively monitoring social media to look for deceptive practices. The suggestions for advertising practices described above, including those described as part of the FTC’s “Dot Com Disclosures” guide, should be reviewed to help advertisers make effective online disclosures. Advertisers on social media must make sure that (1) their claims are truthful and substantiated, (2) all required disclosures are clear and conspicuous, and (3) advertising content is clearly distinguished from non-commercial content. Several of the FTC’s deceptive advertising cases have addressed social media advertisements.

2019 membership directory & services guide / hot topics

PG 175