FTC Guidelines and Internet Marketing 101
Here at Kelly / Warner Law, we field a lot of questions about Federal Trade Commission Guidelines pertaining to blogging and Internet marketing. The two most common queries:
Are bloggers and marketers required to disclose certain types of information on their websites?
If so, how must the disclaimers be presented?
In this article, we’ll discuss the latest FTC guidelines and disclosure requirements.
The FTC Acai Berry Scandal: A Lesson On Weight Loss False Advertising
A couple of years back, the FTC came down hard on Acai Berry advertisers. In online ads, many weight loss marketers used headlines like: “New Diet Pill Helps you Lose 50 pounds in 4 weeks” to describe the supposed miracle product. This alluring diddy also caught the FTC’s eye:
WARNING! AcaiPure Is Fast Weight Loss That Works. It Was Not Created For Those People Who Only Want To Lose A Few Measly Pounds. AcaiPure was created to help you achieve the incredible body you have always wanted …USE WITH CAUTION! Major weight loss in short periods of time may occur.
These headlines and blurbs caught the attention of the FTC because they make bold claims — claims that sound too good to be true. And when asked for evidence to support these claims, the marketers couldn’t hand-over satisfactory studies. (No, not all white papers and studies are created equal.) The commission deemed the headlines “false advertising” and a hulk-sized fine was levied.
False advertising isn’t the only thing at issue here. though. The FTC is also concerned about “re-bills.” In the Acai crackdown, the commission reasoned that not only did the advertisement lead customers to believe they would experience dramatic weight loss, but the advertisement also indicated that there was no financial risk. Yet, Acai Berry clients were billed for the product without their knowledge – sometimes thousands of dollars – for something they were led to believe was “Risk Free.”
The FTC has and will continue to clamp down on false advertising claims as a way to curb unfair and deceptive marketing. And remember, they have to keep busting people in order to keep existing. So, watch your back and make sure you have the proper disclosures. If you do, the FTC can’t come after you.
Blogging FTC Guidelines
The FTC isn’t only concerned with false advertising (blatant or otherwise). They’re also concerned with persons who endorse products and fail to disclose that he or she is a compensated endorser.
Bloggers and affiliate marketers who are receiving payment from websites engaged in false advertising should also beware. According to FTC Guidelines, bloggers must post a disclaimer or make a disclosure regarding a “sponsored communication.” There is no such thing as a one-size-fits-all “sponsored communication” disclaimer, however, the FTC does provide a few guidelines:
- Only “material connections” must be disclosed.
- Connections are material if the reviewer received some consideration for the review (e.g., cash, merchandise, etc.).
- Guidelines impose liability on: (1) advertisers, (2) advertising agencies, and (3) endorsers (including celebrity endorsers).
- The “results may vary” safe harbor is gone – advertisers are responsible for the claims made by endorsers.
Must I Have a disclosure or disclaimer on my Blog?
If you’re a paid blogger, affiliate marketer, or any entity receiving pay for advertising you must use disclaimers on your site.
“What kind of disclaimer is needed on your website or blog?”
The answer isn’t clear cut. Different strokes for different apps. That said, as long as the disclaimer is “clearly and conspicuously” placed according to the FTC Guidelines, then your site should be in the clear. Having a link in small type — which just so happens to be the same color as the background color of your page — won’t do because the disclaimer must be “clearly and conspicuously” placed.
There’ isn’t a list of “FTC approved” methods for disclosing certain information. The guidelines simply say that the disclaimer must be “clear and conspicuous” when disclosing the material relationships between endorsers and sellers – especially when such relationships aren’t otherwise clear to people visiting the website.
For bloggers, it’s important for the disclaimer to follow every blog post. Why? Because if the disclaimer is only in one spot, there is no guarantee that a reader will see it. A good method is having a link in your footer than appears on every page.
The FTC Guidelines govern advertising done on Twitter and other social media platforms, too. So, make sure to disclose material connections with every Tweet.
How you can comply with FTC Guidelines
The revised FTC Guidelines dictate that advertisements for services and products must not be misleading or false. Advertisers must disclose when the advertisement showcases atypical results. Furthermore, marketers using word of mouth or electronic media must disclose any material relationships between themselves and the advertisers they represent so consumers aren’t misled.
When online marketing guidelines are violated, the FTC will consider the “totality of the circumstances.” That means the FTC will take a look at:
- The advertised product,
- The advertisement claims, and
- Whether or not a “reasonable consumer” would be able to determine (from the disclaimer) if there is a material connection between the advertiser and the marketer.
Be careful out there, bloggers and online affiliate marketers. Even though the truth can hurt…the truth doesn’t hurt as bad as the FTC crashing down on you.