FTC Workshop Outcome May Impact Internet and Mobile Marketing

Mobile Marketing
The FTC loves to make up marketing rules — and now they’re thinking up a few more for mobile marketing.

At the end of May, the Federal Trade Commission held a workshop on the effectiveness of disclosures on mobile devices.” The goal was to better understand how marketers can provide clear use policies and advertisement labeling on mobile devices and social media platforms.

The FTC’s Mobile Marketing Concerns: Disclosure Policies, Small Screens and Social Media

Charged with ensuring an equitable marketplace, the Federal Trade Commission is the government body responsible for establishing and enforcing online marketing guidelines. Now that smartphones and social media are here to stay, the panel must come up with recommendations for the best way to incorporate advertising and promotional disclosures on cloud-based, networking platforms and mobile devices.

Enter Mobile Marketing: Small Screen Size = FTC Headache

Mobile phones and social media present a unique problem for the FTC. As stated, the commission’s primary concern is to make sure users are presented with the necessary information to make informed decisions about whether or not to purchase products and services, or participate in sweepstakes or promotions.

The “quick-click” nature of the Internet (i.e., Facebook likes) and the prevalence of small-screen devices, however, make it difficult to get those disclaimers and disclosures in front of peoples’ eyes. After all, who can read read a 3pt font?

But more and more, companies are using mobile marketing to promote their brands. Often, these promotions are coupled with give-a-ways. Just recently, Target stores gave away “beauty boxes” in exchange for “likes” on Facebook; Amazon.com once offered a $3 instant video credit to anyone who agreed to tweet a pre-written 140-character missive; in the Washington, DC-area, a Mattress Discounters offered folks who liked their Facebook page an opportunity to enter a drawing for a $100 gift certificate.

The Problem Mobile Marketing Promotions Present For The FTC

As you might imagine, online and mobile marketing incentives are a gray area for the FTC. On one hand, they must develop rules that guard against misleading and fraudulent marketing, while at the same time do their best to establish rules that include consumer notifications. But the FTC also must be careful that policies don’t thwart innovation and business development.

For example, at the workshop last month, a sticking point was whether or not the amount of Facebook “likes” a product or service has actually influences consumer decisions – and if they did, should it be considered fraudulent online advertising if it’s not clear that many of those likes were given in exchange for something else?

What the FTC Currently Requires Of Online Marketers

Today, all entities marketing their wares online or through mobile devices must abide by all the regulations laid out in the Dot Dom Disclosures. First enacted in 2000 (and updated several times since), the 83-page Dot Com Disclosures should be the bible of every online marketer.  It clarifies “unfair and deceptive” online and mobile marketing techniques.

Other regulations all companies and online advertisers must follow:

(1)    Paid Twitter advertisements should use the #paid hash tag;

(2)    Negative-option marketing must be done in a legal manner (and that standard is growing stricter every day);

(3)    If your app, platform, or website is frequented by underage users, stricter COPPA standards must be met.

If you’re launching a new platform or marketing campaign, it’s always best to consult with an online advertising lawyer before you unleash it to the world.

Users, Advertising & Making The Most Of The FTC’s Time

Harinder Mundi, a consumer from Woodbridge, NJ, participated in both the Target and Amazon offers mentioned above. When asked about her opinions on social media marketing, she admitted she finds it “irritating” when her Facebook news feed is cluttered with endorsements, even when they’re from friends — especially since, according to Mundi, “it is obvious that they are being paid.”

Mundi’s admission raises a provocative social marketing question: is online “socialtising” becoming as ubiquitous as banner advertising, and as such immediately recognizable without a disclosure? Couple that with our tendency not to read terms of service agreementsHUMANCENTiPad, be damned!

Of course the FTC will never declare terms of service agreement, advertising disclosures, or privacy policies “null and void” – but it may be time for the global commerce community to start developing universal icons that represent certain legal standards (like the stick figures that guide us to the proper bathroom, water closet or cuarto de baño no matter where in the world we may be).

Hey, if the FTC decides to tighten mobile disclosures, it could be a modern-day Renaissance for semioticians everywhere!

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