May 27th, 2011

FTC To Update Online Advertising Guides

Online Media Daily

The Federal Trade Commission will revamp its 11-year-old online advertising guides to address social media, mobile devices and other newer platforms, the commission announced on Thursday.

“The world has changed dramatically since the original guidance was published in 2000, and the FTC is seeking public comment about how it should be modified to reflect these changes,” the agency said in a statement published on its Web site. “Mobile marketing has become a reality, the ‘App’ economy has emerged, the use of ‘pop-up blockers’ has become widespread, and online social networking has emerged and grown popular.”

The previous guides made clear that rules requiring disclosure of all material information apply to online ads, as well as ads in traditional media. But the precise recommendations and examples dealt with banner ads and Web sites. For instance, the old guides said that marketers needed to make disclosures in fonts that were easily read, and that if companies placed disclosures at the bottom of a page the design should encourage consumers to scroll down.

Those specific recommendations, while considered helpful at the time, don’t necessarily translate to ad formats on social media sites or mobile devices, says Jeffrey Greenbaum, an advertising lawyer with Frankfurt Kurnit Klein & Selz.

“It’s not just about Web sites and banner ads any more. It’s about tweets, it’s about Facebook pages, it’s about inviting consumers to check in to your location,” he says.

“When someone’s advertising on Twitter, the old rules just aren’t going to work.” Unlike Web sites that can be filled with text, Twitter imposes limits of 140 characters.

At the same time, even though marketers today might not find specific examples of their ads in the old guides, the ideas driving those recommendations remain relevant, says Rebecca Tushnet, a law professor and false advertising expert at Georgetown University. “In general, the principles were pretty basic ones. If there’s important information, marketers need to make sure it’s clear to the consumer and not something that takes a strain to find.”

The FTC recently addressed Twitter in a related context—paid endorsements. The commission said that paid endorsers should disclose that they are receiving money in exchange for touting a product. Paid endorsers on Twitter could add a hashtag like “#ad” to their tweets, the FTC said.

For the online ad guide revamp, the FTC is soliciting comment on a host of different questions. Among others, the FTC is asking for input on what issues are raised by new online technologies, what guidance in the original is outdated, and what portions of the original document should be expanded or limited.

The comment period closes on July 11.

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