CMP.LY - FTC .Com Disclosures Executive Summary

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On March 12, 2013, the Federal Trade Commission (FTC) released a report to address issues presented for disclosures in social, mobile and other digital channels. The .Com Disclosures report provides updated guidance—the previous report was issued in 2000—and adds further clarification to the FTC’s 2009 Guide to Endorsements and Testimonials.

Like the original, the updated report emphasizes that consumer protection laws apply equally to marketers across all mediums, whether delivered on a desktop computer, a mobile device or more traditional media such as television, radio or print. Technological restrictions on space, the design of certain social media tools or the size of a given advertisement in a small screen or window do not exempt advertisers from making required disclosures and notices on the platforms mentioned above.

The updated report does more than just discuss the evolution of disclosure requirements in response to new technologies; it also provides practical guidance regarding: placement, proximity and prominence of required disclosures; the insufficiency of many hashtags and generic links; the need to take into account technical limitations of both the devices and platforms where consumers may be accessing your content; the use of new technologies to make disclosures; and the use of hyperlinks, including both when they are not – and when they are – a good idea.

Our white paper looks to the .Com Disclosures report and at the application of the revised guidance to your marketing initiatives and the requirements of disclosure in social networks (Twitter, Facebook, LinkedIn, Instagram), on devices (mobile & tablets) as well as on traditional web pages (taking into account the dramatic increase in mobile browsing).

For complete information on the FTC’s .Com Disclosures report—and to learn the six things that you need to know about disclosure in social, mobile and web—please sign up for our whitepaper at www.cmp.ly/dcdreport.

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CMP.LY - FTC .Com Disclosures Executive Summary

  1. 1. EXECUTIVE SUMMARYNote: for complete white paper please visit www.cmp.ly/dcdreportHow the Updated FTC .Com Disclosures AffectSocial, Mobile & Digital Advertising  
  2. 2.  About CMP.LYCMP.LY offers the only purpose-built social media disclosure solution. For more thanthree years, CMP.LY has worked with leading brands and agencies to addressdisclosure challenges and demonstrate best practices. For more information aboutCMP.LY solutions, and to stay abreast of industry updates, please visit www.cmp.ly.Legal DisclaimerThis document is not intended to provide legal advice and you should seek the advice ofcounsel to discuss specific application of disclosure solutions to your uniquecircumstances.How the Updated FTC .Com Disclosures Affect Social, Mobile andDigital AdvertisingOn March 12, 2013, the FTC released a report to address issues presented fordisclosures in social, mobile and other digital channels. The .Com Disclosures reportprovides updated guidance—the previous report was issued in 2000—and adds furtherclarification to the FTC’s 2009 Guide to Endorsements and Testimonials.Like the original, the updated report emphasizes that consumer protection laws applyequally to marketers across all mediums, whether delivered on a desktop computer, amobile device or more traditional media such as television, radio or print. Technologicalrestrictions on space, the design of certain social media tools or the size of a givenadvertisement in a small screen or window do not exempt advertisers from makingrequired disclosures and notices on the platforms such as Twitter, Facebook, Pinterest,etc., or on mobile phones, smartphones, tablets and other communications devices.Best Practices for DisclosureThere are a few key considerations that we at CMP.LY feel are fundamental todeveloping and establishing best practices, including: • Ensuring the delivery of notice and/or disclosures, as well as a good user experience • Providing consumers with access to all relevant information • Ensuring programs can be reasonably monitored for both the inclusion and omission of disclosures • Streamlining and standardization of disclosure methods • Using clear, attention-getting labels and plain language • Educating the marketplace with regard to the importance and meaning of disclosuresNote: for complete white paper please visit www.cmp.ly/dcdreportCMP.LY DCD Executive Summary – March 18, 2013 Revision 1 2  
  3. 3.  The Top Things You Need to Know about Disclosure1. Disclosure StandardThe FTC has drawn a hard line and it’s time for companies to get serious aboutdisclosures. The overall rules are largely unchanged, but now they’ve been put incontext for the modern marketing landscape, including social and mobile.2. Say What You MeanMarketers can no longer rely on hacks and ad-hoc solutions—such as generic links andvague hashtags like #SPON—to make disclosures. Disclosures need to be written inclear, plain language that consumers can easily understand and placed as close aspossible to the claim.3. Space ConstraintsIf a disclosure is required for a space-constrained ad—such as a tweet or statusupdate—it should be made each time the ad is posted. Don’t assume that consumerswill see your posts in sequential order. If the disclosure doesn’t fit, the FTC says the adshould be changed to include the disclosure or the platform should not be used.4. Hyperlinks – Dos and Don’tsDisclosures should not be buried behind a hyperlink when they can be written out incontext. In situations where a hyperlink is unavoidable (such as space-constrainedformats like Facebook and Twitter), it should be labeled as clearly as possible and usedin such a way as to maximize the chance that the consumer will actually click through tothe full disclosure information.5. Design FactorsDisclosures must be responsive and account for device limitations such as screen sizeand technology constraints such as the fact that mouseovers, pop-ups and PDFs thatmay not function as intended in all display environments.6. Other ConsiderationsDisclosures must be accessible from any device or platform (across all mediums) that aconsumer may use to view a marketer’s ad. Don’t forget that there are also other usecases (e.g. contests and promotions), requirements (e.g. reasonable monitoring) andchallenges (e.g. cross-platform syndication) that must be taken into consideration whendisclosing important legal information via digital platforms.Note: for complete white paper please visit www.cmp.ly/dcdreportCMP.LY DCD Executive Summary – March 18, 2013 Revision 1 3  
  4. 4.  What Has Changed?In many ways, nothing has changed regarding the requirements for disclosure.However, the FTC has offered up much clearer guidance as to how these requirementsapply to the inclusion of disclosures in digital marketing channels, giving particularconsideration to social and mobile channels that have emerged since the original report.As before, required disclosures must be “clear and conspicuous” and the report goes asfar as saying that “if a particular platform does not provide an opportunity to make clearand conspicuous disclosures, then that platform should not be used to disseminateadvertisements that require disclosures.”Disclosures must also be unavoidable, in close proximity to the claim that requiresdisclosure, give context to the message and function as intended across all formats.Furthermore, when hyperlinks are the most effective way to deliver disclosureinformation (such as in space-constrained environments), they should be “obvious” andexplicitly labeled in language that clearly conveys information about the content on thelinked page.What Does this Mean for Marketers?  Marketers selling and promoting goods online should review current practices to ensurethat the placement and prominence of required disclosures are sufficient. The FTC alsonow requires that marketers take into account mobile-specific factors, such asresponsive website design, screen resolution and device limitations.For marketers promoting or marketing in social and mobile channels, the changes aremore pronounced. Some ad-hoc disclosure methods were specifically called intoquestion—in particular the use of #SPON, generic link shorteners and includingdisclosure information in preceding or subsequent messages. Clear and prominentdisclosures that provide unavoidable context must be used in the body of the messagemoving forward.Marketers need to review and update their social media policies to reflect theseguidelines. Note that brands and agencies should have a conversation to ensure thatpolicies and practices are aligned—doing so can avoid further inquiry and costlyinvestigation by regulators.Don’t forget that under the FTC’s Guide for Testimonials and Endorsements reasonablemonitoring of disclosures is also required. This requirement goes beyond mere sociallistening and includes monitoring known third parties for the omission of requireddisclosures as well as the inclusion of false, misleading or unsubstantiated claims.Marketers should not avoid programs simply because of compliance requirements;process and automation solutions do not need to be onerous or restrictive. With someforesight and planning, programs can be structured, managed and even measuredmore effectively as a result of applying best practices.CMP.LY DCD Executive Summary – March 18, 2013 Revision 1 4  
  5. 5.  How CMP.LY Addresses these ChallengesCMP.LY is the one commercial solution purpose-built to help marketers and businessesaddress disclosures and compliance challenges in social media networks such asTwitter and Facebook. Our patent-pending technology helps businesses and individualsalike meet their legal obligations while increasing openness and transparency on thesocial web.We created the CMP.LY Standard Disclosure Framework to provide marketers andlegal stakeholders a simple, documented, and effective way to address requireddisclosures and applicable monitoring requirements across all social and digitalchannels, and at scale. Designed with both consumer and business needs in mind, oursolutions address the need to communicate with consumers in plain English and inspace-constrained environments while still delivering the often lengthy and nuanceddisclosure content required of businesses. The CMP.LY approach utilizes astandardized system of layered notices to provide the most effective method ofdelivering disclosures and important information to consumers in social and digitalchannels.You can use any of our disclosure URLs to link directly to a detailed disclosure pageproviding the full legal language or, instead, to a page of content (such as an article or avideo), which will then be framed with a summary of your disclosure—from which thereader can then view the full disclosure page. With tweet-friendly character counts, ourPlain Language disclosures provide notice of disclosures, disclaimers, warnings andother fine print in simple, recognizable words. These URLs provide clear notice to thereader that they link to important legal information, without distracting from the messagecontent or taking up too many characters.Key Aspects and Benefits of Using CMP.LY’S Disclosure Solutions • Simple Disclosure Standard: The value of consistency to the consumer is underscored in the .Com Disclosures report. Broad use of the CMP.LY disclosure framework can contribute greatly to the collective consumer experience. • Structured Disclosure Method: Our solution ensures businesses can implement consistent disclosure policies and methods across their organizations, communications, campaigns and channels. • Clear and Conspicuous: With CMP.LY you can use plain and understandable language to communicate disclosure information. • Robust and Flexible Framework: We make it easy to address a broad range of disclosure and compliance needs. With CMP.LY’s solutions, businesses can chose from a broad range of notice and display options that can be used to present disclosures clearly within the text of a message, in proximity to a claim and even at the top of a webpage.CMP.LY DCD Executive Summary – March 18, 2013 Revision 1 5  
  6. 6.   • Universal Accessibility: Our disclosure framework is optimized for use across platforms as well as mobile screens and operating environments, ensuring your disclosures are not compromised by technology add-ons or other limitations. • The Power of Layered Notices: CMP.LY was designed to address disclosure needs in space-constrained environments. Our framework provides the ability to combine multiple disclosures, lengthy disclosures, additional context and supporting information, without detracting from the consumer experience. o Make clear, in-message disclosures and notices using our plain language disclosure URLs with immediate access to additional information. o Present additional disclosure content and context that is easily accessible by consumers across any platform or device. • Unavoidable Presentation: Implement CMP.LY technology to provide consumers with important disclosures in unavoidable frames and interstitial pages when promoting content in social channels. • Documented Process: Using CMP.LY ensures that you have a complete audit trail to show compliance and demonstrate best practices. • Centralized Recordkeeping: CMP.LY provides you with a consolidated repository of your social and digital disclosure and compliance documentation across all programs and platforms. • Automated Compliance Monitoring: When disclosure monitoring is required— as with FTC testimonial and endorsement guidelines—simply incorporate our automated monitoring for the inclusion and omission of disclosure information through advertiser owned channels as well as third-party advocate channels. • Valuable Disclosure Measurement: Using CMP.LY disclosures not only helps in addressing your compliance needs, it also provides you with a way to measure click-through data and other consumer engagement with your disclosures.CMP.LY DCD Executive Summary – March 18, 2013 Revision 1 6  
  7. 7.  How Do the Updated .Com Disclosure Guides Impact CMP.LY?Enabling transparency with consumers is at the heart of what we do. We are constantlyincorporating feedback from consumers, marketers and regulators to improve theeffectiveness of our solutions.In response to the updated guidelines we are expanding the CMP.LY DisclosureStandard to include more plain language disclosure options to provide a wide selectionof disclosure URLs that address a broad range of needs and preferences.Additionally, we will be revising our disclosure badges to incorporate more text anddisclosure content in conjunction with the disclosure icon itself to ensure the standardsoutlined in the guidelines can be met when this disclosure method is used.Where Can I Learn More?The FTC provides businesses with resources, insights and access to closedinvestigations and actions at www.ftc.gov.The Word of Mouth Marketing Association (WOMMA) has been on the forefront of theissues of disclosure, transparency and ethics in WOM marketing since 2004. There area number of resources available at www.womma.org/ethics and a recently updatedSocial Media Disclosure Guide can be found at www.womma.org/disclosure. Pleasenote that the WOMMA Members Ethics Advisory Panel (disclosure: Tom Chernaik, CEOof CMP.LY, is the Co-Chair of the WOMMA MEAP) will be updating the Social MediaDisclosure Guide in the coming weeks to account for this revised guidance. In addition,WOMMA offers a daily SmartBrief, available athttp://www.smartbrief.com/news/WOMMA/index.jsp.CMP.LY offers the only comprehensive and purpose-built social media disclosuresolution. For more than three years, CMP.LY has worked with leading brands andagencies to address disclosure challenges and demonstrate best practices. For moreinformation about CMP.LY solutions, and to stay abreast of industry updates, pleasevisit www.cmp.ly.For the complete white paper and additional analysis of the .Com Disclosures report,please visit www.cmp.ly/dcdreport or sign up for our email newsletter.  CMP.LY DCD Executive Summary – March 18, 2013 Revision 1 7  

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