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- 1. © 2015 VenableLLP May 13, 2015 ERA Government Affairs Fly-In Rich Cleland FTC Disclosures in a Broadcast, Mobile & Online World Lee Peeler ASRC/ERSP Amy Mudge Venable Jennifer McCabe Euro-Pro
- 2. Richard Cleland* Assistant Director Divisionof Advertising Practices Federal Trade Commission Sensa/Iovate/Dannon/Nestle Substantiation Gut Check Claims Endorsement and Testimonial Guides Dot.Com Disclosures Operation Full Disclosure *The FTC is the only federal agency with both consumer protection and competition jurisdiction in broad sectors of the economy. The FTC pursues vigorous and effective law enforcement; advances consumers’ interests by sharing its expertise with federal and state legislatures and U.S. and international government agencies; develops policy and research tools through hearings, workshops, and conferences; and creates practical and plain-language educational programs for consumers and businesses in a global marketplace with constantly changing technologies. My comments reflect my own views, and do not necessarily reflect the views of the Commission or any individual Commissioner. The FTC’s work is performed by the Bureaus of Consumer Protection, Competition and Economics. That work is aided by the Office of General Counsel and seven regional offices.
- 3. © 2015 VenableLLP Lee Peeler* Council of Better Business Bureaus Executive Vice President and President, Advertising Self-Regulatory Council (ASRC) Disclosures and Supers Online Disclosures Native Advertising Comparative Claims Puffery Denigration *ASRC is a service of the advertising industry and the Council of Better Business Bureaus. The National Advertising Division is an investigative arm of the advertising industry’s self-regulatory system. NAD reviews advertising for truth and accuracy and to assure that advertising claims are properly supported. Advertising industry self- regulation is over 40 years old and was put in place to promote high standards of truth and accuracy. The self-regulatory system reviews the truth and accuracy of advertising claims in all media, including social media; examines the truth, accuracy, fairness and appropriateness of advertising directed to children; reviews privacy practices of websites directed to children, and enforces consumer choice and transparency principles in online interest-based advertising. The system is independent and administered by the Council of Better Business Bureaus.
- 4. Please center image within thisimage area. *Dramatization.Resultsdonotrepresentactualappearanceonatypicalday.ThankyouAdobePhotoshop! Jennifer McCabe Executive Vice President, General Council and Secretary to the Board of Directors of Euro- Pro Operating LLC
- 5. Please center image within thisimage area. *! Amy Ralph Mudge No. 1 Highest Rated Advertising Lawyer 2010-2015* “I have never met nor even imagined there could be a more intelligent, creative, kind, decent lawyer who wins every single case she ever touches” Venable LLP 202.344.4743 amudge@venable.com Blog: AllAboutAdvertisingLaw.com *Quotes and award by the Mudge family grandparents, parents and children who were handsomely compensated
- 6. © 2015 VenableLLP Nissan North American, Inc., FTC, No. C-4454 (9/18/14)
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- 10. © 2015 VenableLLP Strivectin, NAD Case Reports #5826 (4/6/15)
- 11. Stihl Inc. (HandheldPower Tools) NAD Case Reports #5634 (9/24/13)
- 12. *per charge vs.AA 1350 mAh within the first 200 cycles. The Procter & Gamble Company (Duracell Rechargable Batteries), NAD Case Reports #5801 (1/13/15)
- 13. © 2015 VenableLLP Morton Salt, Inc. (System Saver II Water Softening Sea Pellets) NAD Case Reports #5573 (4/15/13)
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- 15. © 2015 VenableLLP But Before We Had the Web
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- 18. © 2015 VenableLLP 1970’s Guidance • Disclosure should be simultaneously in audio and video – Immediately follow the specific representation to which they relate – Presented each time the representation is presented • Audio portion – No other sounds or music would be presented during the disclosure • Video portion – easily seen and read on “all television sets, regardless of picture tube size,” that are commercially available – Readily contrast with the background, and background should consist of only one color or shade – Appear on the screen for sufficient duration to be completely read by viewer • Disclosure should take into account the target audience and “substance of the disclosure should be such that it can be understood by all those individuals that understand the sales representation of the advertisement. If securing this understanding is impractical, then . . . should not be used on television
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- 20. FTC DECEPTION POLICY STATEMENT “Accurateinformation in the text may not remedy a false headline because reasonable consumers may glance only at the headline. Written disclosures or fine print may be insufficient to correct a misleading representations. Other practices of the company may direct consumers’ attention away from the qualifying disclosures.”
- 21. FTC DECEPTION POLICY STATEMENT “Qualifyingdisclosures must be legible and understandable. In evaluating such disclosures, the Commission recognizes that in many circumstances, reasonable consumers do not read the entirety of an ad or are directed away from the importance of the qualifying phrase by the acts or statements of the seller.”
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- 24. © 2015 VenableLLP The 4Ps of Clear and Conspicuous Disclosures – Prominence • Is it big enough for consumers to notice and read? – Presentation • Is it worded in a way consumers will understand? – Placement • Is it where consumers are likely to look? – Proximity • Is it close to the claim it modifies?
- 25. © 2015 VenableLLP Guidelines
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- 27. © 2015 VenableLLP Bottom Line on All Disclosures • Disclosures must be presented “clearly and conspicuously“ • The FTC’s “clear and conspicuous” standard is a performance standard, and not a font size or a minimum number of seconds • Disclosures should be easily noticeable, without consumers having to look for it • Disclosures should be close to the claims they relate to and not hidden or buried in footnotes or in blocks of text people are not likely to read • Understand the limitations of a particular platform on which an ad is disseminated and modify claims and disclosures accordingly • Analyze disclosures in same way you analyze whether a main claim is meaningful and resonates with the target audience • Disclosures can only qualify or limit a claim to avoid a misleading impression; it cannot cure a false claim © 2015 Venable LLP
- 28. Not a casebut just completely awesome
- 30. © 2015 VenableLLP When Can a Disclosure Provide a Cure?
- 31. © 2015 VenableLLP DirectTV, LLC (Picture, Sound, Signal Reliability and Customer Service Advertising), NAD Case Reports #5820 (3/25/15)
- 33. © 2015 VenableLLP Smart for Life Weight Management Centers (Smart for Life Cookies), ERSP Reports #242 (6/28/10)
- 34. © 2015 VenableLLP Dyson, Inc. (DC65 and DC59 Vacuum Cleaners), NAD Reports #5776 (10/23/14)
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- 36. © 2015 VenableLLP Euro-Pro Operating, Inc. (Shark Rocket Vacuum Cleaner), NAD Reports #5769 (10/3/14)
- 37. © 2015 VenableLLP What is the Offer?
- 38. © 2015 VenableLLP DirectTV, FTC, #3:15-cv-01129 (3/11/15)
- 40. © 2015 VenableLLP Premier Care in Bathing Walk-In Tub ERSP Report #360 (12/23/14)
- 41. © 2015 VenableLLP Takeaways for TV Ads • Is the claim too good to be true? – Can you incorporate the qualifying language into the claim itself? • Can you streamline and simplify disclosures to make them more digestible? • Take a step back and analyze like a consumer asking “would I notice this and be likely to take it in?” • Avoid disclosures – With small print (no mouse type) – With poorly contrasting print (no grey on grey) – With drive by language appearing for too short a time – Forgotten at the bottom of the screen or appearing after the claim – With kitchen sink or confusing language – With distracting elements
- 43. © 2015 VenableLLP DirectTV, FTC, #3:15-cv-01129 (3/11/15)
- 44. © 2015 VenableLLP Premier Care in Bathing Walk-In Tub ERSP Report #360 (12/23/14)
- 45. © 2015 VenableLLP Premier Care in Bathing Walk-In Tub ERSP Report #360 (12/23/14)
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- 50. © 2015 VenableLLP One Technologies • Company marketed free credit scores and provided customers with a 7- day free trial of their credit scores, which turned into a paid credit monitoring subscription after 7 days if customer failed to cancel. • FTC: company failed to provide adequate notice to consumers that they would be enrolled in the negative option credit monitoring program that charged $29.95/mo unless they called to cancel. © 2015 Venable LLP
- 51. © 2015 VenableLLP One Technologies Before © 2015 Venable LLP Free 7-Day trial when you order your 3 Free Credit Scores. Membership is just $29.95 per month until you call to cancel.
- 52. © 2015 VenableLLP © 2015 Venable LLP One Technologies Before Offer Details By submitting your secure order you will be immediately charged a $1 refundable processing fee, be eligible to receive your free credit scores, and begin your trial membership in ScoreSense credit monitoring. At the end of the 7-day trial period, your credit/debit card will be charged $29.95 on a monthly basis unless and until you call 1-855-277-3046 to cancel your membership in ScoreSense.
- 53. © 2015 VenableLLP One Technologies After © 2015 Venable LLP
- 54. © 2015 VenableLLP One Technologies After © 2015 Venable LLP
- 55. © 2015 VenableLLP Takeaways for Online Ads • 4Ps apply in the virtual world; everything you learned before applies • If you cannot disclose clearly and conspicuously on a particular platform, you should not use the platform • Need to look at the disclosure on a variety of screen sizes and different lighting conditions • Avoid: – Hyperlinks, but if used must be labeled clearly – Hovers/popups – Excessive scrolling • Draw attention to the disclosure – Use common sense to place where consumers are likely to notice and understand them in connection with the representations that the disclosures modify – Text prompts are encouraged, tied to the disclosure to which they refer and provide adequate cues • Abbreviations need to be well understood – not #spon
- 56. © 2015 VenableLLP Universal Commerce, LLC (Senior Mobile), ERSP Report #355 (10/08/14)
- 57. © 2015 VenableLLP Who are these guys?
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- 59. © 2015 VenableLLP Influencers Campaigns • When it is not otherwise clear to the audience, endorsers must disclose their sponsorship role, or any financial interest, benefit or incentives that they received from a company in their personal blogs, YouTube channels, Facebook pages, or other online content or on any company page to which they post content. • How can disclosures be made clearly and conspicuously? • Location and frequency of disclosure: – On brand page, it is sufficient to make such a disclosure in the posting itself. – On endorser’s personal page, disclosure needs to be made frequently enough and in a prominent enough location so that consumers will know about affiliation. – Simply disclosing relationship with company in the “About” page is not likely to be sufficient. – YouTube video, in the video or in the video info section
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- 68. © 2015 VenableLLP How/What/Where do you need to disclose native advertising? • No magic words. There is flexibility but consider the nature of the relationship. • Top left of article with a banner text cue and/or in first paragraph of the content • Consider shading or other visual cues to highlight sponsorship
- 69. © 2015 VenableLLP Bottom Line • Disclosures are not extinct. Yet. • Old guidance applies but old rules do not • Time to simplify and amp it up • Focus on what matters • It takes a village – multiple actors need to step up their game • Window of opportunity to get this right, before the FTC writes new rules