Digital Advertising Disclosure
If you receive compensation for affiliate marketing of goods or services, or use endorsements or testimonials, you must follow the Federal Trade Commission (FTC) digital advertising disclosure rules.
You must include an advertising disclosure on every website page or blog post or comment that includes a review, sponsored post, endorsement, recommendation, comment or link that is a promotion for a product or service where you may receive compensation. Compensation is usually monetary, but may also be received in the form of goods or services.
Product Review Disclosure
For example, you might receive a free product for a product review. You must have an advertising disclosure that you received the free product as compensation for writing the product review.
The advertising disclosure must be immediately clear and understandable to the reader, in plain language. The reader must be made aware of the compensation relationship.
If a media platform does not provide an opportunity to make a clear and conspicuous disclosure, do not use that platform.
No additional reader action may be required to see the advertising disclosure. No clicking, or hovering over a link may be required. It is not sufficient to have a link that says: Click here to read our affiliate disclosure information. A hyperlink may lead to additional information and should be a different color and underlined. It should have a clear, understandable description of the type of disclosure.
Pop-up disclosures should not be used since they may be blocked. Disclosures must not require the use of Adobe Flash Player, which may not be displayed on mobile devices.
Disclosures should be provided before the consumer makes the decision to buy, e.g., before clicking on an “order now” button or a link that says “add to shopping cart.” For audio claims, use audio disclosures. For written claims, use written disclosures. For video clips, the visual disclosure must be displayed in a legible size, for a sufficient duration, for consumers to notice, read, and understand.
For tweets on Twitter, the word “Ad:” or “Sponsored:” at the beginning of the tweet should be used to inform consumers of the compensated relationship.
The ultimate test is not the font size or location of the disclosure, but whether the information is actually conveyed to the consumer. Requiring consumers to click to “agree” to terms does not make a disclosure clear and conspicuous. Website and blog designs should be mobile responsive, so that text size is legible and scrolling is not required.
FTC Advertising Disclosure Guides
FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Endorsement Guides”) apply to “any advertising message . . . that consumers are likely to believe reflects the opinions, beliefs, findings, or experience of a party other than the sponsoring advertiser”.
The Federal Trade Commission (FTC) has several articles and publications on their website regarding this topic, including, “.com Disclosures, How to Make Effective Disclosures in Digital Advertising.“
Deceptive Trade Practices
The FTC enforces federal consumer protection laws, regarding “unfair or deceptive acts or practices” in advertising, marketing and sales. The same consumer protection laws that apply to offline media also apply to online media, including mobile devices with small screen displays.
An ad is deceptive if it contains a statement, or omits information, that is likely to mislead consumers acting reasonably under the circumstances, and is “material” or important to a consumer’s decision to buy or use the product or service.
If an endorsement is not representative of the performance that consumers can generally expect to achieve with a product, advertisers must disclose the generally expected performance in the depicted circumstances.
Any solicitation for the purchase of consumer products with a warranty must disclose the text of the warranty offer or how consumers can obtain it for free.
Be sure to review digital media for compliance with the FTC requirements for digital advertising disclosure.
Disclaimer: This article is not to be considered or used as legal advice. For legal advice, contact a licensed, competent attorney.
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