FTC Issues New Social Media Advertising Disclosure Rules

The FTC is on a rampage lately. The Commission has updated the rules related to kid’s privacy and is now taking aim at online businesses in general. To this end, the FTC has issued new social media advertising disclosure rules that FTC new social media advertising disclosure ruleswill not make online business owners and marketers particularly enthusiastic.

Consumer Protection

The FTC is charged with protecting consumers from the evil businesses that roam the land. As a result, companies are required to follow a path of conduct that will protect even the dullest of dimwits in the consumer world. It is this type of thinking by the government that leads to warning labels on your bed mattress.

In this case, the FTC is taking aim at social media marketing. You know those tweets promising weight loss of 30 pounds in 30 minutes? Apparently, the Agency is worried someone will believe them and has issued new rules to protect the low hanging fruit in society. Let’s look at how the rules work, and the new burden businesses face.

Consumers Are Idiots

If you own a business online, you need to start with the assumption your target audience are blithering idiots who spend most of their time focused on remembering to breathe.

Seriously.

Protecting the lowest common denominator appears to be the mindset of the FTC in issuing these new rules.

The new regulations start where the old rules left off. Any advertising you issue must not mislead consumers, even a minority of the consumer market, and must be supported by objective evidence. If anything in the marketing piece could lead to a different conclusion, you must include a disclaimer covering the distinction.

An example can show how these requirements might play out. Let’s assume you send out a general advertisement using a real customer who lost 30 pounds in 60 days using your diet product. You must include a disclaimer indicating such weight loss is not typical and the results a person can reasonably expect to obtain.

Okay, this doesn’t seem too unreasonable…until we get to social media.

140 Characters No More

Tweeting is all the rage these days. If you tweet to support your business, I have bad news. Your 140 characters are going to become much smaller and, in many cases, are going to be gutted by the new rules.

The first thing the FTC is requiring is you use the “Ad:” text at the beginning. In a statement revealing just how business unfriendly the Agency is, it also suggests you can use “Sponsored:” to note the tweet is an advertisement. Sponsored…all 10 characters of it.

Well, at least you still have 130 characters or so, right? No. The FTC is also requiring the inclusion of disclaimer statements in the tweet itself. The Agency provides an example of one such tweet as:

JuliStarz
Ad: Shooting movie beach scene. Had to lose 30lbs in 6 wks. Thanks Fat-away Pills for making it easy. Typical loss: 1lb/wk.

So, now our tweet is down to roughly 120 words. It probably doesn’t matter because the inclusion of the disclaimer language at the end of the tweet contradicts the message of the first part of the tweet. “Lose weight…but not much!”  This message is not exactly the type of pitch that is going to produce sales.

What if your disclaimer can’t fit in the 140-word tweet? Fortunately, the FTC allows you to put it clear and conspicuously on the landing page for the tweet. However, there needs to be a clear indication a disclaimer exists in the tweet, and it can be found by clicking a provided link. In many cases, you are better off simply starting with a new tweet that doesn’t trigger the disclaimer or includes the necessary language.

What about other forms of social media? You need to comply with these requirements on all of the different platforms including Facebook, Google+, Pinterest and LinkedIn. Welcome to the world of the FTC.

Penalties

What kind of trouble can you get into for non-compliance? The penalties are up to $16,000 per violation. If you have 10 advertisements failing to comply with the new rules, you are staring at a potential penalty of $160,000.

In Closing

The new FTC rules represent another step to tame the Internet as a business medium. Whether you think that is a good thing or not is up to you. Your answer honestly doesn’t matter because you have to comply with these new requirements one way or another. Contact me to get your site and marketing materials reviewed for compliance.

Richard A. Chapo, Esq.

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