The Federal Trade Commission recently updated its guidelines for online advertising to address the growth in mobile and social media marketing. Now a paid tweet has to begin with the word “ad,” as obvious disclosure now must be included with all commercial speech. Is the link you’re tweeting from an employer? A client? You have to mention that. The new rule: If money is changing hands, disclose it.
If the screen can’t handle the extra wording required for disclosures, “then that device or platform should not be used,” the FTC said.
The language sounds prescriptive, the threat of enforcement imminent and intense. Yet there’s no call for alarm, according to the commission.
“These are not regulations,” Richard Cleland, assistant director for the Division of Advertising Practices at the FTC, told the E-Commerce Times. “These new guidelines are pure guidance — more of a self-help how-to.”
It would be a mistake to regard those guidelines as a toothless FTC wish list, though.
“The guidelines help you understand what we are thinking about — where we’re coming from in evaluating whether your disclosure is enough,” added Cleland. “You now know what we’re weighing in the decision.”
This current guideline issuance continues the FTC trend to clamp down on unethical practices in new media. Three years ago, the rules came down on bloggers; if you’ve been paid to review or endorse a product by a brand, you have to disclose that.
If the FTC has already clamped down on shady bloggers, why does it need to release these new guidelines now?
Where’s the Beef?
The opportunity for unscrupulous marketing behavior online is growing. There has been a rise in native advertising, advertorials and content marketing, the 2013 Pew study on the media shows. Much of that content is distributed via Facebook, Twitter and Pinterest, and it will continue to spread to the mobile environment as well.
What makes this growth all the more worrisome is the extension of marketing messaging into places where readers expect none.
One prime example of this is The Atlantic’s recent misstep with a Church of Scientology native ad. A native ad is essentially what the print news industry calls an “advertorial” — i.e., an advertiser-produced article.
The piece did have a small box identifying it as “sponsored content,” but that easily could have been overlooked by readers, and it is doubtful that most would have understood what it meant if they had seen it. Fewer still would have moused over the “What’s this?” question near the box to see the explanation that the article was indeed an ad.
Making matters worse, the comments on the article were entirely positive at first, despite an uproar over the piece elsewhere on the Internet. It turns out that The Atlantic’s marketing team was keeping negative comments and cries of alarm off the comment page, at least in the beginning, which further confused readers over the value and credibility of the content.
“In the case of the Scientology post, our marketing team was monitoring some of the comments,” said Natalie Raabe, a spokesperson for The Atlantic, in the publication’s official explanation of the debacle to The Washington Post.
The incident, “has brought to light policies on how we monitor sponsored content,” she added.
“The Atlantic found itself rapidly taking down from its website a vaguely identified advertorial from the Church of Scientology, explaining afterward: ‘We now realize that as we explored new forms of digital advertising, we failed to update the policies that must govern the decisions we make along the way. It’s safe to say that we are thinking a lot more about these policies after running this ad than we did beforehand,'” notes the Pew report.
One has to wonder how monitoring comments so that only positive mentions show under any given article was an acceptable practice under any policy.
Resource-strapped news orgs are using native ads as supplemental content to feed the gaping 24/7 news maw and to raise revenue. At first glance, it appears to be an understandable move. After all, news has always been funded by advertising, and advertorials are nothing new.
The difference is that there used to be an impenetrable wall between journalists and advertisers, and between news content and advertising content — but now that wall has been torn down. Native ads rarely bear sufficient distinction from news content across all of new media, including mobile, and they are not limited to heretofore respected news publications like The Atlantic.
Will the New FTC Guidelines Work?
“I feel these rules are a step in the right direction, but by no means are they making any unethical marketers run for the hills,” Jameson Brandon, CEO of Digital Centrix, told the E-Commerce Times. “Overall, most ethical marketers feel that those who are unethical ruin things for them.”
There is definitely some discomfort with these new guidelines among the online advertising community.
“The issue of enforcement is open air at the moment,” Sarah Hudgins, director of public policy at the Interactive Advertising Bureau, told the E-Commerce Times.
“We do have precedents from the existing disclosures enforcement,” she said, “but enforcement will probably be handled case by case still — and there is a lot of fear, as no one wants to be the first test case on something new.”
The FTC is aware of the fear and confusion but is unsure how to go about relieving it.
“I would like to provide definitive answers to every circumstance, but these are complex issues,” said Cleland, “so the best that can be done is to make our decision process transparent.”
A review of the enforcement actions taken under the earlier blogger rule sheds some light on how aggressively the new FTC guidelines are likely to be enforced. To date, there has been what amounts to a smack on the hand for four offenders: Ann Taylor; HP; Nordstrom; and Hyundai. There has been actual enforcement action against two: Legacy Learning and Reverb. A total of six actions is hardly overkill.
“We tried to take an educational rather than a regulatory stance,” said FTC’s Cleland. “We are trying to get everyone to understand that they need to make full disclosure to tweets and blogs, etc.”
However, the FTC does move aggressively when it believes an advertiser is being deliberately deceptive. The agency’s goal appears to be to take down the worst offenders and educate the rest by notifying them of the error of their ways.
“We are doing everything we can to get the word out,” said FTC’s Cleland.
It is virtually impossible to check for every possible offender on the Internet and on mobile, however.
“There’s no way we can look at all the downstream influencers, so we focus on the advertisers,” said Cleland.
Burden or Blessing?
So how do marketers view these new guidelines? Are they perceived as a burden or blessing to the online advertising industry?
“What the FTC has pushed out really should not come as a surprise to, nor be a burden for, companies who do things ‘right,'” said digital marketing consultant Ted Sindzinski.
“In social media, where the name of the game has always been transparency, the more a company does to set the stage, the better the response tends to be,” he told the E-Commerce Times.
“Even if the new regs are only marginally successful, the change will be positive,” said James Delaney, COO of DMi Partners.
“There will be a better match between prospective customers and advertisers,” he told the E-Commerce Times.
The IAB also acknowledged the efforts the FTC has made and the difficulties in carrying out the task, albeit with a caveat or two.
“The FTC had a monumental task in front of them in terms of extending the guidelines,” said Hudgins.
“That said, some of the guidelines make sense — but others are short-sighted. But we see that often from many agencies and Congress when they try to regulate technologies that are still evolving,” she observed.
“The guidelines are inflexible on development in the space,” Hudgins said. “They are a little dismissive of what the space is capable of. Some of it is ambiguous and confusing, especially in the mobile space.”
Even so, the guidelines are “almost there but not quite,” in Hudgins’ view.
So what can marketers do to steer clear of a run-in with the FTC?
“We are advising everyone to read the guidelines carefully and weigh your campaigns carefully and ask yourself if you are being upfront in the campaign or if you are trying to hide what you are doing,” said Hudgins. “Don’t limit your creativity, but work with your lawyers to ensure your campaign is completely upfront with the fact that it is a marketing campaign.”
Curb the lawyer lingo, though, because it won’t help your case and may even hurt it.
“Sometimes there is almost an overdisclosure,” said Cleland. “It needs to be — in fact it’s better if it is in plain English.”
Be vigilant in your efforts to be transparent, because it isn’t only the FTC that polices marketing behavior.
“Bloggers and social media folks often report violators,” said the FTC’s Cleland, “or we read media reports and newspaper stories about someone not following the rules.”
Journalists are otherwise of no interest to the FTC, at least when it comes to their posts and tweets. I asked Cleland to make a call on the Muck Rack social media disclaimer, linked on my own Twitter profile and on those of many journalists I know.
“Because we don’t see journalists’ tweets and posts as commercial speech, those are not of interest to us,” he said, “but to answer your question as to whether that disclaimer link in a Twitter profile is sufficient, I would say it is a very questionable way of communicating that information to your followers.”
While journalism is not commercial speech, the increased drive toward transparency across the Web and especially in social media will likely cause journalists, editors and their publications to rethink how they handle disclosures too.