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If Stephanie Courtney, the actress who portrays Flo in the Progressive Insurance commercials, tweets anything remotely connected to the auto indemnity company, she is now required to file a disclosure with the FTC.
The FTC released a detailed 26-page report on March 12, outlining the disclosure responsibilities of marketing companies and others who promote products and services. The report is an expansion of the agency?s May 2000 rules, ?Dot Com Disclosures: Information About Online Advertising.? Those rules were meant to address marketing online when the Internet was still relatively new. But in today?s world of smartphones and social media, the agency felt it was necessary to address new issues created by technology.
Tweet Disclosures
The report extensively covers the concept of ?clear and conspicuous? disclosure as it pertains to online advertising. In short, all ads must be truthful, easily substantiated and fair. Despite having a maximum of only 140 characters in length, Twitter messages that are meant to entice someone to buy something must comply with advertising regulations. The FTC said marketers are required to place the disclosure as close as possible to the advertising verbiage.
For instance, if Brian Ferdinand?of Liquid Holdings makes any sort of reference to his company in a tweet about investing, he must disclose the tweet as an advertisement. The FTC said the word ?Ad? or ?Sponsored? at the beginning of the tweet is acceptable and required for this purpose. Obviously ?ad? would be better for Twitter, as to not eat into the limited character count.
Facebook Advertising
Facebook, Inc. brought in $4.28 billion in advertising revenue for 2012, according to the Wall Street Journal. Though Facebook ads are somewhat more self evident as to their intended purpose than Twitter ads, they must also be in compliance with FTC regulations. There are those ads in news feeds that look like a post from a Facebook user, but are actually company-produced spots. An analyst for BTIG Research, an investment research firm, told Valued Business News that Facebook not only bombards mobile users with ads, but ads that are completely irrelevant to them. Regardless, users who click on ads without the proper disclosures and buy something may be entitled to a full or partial refund, according to the FTC report.
Array of Penalties
With the Web being as vast as it is, enforcement will be difficult, but the penalties are harsh. The FTC could issue a cease-and-desist order, requiring a company to remove the ad immediately. A fine of $16,000 could also be imposed for each day the ad remains online after the order is issued, according to the Bureau of Consumer Protection. Civil penalties start in the thousands and can easily surpass millions of dollars, depending on the infraction. Some advertisers have been ordered to produce new ads that correct the false or misleading information from a previous ad. Though the FTC does not prosecute criminal charges, the Department of Justice could get involved when the infraction is overly egregious.
About Erick Kirks
With over 14 years in internet marketing experience with large, national companies and small local business owners, I bring fresh ideas into play to bring customers in the door. My work ethic is founded on honesty, integrity and meticulous attention to detail, all followed through with accountability and excellent communication.
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