Advertising—the Good, the Bad and the Illegal

Social media, online and mobile campaigns are game changers


  • Reflect the honest opinions or experience of the endorser; may not contain any deceptive or unsubstantiated representations if made directly by the advertiser; and
  • Disclose any material connection between the endorser and the advertiser that might affect the weight or credibility of the endorsement.

Statements made by bloggers and others who post reviews are also governed by the FTC’s guidelines and you may be held liable for false or unsubstantiated statements they make if you requested that they try the product or service and write a review, or if you provide them with a gift, prize or any other material benefit and they fail to disclose it. You may also be held liable if your employees, agents or sales affiliates write positive reviews of your products and services without disclose their relationship to you. The FTC recommends that you provide guidance and training for your bloggers, and that you monitor bloggers being paid to promote your products. And make no mistake—the agency really means it. Fines and sanctions can be significant and the FTC is paying close attention to endorsements.

What else might be considered an endorsement? The “likes” you represent you have on your company’s Facebook page may be considered general endorsements as well, and if you run promotions that require people to “like” your company to participate, so-called “like-gated” promotions, you not only have to make sure that you disclose the material terms and conditions of the promotion before consumers hit the “like” button, but that your “likes” properly convey they endorsements they suggest. In other words, that the people who “liked” your Facebook page received the benefit of the advertised promotion.

 

The new frontier: online and mobile marketing

Technology-enabled advertising, whether you are using your own platform or others, not only must comply with laws and regulations that apply to traditional advertising, but must also meet additional requirements, perhaps several different sets, depending on the form of advertising. Here are additional considerations:

Email and CAN-SPAM: The CAN-SPAM Act applies to all commercial email of which the primary purpose is advertisement or promotion of a commercial product or service, including email that promotes content on commercial websites. The law applies regardless of the number of people to whom you are sending the message and whether you already have a business relationship with them, and does not exclude business-to-business e-mail. If you e-mail customers and potential customers, you must comply with requirements regarding content, labeling and opt-out.

Mobile marketing: If you engage in mobile marking—sending text messages and using mobile devices and platforms to advertise to customers and potential customers—then you must understand and comply with federal and state telemarketing and email laws. For example, the Telephone Consumer Protection Act requires express consent from mobile device owners before you send promotional text messages and CAN-SPAN may also apply in the mobile space. At a minimum some elements you want to include in your messages are identifying them as advertising and providing notice of the right to opt-out and the mechanisms for doing so. In addition, many wireless carriers have their own policies with which you must comply.

Social media advertising: When you use social media platforms to advertise, you must also comply with a number of other requirements, not the least of which are the platforms’ own policies. In addition to dictating how you can use the site to advertise, limiting or prohibiting certain activities for commercial purposes, social media and other technology-enhanced platforms’ privacy policies may limit how you collect, use and share personal information. These sites and platforms may have multiple policies and guidelines and they can change frequently.

Advertising can have huge payoffs but it can also be extremely costly if done wrong. Make sure your advertising is both good and legal.

 

 

Eric Pritchard is a partner in Kleinbard Bell & Brecker LLP, Philadelphia, a commercial law firm with a national practice in the electronic security and life safety industries. This column does not constitute legal advice; contact an attorney with specific questions.