In addition to legal analysis, legislative developments, and some general whimsy, in this blog we highlight commentary from regulators and industry figures in the advertising law space. We had the opportunity to hear from several such individuals last week at the ANA Masters of Advertising Law Conference.
One panel featured the Associate Director of Advertising Practices at the Federal Trade Commission, Serena Viswanathan, and the Vice President for the National Advertising Division of BBB National Programs, Laura Brett. Ms. Viswanathan disclosed as part of the presentation – and we would be remiss not to include the same here – that the opinions expressed were her own and not those of the FTC.
The moderators on the panel were our very own Amy Mudge and Daniel Kaufman. Amy and Daniel led their celebrity guests through a discussion of several hot topics, and we’ve highlighted some of the most notable takeaways below.
- Blurred or Stealth Advertising
- What is it? When advertising is included in media or entertainment without a clear delineation between the ad and the content.
- What did the experts say?
- Ms. Brett noted that the NAD is actively looking to bring monitoring cases in this area and that if advertisers are using affiliate links, they should look at previous NAD decisions. In one case, the NAD found the use of affiliate links were not “advertising” because the editorial team recommended the product(s) independent of any input from the business team on affiliate marketing. Ms. Brett also noted that the NAD believes influencer marketing to teenagers is an underserved area.
- Ms. Viswanathan highlighted the FTC’s “Protecting Kids from Stealth Advertising in Digital Media” workshop and how the FTC’s activity in this area is in response to the blurring of advertising and content in places where kids are online. Best practice if targeting a younger audience is not to blur advertising and content at all. For more, see Amy’s blog post on the FTC’s staff report.
- Junk Fees
- What are they? Fees added on to a product or service that are often disclosed late in the purchase process.
- Ms. Viswanathan noted that while the FTC has been concerned with deceptive fee practices for a long time, industry and consumers alike have complained to the FTC about the abundance of fees in the marketplace currently. The FTC recently proposed a rule on junk fees, and Ms. Viswanathan encouraged industry to provide comments to the FTC on how they may be affected. She specifically noted that to the extent comments include data and economic analysis, that’s helpful. For more on the junk fee rule, see my blog post on the announcement.
- Aspirational Claims
- What are they? Aspirational claims are statements about what a company intends to do, most commonly used for environmental, social, and corporate governance (ESG) issues.
- Ms. Brett emphasized that aspirational claims need to be substantiated. The bar for substantiation is lower than for other claims, but there still must be evidence that the goal is achievable. And if the facts change such that the claim is no longer supported, then the claim needs to change too. The NAD has issued several decisions in this area for advertisers seeking additional guidance.
- Social Media
- What is it? You know this one.
- Ms. Viswanathan discussed the FTC’s interest in platforms moderating advertising to reduce scams and fraud. The FTC issued orders under its Section 6(b) authority earlier this year seeking information on how platforms screen for misleading ads – ultimately, the FTC wants practices in place to reduce the amount of paid advertising for fraud online.
- Other Highlights
- The NAD and FTC believe that causal claims between a product and human health effects generally require randomized and controlled human clinical trials.
- Don’t collect reviews in a way that limits responses to individuals who had a positive experience.
- If AI tools incorporate bias, then the FTC takes the position that there is consumer harm.
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