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What Digital Advertising Industry Restrictions Do I Need to Be Aware of?

One of the primary benefits of digital advertising is the ability to reach thousands and even millions of people with the few clicks of a button. However, there’s a heavy caveat associated with this immense benefit—the dangerous ease of which you can unintentionally offend, wrong, or deceive the masses.

In most cases, maintaining the perspective that advertising must tell the truth and not mislead consumers—make sure you can substantiate your claims—will lead you safely through the gamut of promoting your business online. Even with this perspective, there are still digital advertising restrictions and regulations you need to be aware of in order to maintain smooth and problem-free operations.

Advertising and Marketing Basics
The Federal Trade Commission (FTC) states that under the law, “claims in advertisements must be truthful, cannot be deceptive or unfair, and must be evidence-based.” This may seem obvious upon first reading, but think about how passionate you can get about your product or service. Impassioned advertising can naturally lead to some less than wholly accurate information. Deception isn't always intentional. Be sure to have several sets of eyes reviewing your ads before they go live to ensure you can always back up the features and benefits you’re advertising.

Children’s Privacy
Advertising to children necessitates special vigilance in complying with truth-in-advertising standards. If you advertise directly to children or market kid-related products to their parents, you’re under especially strong state and federal scrutiny. If you have a legal department, they should be reviewing your ad copy prior to publishing (you know what they say, “CYA” [cover your advertising]).

If you don’t have a dedicated legal department, one of the first places you should start is with information about the Children’s Online Privacy Protection Act (COPPA), which pertains to the information websites can collect from kids.

If you use endorsements in your advertising, you need to make sure you satisfy FTC’s standards as stated in their Guides Concerning Use of Endorsements and Testimonials in Advertising. Even if your endorsements and testimonials are coming from local figures, those you believe incapable of making a large-scale impact, too small to raise a flag, you still need to consult this FTC compliance resource.

Environmental Claims
“Green” claims about your product, service, or company are now independently strong selling points. In fact, many customers are willing to pay more for products and services that are supported by green materials, processes, and operations. Because of this green allure, some companies have taken liberties with their claims. Just because a company’s packaging is made with 1 percent recycled materials or one of their employees drives a hybrid certainly doesn’t mean they’ve earned the right to advertise green claims.

If you’d like to make environmental claims, you’ll need provable scientific evidence to support your statements. Learn more by referencing the FTC’s latest Green Guides. Similarly, you can also file a complaint if you think you’ve identified deceptive or inaccurate claims or practices.

ads that say 9 out of 10 doctors recommend
Companies must support their advertising claims with solid proof. This is especially true for businesses that market food, over-the-counter drugs, dietary supplements, contact lenses, and other health-related products.

In order to qualify as solid proof, your claim needs to be statistically significant. Positive results for just a handful of people isn’t sufficient. This means the classic “9 out of 10 doctors recommend product XYZ” must be based on a survey of more than 10 doctors. Similarly, we saw Colgate’s long-time claim (“more than 80 percent of dentists recommend Colgate”) banned by the Advertising Standards Authority (ASA). Why? Although 80 percent did in fact recommend Colgate, some of that 80 percent also recommended other, competing brands of toothpaste, which Colgate conveniently forgot to mention in their ads. The moral here is that omission of information is misleading. They say there’s no such thing as bad press, but negative news about health-related products is a likely exception.

You can find additional advice on health claims in advertising from the FTC to make sure you garner nothing but positive press.

Made in USA
Similar to green claims about your products, services, or company, claims about “Made in the USA” can help you attract more customers, even if it means higher prices. (In fact, under the law, some products must disclose U.S. content.) But you can be sure these claims will be investigated. Therefore, you need to read the FTC’s Enforcement Policy Statement on U.S. Origin Claims to make sure you meet all the requirements. If you're completely compliant, be sure to proudly boast your Made in the USA logo throughout your advertising.

Consumer Review Fairness Act
Now that social media can spread messages like wildfire, it represents one of your strongest advertising tools. But it also means that wildfire could consist of negative reviews and comments that could burn your business. The Consumer Review Fairness Act (CRFA) affords consumers the right to express their personal, honest opinions regarding their experiences with a company’s products, services, or conduct. CRFA grants this right across all forums, including social media.

Consistently delivering high-quality services and products is obviously your first priority. But there’s simply no pleasing everyone. So, you need to be ready to deal with negative feedback. However, dealing with should never mean defending.

Consumers are savvier than ever before, and they smell a defensive stance from a mile of IP addresses away. Instead, spin negative public feedback/comments into positive experiences by demonstrating your excellent customer service. This is your chance to show thousands of people how well your company deals with a problem or complaint. In fact, now that so much business is purely virtual nowadays, a company’s ability to support their products/services and follow through after the purchase is a top, growing concern/attraction for customers. If handled with genuine care and tact, getting a public complaint could be great for your business.

.com Disclosures
Just as it is with print, radio, or TV advertising, it’s necessary to disclose certain details in online advertising. However, it’s not always practical to do so, which can make it a challenge incorporating relevant limitations and qualifying information into the underlying claim. Therefore, you should take some time to review the FTC’s .com disclosure guidelines.

Virtually all companies use some sort of email advertising. The Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM) established the rules and requirements for commercial email. (You can see why just calling it spam was so readily and widely adopted.) The CAN-SPAM Act covers more than bulk email to also include “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service.” The act outlines stiff penalties for violations, so you should consider at least a quick scan of the rules.

Giving your email recipients the ability to unsubscribe from your electronic communications is an important part of the CAN-SPAM Act. The act only enforces this requirement for marketing message. For example, it’s not necessary for transactional messages.

Even though you’ll no longer be able to reach certain people with specific types of messages, allowing them to unsubscribe with a click or two is one of the easiest ways to prevent legal problems. Furthermore, more companies now offer the opportunity to edit subscription options. This allows recipients to no longer receive select types of communications while still receiving others. This keeps both parties happy.

International Advertising
If you conduct international business, you can view the Interactive Advertising Bureau’s (IAB) Global Legal Summaries for more information about regulatory and policy updates related to digital advertising across borders and markets. You can also view the FTC’s resource on digital international commerce.

Protection for Consumers Protects Your Business
The countless rules and guidelines for marketing and advertising online may make it seem like it’s your company against the world. But it’s these same regulations that help you achieve and maintain top credibility. That, paired with upholding truth-in-advertising standards, will help you produce appreciative and loyal customers. Use laws, rules, and guidelines to differentiate your company in a positive and competitive manner to connect with quality customers.