Marketers hawking diet pills and other questionable goods on social media must be more forthcoming. Digital ads that appear on Twitter, Facebook and other mobile sites must be accompanied by disclosures to avoid deceptive practices, according to a rule update issued Tuesday by the Federal Trade Commission.
The new rule "takes into account the expanding use of smartphones with small screens and the rise of social-media marketing," the consumer protection agency said in a statement. "The updated guidance emphasizes that consumer protection laws apply equally to marketers across all mediums."
During the height of the technology boom in 2000, the agency issued a set of rules -- Dot Com Disclosures -- that required online advertisers to make "clear and conspicuous" disclosures for ads that could lead to deception and unfair practices without the accompanying fine print.
But the digital ad landscape has changed dramatically since then, as key social-media channels serve ads that are endorsed by celebrities or generated from friends' clicking of the "Like" button.
"All the regulatory agencies are desperately trying to to catch on with the reality of the mobile ecosystem," says John Simpson, Privacy Project director at Consumer Watchdog. "It's really important that they've taken that step. Whether the FTC can keep up with a lot of practices is still an open question. It's very easy to capitalize on the big names in social media."
Under the new guidance, advertisers must place the disclosure on all devices that consumers may use to view the ad. If the disclosure can't be made clearly and conspicuously on the device or platform, that venue should be avoided, it says.
The 2000 guidance called on advertisers to place disclosures "near, and when possible, on the same screen" as the ad. Acknowledging the limits of a phone screen, the update merely says disclosures should be "as close as possible" to the ad claim.
For example, under the updated rule, a celebrity endorsing a weight-loss pill could disclose his or her affiliation by including the word "Ad" at the start of a Tweeter message.
"In this day and age, you should be able to figure out how to disclose without hurting the user experience," Simpson says.
The rules regarding disclosures that involve a product's cost or health and safety issues haven't been changed. They still must be listed on the same page, and not as a hyperlink. Other hyperlinks must be labeled as specifically as possible.
The FTC, which may impose a fine on rule violators, also told marketers to avoid using pop-ups to display disclosures, since they're often blocked.
Shown on its website, Twitter's policy for promoted products "requires advertisers to promote honest, authentic and relevant content." Political ads, for example, are shown with a purple arrow icon.
"Advertisers may not mislead or confuse users by inaccurately or deceptively representing their brand or product," Twitter says.
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