Running Web Ads OnLine - Be Careful!
Federal Trade Commission Guidelines for OnLine Advertising

The OnLine marketplace is not a closely regulated environment. But even in cyberspace, advertising has boundaries. Fraud and deception are unlawful no matter where it occurs. The Federal Trade Commission ("FTC") has enforced and will continue to enforce its consumer protection laws in cyberspace. Many of the general principles of advertising law apply to Internet ads. However, new issues arise almost as fast as technology develops. Businesses which advertise online must consider certain issues as they develop online ads, to ensure that they comply with the law and FTC regulations.

In its simplest form, advertisers must identify all express and implied claims that an ad conveys to consumers. When identifying claims, advertisers should not focus only on individual phrases or statements, but should consider the ad as a whole, including the text, product name and depictions. If an ad makes express or implied claims that are likely to be misleading, without qualifying information, that information must be disclosed. Advertisers must determine what information should be provided in a disclosure. If qualifying information is necessary to prevent an ad from being misleading, advertisers must present the information clearly and conspicuously.

Whether a disclosure meets the "clear and conspicuous" standard is measured by its performance, that is, how consumers actually perceive and understand the disclosure. The key is the overall impression of the ad. In reviewing their online ads, advertisers should adopt the perspective of a reasonable consumer. They also should assume that consumers don’t read their entire Web site, any more than they read every word on a printed page. It is also important for advertisers to draw attention to the disclosure. Making the disclosure available so that consumers who are looking for the information might find it, doesn’t meet the clear and conspicuous standard. Advertisers are responsible for ensuring that disclosures are communicated effectively so that consumers are likely to notice and understand them.

There is no set formula for a clear and conspicuous disclosure. Some disclosures are quite short, while others are more detailed. Some ads use only text, while others use graphics, video and audio. Advertisers have the flexibility to be creative in designing their ads, so long as necessary disclosures are communicated effectively and the overall message conveyed to consumers is not misleading.

Proximity and Placement
The FTC believes that a key to making effective disclosures is the proximity and placement of the disclosure on the website. A disclosure is more effective if it is placed near the claim it qualifies or other relevant information. Proximity increases the likelihood that consumers will see the disclosure and relate it to the relevant claim or product. For print ads, an advertiser might measure proximity in terms of whether the disclosure is placed adjacent to the claim, or whether it is separated from the claim by text or graphics. The same approach can be used for Internet ads. Web sites, however, are interactive and have a certain three dimensional quality, with multiple pages linked together, pop-up screens, and ads that appear, disappear and move. This three dimensional quality will affect how proximity is evaluated.

a. Evaluating Proximity in the Context of a Web Page

Some disclosures must be made when an ad contains certain claims (referred to by the FTC as a "triggering claim"). On a Web page, the disclosure is more likely to be effective if consumer views the claim and disclosure together, on the same screen. It is more likely that consumers will notice it if it is placed next to the product, or service to which it relates.

In some circumstances, it may not be possible to place disclosure on the "same screen" as the claim to which it relates. Some disclosures are long and would be difficult to place next to the claims they qualify. In addition, computers and other "information utilities" have varying screen sizes, each of which display Web sites differently. Consumers may need to scroll "down" the screen to view a disclosure. If scrolling is necessary, advertisers should consider whether consumers are likely to do so.

In these circumstances, advertisers are advised to use text or visual cues to encourage consumers to scroll to the disclosure. Text prompts can indicate that important information is available. The text prompt should be tied to the disclosure to which it refers. Be alert, because general or vague statements, such as "see below for details," provide no indication about the subject matter or importance of the information and are not adequate cues.

The visual design of the page also could help alert consumers. For example, text that clearly continues below the screen, whether spread over an entire page or in a column, would indicate that the reader needs to scroll for additional information. Advertisers should consider how the Web page is displayed by the default Web browser setting for which the ad is designed, as well as for different display options.

The FTC takes the position that a scroll bar on the side of a computer screen, without more, is not a sufficiently effective visual cue that there is a disclosure below. Although the scroll bar may indicate to more computer savvy consumers that there is more below, many consumers may not notice the scroll bar or be aware of its significance. In fact, some consumers access the Internet with devices that don’t display a scroll bar.

Avoid Web page formats that discourage scrolling.
The design of some pages might indicate that there is no more information on the page and no need to continue scrolling. If the text ends before the bottom of the screen or readers see several inches of blank space, chances are they will stop scrolling and miss the disclosure. In addition, if there is a lot of unrelated information, either text or graphics, separating a claim and a disclosure, even a consumer who is prompted to scroll might miss the disclosure or not relate it to a distant claim they’ve already read.

b. Hyperlinking to a Disclosure

With hyperlinks, disclosures might be placed on a separate web page from the relevant claim. The FTC believes that disclosures that are an integral part of a claim or inseparable from it, must be placed on the same page, immediately next to the claim. In these situations, the claim and the disclosure should be read at the same time, without referring the consumer somewhere else to obtain the disclosure. This is particularly true for cost information or certain health and safety disclosures. For example, if the total cost of a product is advertised on one page, but there are significant additional fees that the consumer would not expect to be charged, the existence of those additional fees should be disclosed on the same page and immediately adjacent to the total cost claim. However, a disclosure accessible by a hyperlink may be sufficiently proximate to the relevant claim. Again, the issue is placement. A link to a disclosure may be almost "seamless" and thus could be adequate, depending on the nature of what is disclosed. Hyperlinked disclosures may also be particularly useful if the disclosure is lengthy or if it needs to be repeated (because of multiple triggers, for example). The key considerations for effective hyperlinks are:

• the labeling or description of the hyperlink,
• the consistency in the use of hyperlink styles,
• the link's placement and prominence on the Web page, and
• the handling of the disclosure on the click-through page.

A hyperlink that leads to a disclosure should be labeled clearly and conspicuously. The hyperlink’s label (the text or graphic assigned to it) affects whether consumers actually click on it and see and read the disclosure.

• Make it obvious. Consumers should be able to tell that they can click on a hyperlink to get more information.
• Label the link to convey the importance, nature and relevance of the information. The hyperlink should give consumers a reason to click on it. That is, the label should make clear that the link is related to a particular advertising claim or product and indicate the nature of the information to be found by clicking on it.
• Hyperlinking a word or phrase in the claim may not be effective. In most cases, simply hyperlinking a single word or phrase in the text of an ad may not be effective. Although some consumers may understand that there is additional information available, they may have different ideas about the nature of the information and its significance. The same may be true of hyperlinks that simply say "disclaimer," "more information," "details," or "terms and conditions."
• Don’t be subtle. Asterisks or other symbols by themselves may not be effective. Typically, they provide no clues about why the claim is qualified or the nature of the disclosure. In fact, consumers may view an asterisk or another symbol as just another graphic on the page. Even if a Web site explains that a particular symbol is a hyperlink to important information, consumers might miss the explanation, depending on where they enter the site and how they navigate through it.

Using hyperlink styles consistently allows consumers to know when a link is available. Although the text or graphics used to signal a hyperlink may differ among Web sites, treating hyperlinks inconsistently within a single site can increase the chances that consumers will not notice—or click on—a disclosure hyperlink. For example, if hyperlinks usually are underlined in a site, chances are consumers wouldn’t recognize italicized text as being a link, and could miss the disclosure.

The page which the hyperlink leads to must contain the complete disclosure. The disclosure must be displayed prominently. Distracting visual factors, extraneous information, and many extraneous links offering "click-away" opportunities to go elsewhere, before viewing the disclosure, can obscure an otherwise adequate disclaimer.

• Get consumers to the message quickly. The hyperlink should take consumers directly to the disclosure. They shouldn’t have to search a click-through page or go to other pages for the information.
• Assessing the effectiveness of a hyperlink disclosure is important. Tools are available to allow advertisers to evaluate the effectiveness of disclosures through hyperlinks. Advertisers also can evaluate the amount of time visitors spend on a certain page, which may indicate whether consumers are reading the disclosure.
• Don’t ignore the data. If hyperlinks are not followed, another method of conveying the required information would be necessary.

c. Using High Tech Methods For Proximity and Placement

Disclosures may be displayed on Web sites in many ways. A disclosure may be placed in a frame that remains constant, even as the consumer scrolls down the page or navigates through another part of the site. A disclosure might also be displayed in a window that pops-up or on interstitial pages that appear while another Web page is loading. New techniques for displaying information are being unveiled all the time.

Don’t ignore technological limitations. A scrolling marquee - information that scrolls through a box on a Web site - may display differently depending on the type of browser a consumer uses. Similarly, some browsers or other information utilities may not support or display frames properly, so a disclosure placed in one portion of the frame may not be viewable. Certain Internet tools may overcome this limitation by determining if a consumer’s Web browser can view frames and if not, serving a page that is formatted differently. Without such tools, advertisers should be concerned about whether a required disclosure will appear and if it won’t, they should choose different ways to communicate the disclosure.

• Recognize and respond to characteristics of each technique. Some consumers may miss information presented in a pop-up window or on an interstitial page if the window or page disappears and they are unable or unaware of how to access it. Others may inadvertently minimize a pop-up screen by clicking on the main page and may not know how to make the pop-up screen reappear. There are affirmative ways around these drawbacks, such as requiring the consumer to take some a particular action to proceed past the pop-up or interstitial (for example, by clicking on a "continue" button).

d. Displaying Disclosures Prior to Purchase

Disclosures must be effectively communicated to consumers before they make a purchase or incur a financial obligation. Disclosures are more likely to be effective if they are provided in the context of the ad, when the consumer is considering the purchase. Where advertising and selling are combined on a Web site, disclosures should be provided before the consumer makes the decision to buy; before clicking on an "order now" button or a link that says "add to shopping cart."

• Don’t focus only on the order page. Some disclosures must be made in connection with a particular claim or product. Consumers probably will not relate a disclosure on the order page to information they viewed many pages earlier. It also is possible that after surfing a company’s Web site, some consumers may decide to purchase the product from the company’s "bricks and mortar" store. Those consumers would then miss any disclosures placed on the ordering page.

e. Evaluating Proximity With Banner Ads

Most banner ads displayed today are teasers. Because of their small size, they generally do not provide complete information about a product or service. Instead, consumers must click through to the Web site to get more information and learn the terms of an offer. In some instances, a banner may contain a claim that requires qualification.

• Disclose required information in the banner itself or clearly and conspicuously on the Web site it links to. In some cases, a required disclosure can be incorporated into a banner ad easily. Because of the space constraints of banner ads, other disclosures may be too detailed to be disclosed effectively in the banner. In some instances, these disclosures may be communicated effectively to consumers if they are made clearly and conspicuously on the Web site the banner links to and while consumers are deciding whether to buy a product or service. In determining whether the disclosure should be placed in the banner itself or on the Web site the banner links to, advertisers should consider how important the information is to prevent deception, how much information needs to be disclosed, the burden of disclosing it in the banner ad, how much information the consumer may absorb from the ad, and how effective the disclosure would be if it was made on the Web site.
• Use creativity to incorporate or flag required information. Scrolling text or rotating panels in a banner can present an abbreviated version of a required disclosure that indicates that there is additional important information and a more complete disclosure available on the click-through page. With lengthier disclosures, the banner can direct consumers to the Web site for more information. The full disclosure then must be clearly and conspicuously displayed on the Web site.
• Provide any required disclosures in interactive banners. Some banner ads allow consumers to interact within the banner, so that they may conduct a transaction without clicking through to a Web site. If consumers can get complete information about a product or make a purchase within an interactive banner, all required disclosures should be included in the banner.

All in all, while the FTC policies claim to be aimed at protecting the average consumer, the FTC seems to base its policies regarding Internet advertising on how the ads would effect the least "computer savvy" consumers, rather than the average computer user/web surfer. In creating and placing advertisements and disclosures on the Web, these issues should be carefully considered and discussed with legal counsel.

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