Last updated on 18 January 2021 by Nicholas Godwin (Legal writer at TermsFeed)
Advertising has been around for a long time. With the emergence of the internet and social media, advertising has become even more widespread and accessible.
Advertisements are still a standard in television today. However, it's changed drastically since 1941 when it all began. In 2016 alone, the market for TV ads stood at over $70 billion and is projected to grow to over $75 billion in 2021.
While that's impressive, even more advertising now happens online than on television.
Blogs and websites now carry advertisements. The definition of an ad is even different now. Some states in the US even consider a website to be an advertisement itself.
Online advertising is not limited to the giants, though.
Blogs and websites carry advertisements. Celebrities and influencers advertise with their social media pages. They reach millions of people with each post. The influence of social media on advertising is consistently increasing.
With the increase in advertising, there is a possibility of losing the 'Truth in Advertising.'
When someone is presented with an advertisement, the ad should be truthful and not misleading. This applies to all ads regardless of whether it's a radio, television or internet ad.
It's the job of the Federal Trade Commission in the US to make sure 'truth in advertising' laws are adhered to.
The standards are not different for traditional media or digital media.
The FTC insists on some requirements for ads:
The FTC focuses more on ads that affect consumers' health and their pocketbooks. Ads on food, drugs, dietary supplements and alcohol are put under considerable scrutiny.
Claims on high-tech products and the internet also receive significant attention.
Truth sometimes isn't black and white. An ad does not have to be untrue to be considered deceptive.
The FTC has provided a helpful Advertising FAQ that works as a guide for small businesses. Here's a summary of some of its key points regarding deceptive advertising.
According to the FTC, an ad is deceptive if it does one of the following:
If there is a chance your ad will leave an ordinary consumer with a false impression, then it is deceptive.
In 2017, Uber settled a false ad charge for $20 million. In a bid to attract drivers, Uber had exaggerated the earnings the drivers would make. This is considered to be a deceptive ad.
Moonlight Slumber, a company based in Illinois in the US, was charged with deceptive advertising in 2017. The company ran ads on its website that claimed its mattresses were organic. The FTC, however, found out that they made very little of the mattresses with any organic material.
The company also presented its products to have been certified by the 'Green Safety Shield'. It did not state, however, that the Shield was their designation. They created it and awarded it to their products.
An FTC inquiry follows these stages:
The FTC looks at both express and implied claims. An express claim is clearly stated in the ad.
'XYZ syrup prevents catching the flu.' This is an express claim. You know taking XYZ syrup will prevent catching the flu.
'XYZ' syrup kills germs that cause the flu.' This claim implies that XYZ syrup prevents the flu even though it is not clearly stated. A reasonable consumer will assume since it 'kills germs that cause the flu' it will prevent the flu.
Advertisers must have evidence to back up both their express and implied claims.
The FTC considers what the ad leaves unsaid. Meaning, it checks if there is any information left out that will misinform the consumer about the product.
For example, consider the case where Emergen-C needed to change its ads because it didn't inform people that too much Vitamin C can cause several side effects.
The law demands that advertisers have proof to substantiate their claims before they run ads with the claims. The FTC, therefore, checks to see if the advertisers have enough evidence to back up their claims.
Enough evidence, in this case, means as much proof as it claims to have in the ad. If for example, an ad says "two out of three people got instant results" you must have evidence of that happening.
If the numbers aren't that specific, experts will determine what enough evidence is.
Companies that post misleading ads will be penalized according to the degree of the violation.
Here are some penalties the FTC or courts can give to companies who engage in deceptive advertising:
The company will also have to send the FTC the evidence and substantiation it has for new ads.
A fine of $40,654 per day, per ad if they err again.
The FTC looks for general honesty and truth in all advertising, but it especially focuses on the following types of ads:
Subjective claims like 'XYZ cakes is delicious' don't receive much attention from the FTC. The consumers can judge those by themselves.
Running a blog or a website can be a great way to earn money doing something you love. Advertising is a popular and growing source of income for bloggers. You must, however, always disclose advertisements in an advertising disclaimer.
An advertising disclaimer is a statement informing consumers that you have been paid or given some form of compensation to promote a product.
An advertising disclaimer can also be a statement added to a claim, to help the consumer better understand the product and make an informed decision.
An advertising disclaimer is a statement that can protect you from liability. It's a warning to your website visitors that products advertised could harm them in specific ways and that you bear no liability if this occurs.
In short, any ad that is deceptive or a consumer can possibly misunderstand needs a disclaimer.
You can use disclaimers in different ways, depending on the nature of your blog or website. It also depends on the product you are advertising.
The Florida Fish and Wildlife Conservation website has an advertising disclaimer page.
The disclaimer explains to the reader that advertising on the website does not mean an endorsement. This has to be stated because consumers who see specific ads on the site may not understand that it is not paid for and not the express opinion of the FWC. Or that the products and services advertised are not necessarily endorsed or recommended by the FWC.
The American Speech-Language-Hearing Association (ASHA) discloses on its website that products sold in ads on the site have not been evaluated or endorsed by ASHA.
ASHA states that ads need to be backed by research and have evidence to substantiate their claims. However, it states that it only confirms that the study is relevant but does not prove the research.
This way, readers of ASHA know they can stake that trust on the reputation of the advertisers and not ASHA's.
Mommies of Miracles states in its advertising disclaimer that its not responsible or liable for the conduct or performance of the ads on its site.
The company also disclaims any responsibility for the quality of the products and services offered in those ads.
If your website provides ads for products and services, then you need one.
If advertisements running on your website can be considered deceptive, you especially need a disclaimer.
As said earlier, false advertising can lead to lawsuits filed against you. A disclaimer is a powerful, protective tool.
There are two major ways to know you need a disclaimer.
Your ad can still be deceptive without being an outright lie.
Advertisements that describe a customer's experience that may not be typical can be considered misleading.
The ad above, for example, shows a weight loss system and the results of one woman. Your ad will be deceptive without the disclaimer saying that the results shown are not typical. This means other users may not experience the exact results.
If your ad includes an actual number or figure that you cannot prove or have not proven yet, you need a disclaimer.
For example, saying a drug "will lead to the loss of 20 pounds" can be considered deceptive because there's no way you can prove that every person will lose 20 pounds. An ad promoting a refrigerator that will save you $20 in electricity costs without any actual proof of that is also misleading.
Please note that your website can be considered an ad, especially for lawyers and law firms. So you'd need an ad disclaimer. If you're in a highly regulated space you want to be sure of what's considered an "ad" in your industry. You can avoid a lot of stress by adding an ad disclaimer to your site.
There are several types of disclaimers you could use, but here are the four types most commonly used by websites.
Does your business provide legal advice? If so, here are a few disclaimers you need to have on your site.
For example, lawyers in New York are required to put 'Attorney Advertising' on the website's homepage.
While the FTC is responsible for the regulation of advertisement of over-the-counter drugs, the FDA is responsible for the advertisement of prescription drugs.
An ad that names a drug and its benefits is called a product claim ad. The FDA requires that such ads be truthful and use understandable language.
The FDA requires that every product claim advertisement contain 3 elements.
Both the benefits and the risks must be presented in a balanced, clear and conspicuous manner.
If the ad is written, which should include your website, you are required to add this statement:
"You are encouraged to report negative side effects of prescription drugs to the FDA. Visit MedWatch or call 1-800-FDA-1088."
You should inform readers of your website that you are only there for educational purposes. You should not replace medical advice from a qualified medical personnel with the advice on your website.
If your website is a professional blog that provides a professional service you need to tell your consumers your site is for information and does not substitute a real-life professional, and that you are not liable for any injury that occurs after following your advice.
If you're a lawyer or in the legal practice and use a website to get clients, you'd want to use an ad disclaimer like the one below.
An automotive engineer may explain on his website how to change the oil in your car but can't be responsible for you doing it wrong or damaging your vehicle.
How you write your advertising disclaimer will depend on the service you provide. There is no hard and fast rule, but these are some elements you should cover.
You state that you cannot be held responsible for any inaccuracies in ads on your website. You will therefore not be liable for any losses.
This means that you are not responsible for the comments that visitors to your site leave. You reserve the right to remove any comment you decide is offensive or misleading.
This is if you are not the only one who writes on your blog, you have guest writers. You state that you are responsible for the thoughts and opinions or recommendations of your contributors.
Like I pointed out earlier, here's a law firm's disclaimer below.
You say that you are not accountable for how content on your website translates into other languages.
You should consider essential factors outlined by the FTC when putting up your disclaimer on the site.
This article is not a substitute for professional legal advice. This article does not create an attorney-client relationship, nor is it a solicitation to offer legal advice.
18 January 2021