Yesterday, the FTC held a public workshop titled “In Short: Advertising & Privacy Disclosures in a Digital World.” The workshop explored whether and how the FTC should revise its 2000 guidance concerning advertising and privacy disclosures in the new era of online and mobile technology.
This post will highlight the morning workshop sessions on usability research, cross-platform advertising disclosures, and social media advertising disclosures. A second post will recap the afternoon’s discussions on mobile advertising and privacy disclosures.
Presentation on “Usability Research.” After introductory remarks by Commissioner Ohlhausen, Jennifer King, a Ph.D. candidate at the University of California-Berkeley, briefly presented on “usability research,” an emerging body of research that examines the qualitative aspects of what disclosures users read—and what they ignore—in the online space. One of the overarching findings she discussed is that Internet users are goal-oriented and will largely focus only on those items that are necessary for completing the task at hand. Building upon this principle, King proposed that relevant disclosures should be part of the user’s task flow (for example, built into the checkout process) for maximum visibility. King’s presentation can be viewed on her blog.
Panel 1: Universal and Cross-Platform Advertising Disclosures. After her presentation, King joined the first panel of the day on “Universal and Cross-Platform Advertising Disclosures,” at which moderator Michael Ostheimer asked questions aimed at determining whether — and how — the 2000 Dot Com Disclosures guidance should be updated. A large part of the discussion centered on the use of links to make disclosures in online advertisements and on e-commerce sites. Three of the panelists — Sally Greenberg, Executive Director of the National Consumers League, Paul Singer, Office of the Texas Attorney General, and King — questioned whether generic links (titled “Disclosure,” for example) are sufficient to put consumers on notice that important terms and conditions attach to the use or purchase of a product.
Other panelists more broadly questioned the utility of guidelines that focus on things like the use and formatting of hyperlinks and the design of banner ads. Comments from Linda Goldstein, Promotion Marketing Association, and Steve DelBianco, NetChoice, tended to suggest that the Dot Com Disclosures guidance is outdated and a more flexible approach is appropriate. Singer, however, championed the guidance’s focus on clarity and prominence, saying these are valuable principles for companies hoping to avoid regulatory scrutiny.
Panel 2: Social Media Advertising Disclosures. The second panel addressed “Social Media Advertising Disclosures.” The FTC’s blogger endorsement guidelines were discussed first, and the panelists were largely in agreement on Moderator Richard Cleland’s hypotheticals, concluding as a general matter that if a blogger receives an incentive to review or recommend a product, the blogger should disclose that connection at the same time and in the same space as the endorsement.
When the conversation turned to advertising disclosures on social media platforms like Twitter, the panelist views varied. A debated issue was how an endorser using Twitter should disclose an arrangement with a company within the platform’s space constraints. Robert Weissman, President of Public Citizen, said the use of the #spon hashtag — a convention in the Twitter sphere — was not enough, because average consumers do not understand its significance. Stacey Ferguson, a representative of the blogging community, agreed that a plain language approach is the solution, even at the cost of valuable real estate. But Malcolm Faulds, a member of the Word of Mouth Marketing Association (but speaking on behalf of BzzAgent, Inc.), disagreed, noting that WOMMA recommends the use of Twitter hashtags like #spon to its members.
Ferguson then suggested that the platform itself should be responsible for enabling users to make ad disclosures in a meaningful and clear way. For example, she noted that Twitter could change the color of tweets that featured advertising. Other panelists, however, disagreed. Susan Cooper, Advertising and Product Counsel at Facebook, pointed out the near-impossibility of the Facebook platform to distinguish when a user “likes” a product on her own, and when a user “likes” a product because she has an incentive to do so. Weissman echoed this sentiment, noting that the “duty lies with the advertiser, not with the platform.”
Although the discussion was based largely on hypotheticals, larger themes developed. Weissman took the position that advertising disclosure guidelines should not cater to the constraints of a specific platform. “Advertising has to adapt to the existing law, not the other way around,” he argued. Cooper, however, emphasized that social media advertising disclosures cannot be one-size-fits-all. “Social media is an umbrella term used broadly to identify several different types of platforms.” Cooper cautioned that despite the use of a single term to describe the platforms, “the way that users are consuming social media is very different.”
Susan Shook, counsel at Procter & Gamble, suggested that a more flexible approach to advertising disclosures be considered, one that would permit endorsements in an individual’s own words and would allow advertisers to transition easily to new media outlets.