The legal landscape is continually evolving when it comes to the ad industry. Advertisers should pay close attention to these four trends to guard against running afoul of the law and being subjected to fines and lawsuits.
The U.S. Supreme Court and the Federal Trade Commission (FTC) addressed several issues in 2014 that could impact common advertising practices.
The following four legal trends are ones that advertisers should be aware of to ensure that they’re not running afoul of the law and exposing themselves to fines or lawsuits:
PRIVACY AND DATA SECURITY
As personal information becomes more widely available, high-profile data breaches against companies such as Target have given consumers cause for concern about how their information is collected, stored, and used.
The FTC and state attorneys general are taking a close look at privacy and data security, even as a pending Court of Appeals case addresses whether the FTC actually has the authority to regulate data security. Consumers are also joining in to sue companies over how they secure data and use it for marketing purposes.
ONLINE CONTESTS AND PROMOTIONS
The practice of having consumers “like” a page in order to enter a contest or gain access to content such as a song has been a popular practice for the past several years. Facebook, however, has changed its policy to prohibit “like-gating.”
In addition, social media promotions on sites such as Pinterest can sometimes create potential problems with product endorsement laws. For example, a Cole Haan contest asked participants to create a Pinterest board showing their favorite shoes from the brand as well as their favorite travel destinations. The FTC said the entries were essentially a product endorsement, which have specific disclosure requirements.
NATIVE ADVERTISEMENTS
Native advertising is marketing material that’s designed to look like the editorial content on its host website. The FTC thinks this may sometimes deceive the consumer, making it difficult to differentiate between true editorial content and content designed to sell something. The agency is concerned that the ads are deceptive, which means that it misleads not necessarily the majority of consumers, but 10 to 15 percent of them, according to Mary Engle, the FTC’s associate director of advertising practices.
She specifically mentioned content that’s created by the publisher, including sites such as BuzzFeed and Gawker. The issue lies in the way native advertising is displayed and labeled, and tiny font indicating that the content is “sponsored” won’t be enough.
CELEBRITY ENDORSEMENTS
Celebrity endorsements are nothing new, but social media has expanded how these ads can and should be used. For example, many companies compensate celebrities in exchange for positive social media posts about their brands, but these relationships should be disclosed.
Companies should also be cautious about posting a photo of a celebrity using their brand unless they have permission. Even a single unauthorized post could cause legal problems.
