Advertising Law: Everything You Need to Know
Advertising law refers to laws covering how communicating information to the public is managed. This information relates specifically to products and services.3 min read
2. Who Governs Advertising Laws?
3. Advertising Law: Best Practices
Updated November 19, 2020:
Advertising law refers to laws covering how communicating information to the public is managed. This information relates specifically to products and services.
What Is Advertising Law?
Every day, people see countless varieties of advertising. This includes magazine ads, posters, billboards, and television commercials. These ads are designed to convince people to buy a product or service. Many people don't think about all of the laws and regulations that govern how companies legally advertise.
Advertising attorneys work behind the scenes to provide guidance to companies. They help ensure that businesses play by the rules so that they advertise ethically and legally. Advertising law is broad and fast-evolving. It involves managing business practices to avoid deceiving or misleading consumers and vetting claims about products.
The way products are promoted and the media used to convey advertisements change quickly. For example, advertising methods that barely existed just several years ago — such as social media, affiliate, and mobile marketing — are now among the biggest ways companies advertise.
In addition, the traditional role of an advertiser working with ad agencies has transformed into an industry that includes a multitude of intermediaries, all of whom can shape advertising decisions that create legal exposure. These intermediaries include the following:
- Affiliate marketers
- Payment processors
Advertising laws can have a major impact on various areas of a business's operations, such as:
- How a company conducts telemarketing and email campaigns
- How a company labels its products
- How to present claims the business makes about results on the environment or someone's health
Who Governs Advertising Laws?
The Federal Trade Commission's regulations apply to marketing and advertising strategies across different mediums. The regulations also apply to claims about a product's effectiveness and more general claims about the product.
Some principle concepts of marketing and advertising law include unfair trade practices and truth in advertising. These concepts regulate how companies present the benefits that their products offer the public. Examples of these concepts in action include:
- Violations of another entity's trademark
- Untrue representations about a product's environmental impact, such as falsely claiming it's made of recycled materials
- Prohibitions against outlandish health claims, such as a pill that makes a person beautiful and fit
Advertising Law: Best Practices
More and more, it's becoming clear that the “material connections” between a brand and its endorsers must be disclosed. These connections sometimes arise in surprising places, including social media.
It's the advertiser's responsibility to disclose endorsements, which is something that advertisers and marketers should be aware of. Businesses should thus provide the right training to their endorsers.
Following are some key tips for managing your “material connection” disclosure requirements.
First, know what an endorsement is. Endorsers don't have to use explicit words of approval to endorse a product. Sometimes, simply using a product on social media channels indicates approval. Endorsements can show up in various communication channels, such as live communications, social media, print, online, television, and radio.
Second, take stock of how your business may be creating material connections. This can include:
- Paying a blogger or celebrity to promote your brand
- Giving discounts or free products to bloggers
- Paying your employees extra for posting positive messages about your brand on social media
- Offering marketing affiliates an incentive program
Third, have an endorsement policy in place and customize it for your company. A good endorsement policy gives examples of acceptable disclosures and informs endorsers that they have a responsibility to disclose their relationship with you.
Fourth, make your disclosures obvious. This is a requirement of the FTC. Disclosures should be easy to read and visible. They should be somewhere near the endorsement. Online comment boards and blogs may use a simple statement like, “Sponsored by XYZ Company.” In limited-space settings, the terms “sponsored” or “ad” may suffice. It's not enough to simply link to disclosures.
Finally, monitor your endorsers to ensure they're making sufficient disclosures and not misrepresenting your products. You should immediately communicate with any endorsers who engage in questionable practices.
Advertising law, like other legal arenas, is a complex field. Major corporations undoubtedly consult with advertising law professionals before placing ads, but it can be just as important for small businesses to hire attorneys well-versed in this field if they have plans to market themselves.
If you need help with advertising law, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.