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FTC AI Fine Revolution

Posted on September 6, 2023 by Allyn

FTC Fine Revolution: AI, Ads & The FTC…Your All-Inclusive Guide to Staying Compliant in the Digital Age!Presented By:Thursday, September 14, 20233:00 PM ETSummaryIs your business navigating the wild waters of the digital landscape?With ever-evolving FTC regulations and the booming integration …

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Posted on August 23, 2023 by Allyn

%FIRSTNAME%, your video will expire in: Get Started Now FTC Fine Revolution: AI, Ad Claims, and Game-Changing Fines. What You Must Know To Navigate the Risks.Is Your Business at Risk? FTC’s New Game Changers Are Here, and Ignorance Isn’t an …

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Review 2 Infographics: 3 Triggers of Ultra-High Marketing Risk Plus Open Q&A

Posted on August 22, 2023 by Allyn

#1: Ad Claim “Granularity”#2: FTC Rulemaking#3: ChatGPT & Generative AIOpen Q&A: Chip & Allyn will entertain questions on any topic Documents3 Triggers Infographic Diagram3 Triggers InfographicFTC Golden Rule Infographic

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Thermonuclear War on Subscriptions: FTC v. Amazon Prime

Posted on August 8, 2023 by Allyn

FTC allegations: Prime signup process.FTC allegations: Prime cancellation process.Does the FTC have a strong case?What does this litigation mean for all subscription marketers?Open Q&A: Chip & Allyn will entertain questions on any topic DocumentsFTC Takes Action Against Amazon Prime 6-21-23

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Thank You

Posted on August 7, 2023 by Allyn

You’re Registered! Make sure you check your inbox. You should receive an email from Support@FTCGuardian.com shortly confirming your registration for your webinar. Continue to FTC Guardian

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Replay

Posted on August 6, 2023 by Allyn

%FIRSTNAME%, your replay will expire in: Get Started Now FTC Fine Revolution: AI, Ad Claims, and Game-Changing Fines. What You Must Know To Navigate the Risks.Is Your Business at Risk? FTC’s New Game Changers Are Here, and Ignorance Isn’t an …

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FTC Fine Revolution (Main)

Posted on August 6, 2023 by Allyn

FTC Fine Revolution: AI, Ad Claims, and Game-Changing Fines…What You Must Know To Navigate the Risks!Presented By:On Demand WebinarSummaryIs Your Business at Risk? FTC’s New Game Changers Are Here, and Ignorance Isn’t an Option.Marketing in today’s digital landscape is like sailing …

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Home – 2023

Posted on July 29, 2023 by Allyn

#1 in FTC Compliance CoachingLegal Protection For Your Online BusinessThe Internet’s Most Advanced ‘Next Generation’ Online Compliance & SaaS Document Generation Platform, Plus Easy-To-Understand Rules of The Road And Strategies! FTC Fires Warning Shot to Marketers Who Use ChatGPT forDigital …

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The FTC Takes Its First Shot With Concerns for Marketers Regarding ChatGPT

Posted on July 25, 2023 by Allyn

Discover…What is the FTC’s overall concern with marketers’ use of ChatGPT & generative AI?What are the FTC’s concerns regarding AI with chatbots and advertising with AIWhat are the FTC’s fundamental rights of consumers regarding marketing with AIOpen Q&A: Chip & …

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Q&A – The FTC Sues Amazon Over Its Prime Subscription

Posted on July 11, 2023 by Allyn

What are the FTC’s Claims against Amazon?What is going on behind the scenes with the Amazon case?How is the California Auto-Renew Law more consumer-friendly that the FTC approach?Open Q&A: Chip & Allyn will entertain questions on any topic DocumentsFTC Blog …

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FTC: These Rights are “Fundamental”

1. The right to know they're being advertised to: "It should always be clear that an ad is an ad."

2. The right to know whether search results or any generative AI output is “organic... or is paid.”

3. The right to know if an AI product’s response is “steering them to a particular website, service provider, or product because of a commercial relationship.

4. The right to know whether they are "communicating with a real person or a machine."

3 Steps You Need to Follow

Step 1: Consider the Product (and the Type of Ad Claim)

Certain products are subject to specific regulations such as food and dietary supplements.

In addition, there are specific types of claims that require specific types of substantiation, such as comparative and typicality claims.

Step 2: Examine All That the Advertising Conveys to Reasonable Consumers (to Determine “Net Impression”)

Net impression is what reasonable consumers infer from and advertising claim, not what the marketer intends to imply from the claim.

Another way to view net impression is that it’s the takeaway that reasonable consumers interpret from an advertising claim.

Step 3: Determine the Appropriate Level of Substantiation (“Reasonable Basis)

The FTC requires that marketers have a “reasonable basis” to support advertising claims before publication.

6 Elements of Net Impression

Net impression is the overall advertising message/takeaway understood by reasonable consumers, not what the advertiser intends the message to be.

These elements are what you need to evaluate to determine the overall net impression of your ad.

Express statements (Express Claim)
Implied suggestions (Implied Claim)
Related Context
Name of Product
Qualification words or phrases
Disclosures/Disclaimers for “triggering claims

Are Comparative Ad Claims Legal?

Digital marketers often seek to position their products against a competitor’s products.

These claims are known as comparative claims because they claim either that the advertisers’ products are at least as good as a competitor’s products (parity), or even that they are better than a competitor’s products (superiority).

The FTC likes comparative claims, provided they don’t constitute false advertising (a violation of the federal Lanham Act).

According to the FTC: "Comparative advertising, when truthful and non-deceptive, is a source of important information to consumers and assists them in making rational purchase decisions. Comparative advertising encourages product improvement and innovation and can lead to lower prices in the marketplace."

FTC: Unqualified Advertising Claims are High Risk!

What are unqualified Ad Claims?

Very broad claims,
That don’t provide information for the basis of the claim.

Examples:
* "Big Benefit" Claims: "Make $10,000 1st month."
* "Pain Reduction" Claims: "Be debt-free in as little as 12 months.”

FTC’s guiding principle:

Marketers should substantiate all reasonable interpretations (Net Impression/Takeaway) of ad claims, OR
* Qualify the scope of ad claims to a more limited scope
which marketers can substantiate, AND/OR
* Disclose typical results (generally expected results)

FTC v. TEAMI

Do You Use Influencers on Social Media to Provide Credibility for Your Promotions?

Influencers are persons who have developed a significant following on social media platforms.

Deceptive practices by influencers on social media are a top-priority concern of the FTC.

The FTC's concern: consumers may be confused if an influencer recommends or even mentions a brand's product without disclosing that the influencer has a "material relationship" with the brand, including any financial, employment, personal or family relationship.

The FTC requires: (i) influencers to disclose to disclose "material relationships”, and (ii) brands to manage influencers regarding the disclosure requirements.

In November 2019, the FTC signaled its intention to increase enforcement of its Endorsement Guides regarding the deceptive use of influencers by announcing its intention to seek public comment for the purpose of adding new, stricter regulations.

In March 2020, the FTC and detox tea company Teami agreed to a settlement in the amount of $15.2 million for Teami’s use of Instagram influencers who failed to “adequately” disclose that Teami was paying for their endorsements.

If there is any doubt regarding the FTC's hyper concern regarding deceptive practices by influencers and the brands that use them, the comments by FTC Commissioner Rohit Chopra should provide a clear warning. Chopra's statements regarding current influencer deceptive practices: "launder(ing) advertising", "illegal payola", "polluting the digital economy", and "stop fraud from festering”.

COORS v. BUD

Do You Post Videos to Social Media Comparing Your Product to a Competitor's Product?

Comparative advertising is a marketing strategy in which a marketer's product is presented as equal to or superior when compared to a competitor's product. Comparative advertising often involves a side-by-side comparison of the two products.

Comparative advertising isn't used exclusively by big, Fortune 500 companies.

Internet startups often use comparative advertising blended with content marketing for successful "ninja” marketing campaigns. Consider the successful launch of Dollar Shave Club.

Probably the most famous comparative ad campaign is the

Bud Light campaign that appeared in the 2019 Super Bowl Ads.

Anheuser-Busch ran a commercial in which a large barrel of corn syrup is mistakenly delivered to the Bud Light castle. Because Bud Light doesn’t use corn syrup, the Bud Light King and a rag-tag group of knights delivered the barrel of corn syrup to the Coors Light castle, where a guard acknowledges that their beer is brewed with corn syrup.

Coors immediately filed a lawsuit under the Lanham Act, alleging that the commercial, and a series of other related ads, were misleading. The case was ultimately decided in the 7th Circuit Court of Appeals, with a ruling in Anheuser-Busch's favor.

The takeaway: before you start sneering at your competitors too much, consider the cost of defending an expensive lawsuit. Done right, comparative advertising is favored by the FTC because it provides meaningful information to consumers. Done wrong, comparative advertising can get you sued by an enraged competitor that may have significantly greater resources.

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