5 Digital Marketing Compliance Rules You Need to Know

Navigating the legal waters of digital advertising can be tricky. Nowadays compliance involves more than just getting a copyright, applying for a patent, or adhering to TCPA rules. How you share images and content can have costly legal ramifications, when not done by the book.

In 2015, the Consumer Financial Protection Bureau and FTC issued fines ranging from $134 million (for 2,000 to 10,000 complaints) to $758 million (10,000+ complaints). And you thought TCPA fines were hefty!

Don’t drain your bank account and damage your brand’s reputation over a careless mistake. Before you hit send or click share, make sure you’re following these compliance rules.

1. Disclosure of Material Relationships

There’s no such thing as ‘secret friends’ in business. Keeping material relationships on the downlow can come back to bite you, as Lord & Taylor learned the hard way.

Here, the retailer paid 50 fashion bloggers to post Instagram pics of themselves wearing a boho dress. Normally that wouldn’t be an issue, except the bloggers didn’t disclose that they were paid by Lord & Taylor to do so. The bloggers’ followers had no idea it was a paid influencer campaign. Uh-oh.

Lord & Taylor’s “crime” was deceiving their consumers into thinking the fashion bloggers genuinely loved the boho dress, which is considered a deceptive practice with the FTC.

Since then, the fashion bloggers’ Instagram posts have been updated to include a #ad to show that it’s a paid advertisement. But before that, there was no indication to the viewer that they were looking at sponsored content.

Lord & Taylor Dress
Source: Marketing Land

Considering that Gnack, a Texas-based startup, wants to help brands programmatically purchase user-generated content from Snapchat and Instagram influencers, it’s more important than ever for advertisers to make sure they provide proper disclosure to consumers.

Legal Tip: Working with influencers is great, but if they’re on your payroll make sure the relationship is transparent to your consumers.

2. Disclosure of Full Details

Telling only half the truth will always come back to haunt you. Be upfront from the start, and provide your consumers with full disclosure details of the offer.

Let’s say, you get an email offer for the new iPhone 7. For just $49.99 you can have the latest version with all the bells and whistles. Sounds like a great deal, right? Well, the email fails to mention that price is only good for a two-year contract. And that contract will cost you an additional $200 activation fee plus taxes.

But wait there’s more. The phone doesn’t come with a car charger, so you’ll have to purchase that, too, plus a screen protector, plus a case, and so on.

Advertisers who don’t provide the full details in the form of a disclaimer are deceiving the consumer. The Honest Co. knows this all too well. Consumers filed a $5 million lawsuit against them, claiming the company wasn’t being honest in its marketing.

Honest Co.
Source: Today

Legal Tip: Always provide consumers with the full details of an offer, whether it’s a disclaimer at the bottom of the email, or a link to the full offer.

3. Disclosure of Risks

Any product that poses a potential risk to a consumer, must clearly state the risks in all promotional materials including statements made by spokespersons. Last year, Duchesnay USA got into hot water with the FDA over a misleading social media tweet and Instagram pic made by company spokesperson Kim Kardashian.

Kardashian sent out a tweet singing the praises of the drug DICLEGIS, an anti-nausea medication, without mentioning the risks. Normally this wouldn’t be an issue if she wasn’t DICLEGIS’ spokesperson, and simply just sharing her opinion.

But here, she was making an unqualified claim. And as a spokesperson she had an obligation to fully disclose the risks of the product, not to be misleading.

Kim Kardashian Tweet
Source: Twitter

Legal Tip: If you’re going to use a celebrity to help promote your brand, make sure the celebrity knows how to accurately and fully present the materials including all associated risks.

4. The CAN-SPAM ACT

Did you know the CAN-SPAM Act does more than just regulate annoying spam emails? It sets stringent rules for commercial email, with tough penalties for violations (up to $16,000 worth). Not only can you not send emails through an open relay or harvested addressed, you also have to:

Follow Unsubscribe/Opt-Out Rules. Like TCPA, under the CAN-SPAM Act, consumers have the right to request businesses to stop emailing them. Your company emails should have a visible unsubscribe link or button. And not only must you honor opt-out requests, you need to do so promptly within 10 days. So don’t delay, give the people what they want.

Opt-Out Email

Have Your Subject Line Reflect the Content. Have you ever opened an email expecting a coupon to the Sunglass Hut only to realize you’ve been spammed by Viagra? Yeah, not cool.

Don’t use deceptive subject lines. If a consumer receives an email that says “10 Useful Ways to Clean Your House” and opens it to discover an ad for Life Alert, you just deceived that consumer. And if the content is for 18 and older (ahem Viagra), it needs to be labeled as adult.

Identify the Message as an Ad. Like with the disclosure of material relationships, make sure your email is clearly identifiable as an ad. Don’t let your consumer think they’re getting a personal email from Britney Spears, when really she’s hawking Cheetos and Virginia Slims.

Familiarize Yourself With Other Countries’ Compliance Rules. If you’re a global company, know the email compliance rules for the countries you do business with. For instance, Canada requires the recipient’s full permission to even send an initial email to them.

Legal Tip: Make sure your email subject lines reflect their content, offer an opt-out, and are clearly labeled sponsored content.

Copyright Fair Use should be familiar to all advertisers, but as more and more people share content online, how to provide attribution for content and images isn’t always so clear.

When using others’ video, images, and content, consider:

Consulting the Fair Use Index. Typically if content falls under Fair Use, it’s free game to use… within reason. If you’re not sure your content falls under Fair Use, consult the Fair Use Index. The Index contains court rulings on various fair use cases. Compare your situation to theirs and proceed accordingly.

Asking for Permission. While it’s common sense, you would be surprised how many people don’t stop and think, hey, I should email that person first to ask if I can use their image. The person may say yes, ask you to pay to use, or simply request attribution.

Using a Stock Photo Site. There are plenty of sites out there offering free and legal images for your content. Here, you can use photos, typically without attribution, because you have a paid subscription through a site like Thinkstock.

Be sure to always check the fine print though for other potential stipulations (e.g. Creative Commons requires you to provide attribution).

Taking Advantage of Twitter Embeds. Twitter users can republish another user’s photos so long as they use Twitter’s embed tool. Easy peasy, right?

Legal Tip: Cover your attribution bases by using paid stock sites, asking for permission, and consulting the Fair Use Index.