Advertising is vital to any company, no matter the industry or product. How you choose to market must be guided by relevant advertising and marketing laws, or your company may be subject to significant fines and other penalties. Complying with the guidelines and laws of the advertising field is often a part of compliance that companies forget or simply ignore with disastrous results, especially as regulations rapidly change in response to social media trends. A top Priori advertising and marketing lawyer can help you understand and navigate the regulatory landscape.
Truth in Advertising, Deceptive Advertising
Under truth-in-advertising laws, all claims made in ads and other marketing materials must be truthful, not misleading and backed by scientific evidence where possible and appropriate. This means that claims should be substantiated by research trials and surveys and generally be considered not misleading. This is especially true when a claim is based in objective facts or is in an area that would be difficult for the average consumer to assess on his or her own (such as engine performance or effectiveness against sun damage). False advertising claims can be used to pursue fraud charges—including criminal penalties.
In particular, the following areas of claim in advertising are given serious scrutiny for truth in advertising:
- Health Claims. Health claims on weight loss drugs, anti-aging products, supplements and other health-related products must be scientifically verified in some manner.
- Environmental Impact. Claims regarding the environmental impact or benefits of a product must be independently assessed. Also, there are specific threshold guidelines for such labels, such as the content of recycled material required for a product to be called “recycled.”
- Safety. Claims of safety must be verified and endorsed by authorities where appropriate.
- “Made in the USA.” There are specific industry guidelines that dictate of how much of a product must be created in the United States to qualify for such a label.
- Product Endorsements. These must be honest and independent or labeled otherwise. In the case of celebrity endorsements, the celebrity must actually use the product.
- Emotionally Trying Choices. Advertising for funeral homes, nursing homes and other emotionally-charged or trying choices is given extra scrutiny to ensure that it does not take advantage of the fragile emotional state of consumers.
FTC Compliance
The Federal Trade Commission (FTC) plays a significant role in regulating advertisements and marketing campaigns. That’s why it is vital for all marketing and advertising professionals to regularly check for their guidance and keep up-to-date on the FTC rules that merit careful compliance.
General Regulation
FTC general regulation must be followed no matter what industry you are advertising within. Almost all advertising and marketing laws are enforced by the FTC, including the truth-in-advertising guidelines. The FTC also dictates other advertising issues, including how you can label products, how you conduct telemarketing campaigns and even how and if products can be marketed to children.
FTC Industry Guidelines
Certain industries get additional scrutiny from the FTC on how products can be marketed, as well as the advertising claims permitted. These industry guides require additional compliance procedures to be put in place to ensure that your marketing does not step over the limits imposed, even if it would be allowed in similar markets or industries. The following industries current have special FTC regulations in place:
- Alcohol;
- Appliances;
- Automobiles
- Clothing and Textiles;
- Finance;
- Franchises, Business Opportunities and Investments;
- Funeral;
- Human Resources;
- Jewelry;
- Non-Profits;
- Real Estate and Mortgages; and
- Tobacco.
CAN-SPAM: Email Marketing
Email marketing is a vital way that marketers reach consumers today. That’s why compliance with SPAM laws has become of utmost importance for any marketers working today. You must make sure not to violate standards for whom you may market and how through email lists. There are also specific guidelines for list-sharing practices that have become common today. Running afoul of these guidelines can have serious long-term consequences, especially as rules become stricter—both here in the U.S. and abroad.
Fair Use in Advertising
When you are making ads, it is common to reference a competitor, even using some content of theirs for comparison. While this may require some use of their IP, it is generally allowed under fair use exceptions for commercial use—and even parody in some cases. Still, this exception is very limited, which means that you should consult an IP lawyer to get guidance on how much is too much.
Priori Pricing
Depending on your needs, the cost of hiring an advertising and marketing lawyer through Priori's marketplace will vary. Hourly rates for advertising and marketing lawyers typically range from $200 per hour to $500 per hour. In order to get a better sense of cost for your particular situation, put in a request to schedule a complimentary consultation and receive a free price quote from one of our lawyers.
FAQ
What kind of evidence must an ad have to back it up as “true”?
The FTC uses the "reasonable basis" standard to assess claims. A "reasonable basis" means objective evidence that supports the claim, such as surveys, expert opinion, tests, studies or other scientific evidence. The extent of what is a reasonable basis will depend on the type of claim; a claim like “people love the taste of our cereal” will require much less proof than “reduces wrinkles by up to 80%,” for example.