Small Business Truth-in-Ads Tips

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By Ephrat Livni, Esq. on March 04, 2016 11:00 AM

You're bombarded with ads every day, so you know they can be annoying and even put you off a product entirely. Yet you too are in business and must promote, so you're tempted to create an ad campaign that makes claims you can't back with facts. Don't, and here's why.

The Federal Trade Commission (FTC) regulates advertising to ensure its truth. There are also state consumer protection laws that dictate what claims advertisers can make, as well as rules specific to certain media or industries. All regulators look at the whole of an ad, depending on where it is placed -- context, not just text. So let's explore the elusive concept of truth as broken down by the FTC.

What Is the Truth?

The truth is tricky business but the FTC has rules. An advertisement must make claims that would not deceive the reasonable consumer. Whether express or implied, whatever you say about your product must have a reasonable basis. Satisfied customer letters are not a reasonable basis for a health claim, say.

Failure to reveal a material fact is also deceptive. That's why all the prescription drug ads are saddled with long warnings about scary side effects. By law, the good, the bad, and the ugly must all be revealed for an ad to be keeping it real in the eyes of the FTC.

Context, not just text, is what matters when it comes to truth in ads. After all, a picture's worth a thousand words and the ad regulators understand this. The FTC explains, "Rather than focusing on certain words, the FTC looks at the ad in context -- words, phrases, and pictures -- to determine what it conveys to consumers."

3 Tips on Truth In Ads

So what do you do to ensure that you don't end up in trouble? Tell the truth. Err on the side of caution. Here are some tips.

  1. Put yourself in the consumer's shoes. You are also a consumer so consider it personally. Only say things in an advertisement that you would say to yourself or loved ones.
  2. Be cautiously creative. Do be amusing or clever but don't be too flip in your approach to advertising. You don't have to lie to get people to try your product. If you do, maybe it's time to sell something new.
  3. Talk straight. In a time when advertisements are inescapable online, when we drive, during entertainment, and snuck in through product placements, straight talk is appreciated. Play the long game. Protect yourself by being ethical.

Consult With Counsel

If you are considering an ad campaign and need a review of your claims in light of federal, state, and local laws, talk to a lawyer. Counsel can ensure you know all the requirements for your chosen medium and industry. Get guidance.

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