FTC Releases Report on Proper Use of Big Data

“Big Data” is a buzz word that is tossed around a lot today and is typically used to talk about the collection of large amounts of data, typically from multiple sources.  That data is then used to make predictions, connections and assumptions that can be used to benefit your business.  The data that is collected is typically analyzed using complex algorithms that will produce usable information for marketing and other business efforts.

While big data can certainly be useful, the FTC has some concerns.  They have recently released a report that discusses how big data can and should be used.  Their main concern seems to be that some companies end up using this data in discriminatory ways that may not be legal.

Their report, titled, “Big Data: A Tool for Inclusion or Exclusion?” was made as a recap and review of a public meeting they held back in 2014 to discuss and learn about potential issues related to big data.

In the report they discuss legal compliance issues including how big data can impact the Fair Credit Reporting Act, Equal Opportunity Laws and the Federal Trade Commission Act.  It also looks at a variety of policy considerations that companies should look into when analyzing how they use big data.  This could include things like determining whether or not there are missing sets of information that could cause them to misuse the data, reviewing the data, including humans in the process of analyzing the data and much more.

This report was released for people in all types of businesses, but those who engage in digital marketing of any type are some of the biggest consumers of big data.  With that in mind, it makes sense to take a look at the report and see what types of things the FTC is going to be watching out for in the future.

You can view the entire report from the FTC HERE.

Native Advertising Guidelines Released from the FTC

Using native advertising practices has been one of the most effective options for marketers for quite some time now.  The reason they are so effective, of course, is because they look and feel very similar to the rest of the content on the page.  Even if consumers can see that it is a sponsored post, the content has the same feel as the rest so they naturally seem to trust it more.

Unfortunately, many marketers don’t go far enough in ensuring that the visitors to their page can easily see whether they are reading a normal post or it is an advertisement.  This is where violations to laws and regulations can come into play.  Unless you have an attorney to review every native ad you post, however, it can be hard to determine whether you are in compliance with laws or not.

To help address this concern, the FTC has just released a new guide called, “Native Advertising: A Guide for Business” that will go through this potentially complex form of advertising to help marketers learn what they can and can not do.  According to the FTC this report was designed to, “help companies understand, and comply with, the policy statement in the context of native advertising.”

Any marketers who are using native advertising will want to go through this report to learn whether or not they may be in violation of any laws.  It is written in an easy to follow format that will allow you to quickly gain the information you need without having to waste hours of time (or hire an attorney) trying to figure it out.

Director of the Bureau Consumer Protection, Jessica Rich, said of this report, “The FTC’s policy applies time-tested truth-in-advertising principles to modern media.  People browsing the web, using social media, or watching videos have a right to know if they’re seeing editorial content or an ad.”  This set of guidelines will help make marketing using native ads much easier and less risky.

If you are a marketer who uses, or is thinking about using, native advertising make sure you take some time to read through this new set of guidelines.  It can be found on the FTC’s site HERE.

One more thing to keep in mind is that if the FTC has taken the time to put together this set of guidelines to help marketers, you can be confident that they will be taking a closer look at digital marketing practices in this area in the coming months.  Marketers who continue to violate their set of standards will likely face fines of some sort.  The publishing of this from the FTC may be a signal that they will be taking greater enforcement efforts against violations related to native advertising in the near future.

FTC Reps Interviewed at BlackHat Conferences

If you happened to be at the Black Hat DefCON conference this week in Las Vegas, you might have been surprised to see two major players from the Federal Trade Commission hanging around.  Don’t worry though, they aren’t looking to bust anyone (not today anyway).  FTC Commissioner Terrell McSweeny and Chief Technologist Ashkan Soltani were there seeking the help of some of the world’s best hackers and security researchers who would be in attendance.

The FTC is well aware of the fact that it is virtually impossible to stay ahead of the game when it comes to the complicated digital world, which is why they regularly reach out to outside people to get valuable insights.  While at the conference, McSweeny did an interview with The Washington Post and provided some valuable insights about the FTC and how they interact with the digital world (including digital marketing). Below are some of the most essential points from the interview.  To see the full interview, follow the link at the end of this post to visit the Washington Post page where it was published.

When asked specifically why the FTC was at the event he replied saying, “We’re also here talking to the security researcher community because the FTC is really on the front lines of trying to protect consumers’ data security and privacy – and we find it incredibly beneficial to have direct communication with the folks in this community who help us understand how technology is working and how it’s impacting people.”

Another question asked was about whether or not the FTC is planning on doing additional enforcement in the tech space.  To this McSweeny replied saying, “I don’t know that I would characterize it as more enforcement so much I would say we’re going to continue to protect consumers wherever they are.  And we’ve made this massive transition to the mobile ecosystem.  Even 10 years ago, people really didn’t have apps or smartphones and now we have advertising cases involving the marketing of apps and we have mobile payment systems that are we’re looking at very carefully.  We try to adapt to protect consumers.”

When asked about what he was learning about cyber security and the community’s view of the FTC he talked about the fact that it is an ongoing relationship.  The FTC is regularly attempting to engage with the hacker/cyber security community.   He mentioned that, “…we share a very similar inclination, at least in the White Hat context here, to protect consumers and make sure that as customers are using more and more technology – which is terrific, we love that it can improve consumers lives – that they’re getting correct information about how their information is being used and how it’s secured.”

All in all the interview was quite informative and well worth the read for anyone working with digital marketing, cyber security or online in general.  Keeping up to date with what the FTC is doing is always going to be beneficial to your business since they have the potential to play such an important role in it.

You can read the full interview HERE.

Valuable Workshop on Lead Generation Coming from the FTC

If you are in the business of online lead generation, you know (or at least you should know) how important it is to remain in compliance with the many rules and regulation put forth by the FTC.  If you step outside of what they consider unfair or deceptive practices, you could be facing significant fines or other penalties that can quickly shut down your business.

Fortunately, the FTC isn’t just here to cause your business problems.  They are also willing to help you to learn how to avoid issues and even generate more leads.  This is what they will be doing at an upcoming workshop titled, “Follow the Lead: An FTC Workshop About Online Lead Generation.”   The workshop is scheduled to take place on October 30, 2015.

While the full lineup of topics to be covered has not yet been finalized, the FTC has released some valuable information about the types of things they will be discussing.  The topics include:

  • How Lead Generation Works – The FTC has confirmed they will talk about how online lead generation works throughout a variety of industries. They specifically mention consumer lending and education thus far, but other industries will likely be added.
  • Potential Lead Gen Legal Issues – They will cover what types of conduct could be in violation under the FTC Act’s regulations surrounding unfair and/or deceptive practices.
  • Best Practices – A list of industry best practices will be provided. This will likely include a variety of details on what has been proven effective, while still in line with the FTC regulations.
  • Consumer Protection – The FTC will cover a variety of ways that consumers can protect themselves in the online market place.

While the FTC has provided quite a bit of information so far, they are not yet done.  In fact, they have asked people from within the online lead generation industry to provide them with recommendations on different topics they should cover or research on this industry.  They are also looking for potential panelists to present during the workshop.  If you have any recommendations for the FTC, you can email them the information by August 25, 2015.  They can be reached at leadgen@ftc.gov.

The majority of online marketers use lead generation in one way or another.  Whether you seek leads from other marketers or you sell them to third parties, it is always important to get a good understanding of what you are doing and how you can stay in compliance with the FTC’s regulations.  If you are able to make it to this workshop it is sure to prove to be extremely valuable.

The workshop is free and open to the public so start looking into attending as soon as possible.

Tips on Avoiding FTC Actions from Former FTC Attorney William Rothbard

William Rothbard is a well-known former FTC attorney, and he recently presented at Affiliate Summit West.  During his presentation he provided a number of great tips on how to avoid FTC action.  As most marketers are aware, the FTC has been cracking down on a number of different companies over the past few months.  We’ve reported on several of them here, but there are others as well.  With that in mind, any tips you can get from a credible source like this should be most welcomed.

Deceptive or Unfair Advertising

One main topic he talked about was deceptive or unfair marketing practices, which are a big no-no for the FTC.  He talked about exactly what deceptive or unfair advertising consisted of, which is any type of advertising that has a significant chance to give the consumer the incorrect impression about the product or service being marketed.  He then went on to talk about what the FTC does when they find this type of advertising.  He mentioned things like cease and desist orders as well as ex parte orders, which causes the assets of a business (and possibly its owners) to be frozen while an investigation takes place.

Substantiation

He talked about the importance of substantiation in all marketing and advertising efforts.  This simply means that all objective claims must be able to be supported with reliable evidence.  This is especially important when making claims about the performance of a product, or how it can impact someone’s health.  Safety claims are also very important in this area.  Supporting your claims by, “competent and reliable scientific evidence,” is required.

Disclosures

Having a disclosure on your site or your advertisements it not usually enough.  Rothbard talked about how important it is to have ‘clear and conspicuous’ disclosures that are there to prevent ads from being misleading.  Any disclosures you have on your site need to not only be easy to see and featured in a prominent place on the site, but they also have to be written in easy-to-understand language.

Another important point about where disclosures must be located is that they should be near the item that they are about.  If you have a claim in the middle of your web page, the disclosure should be right next to it so it is clear that the two are associated.  He said that the FTC is beginning to regulate down to the color, font size and other items when it comes to ensuring the disclosures are clear enough to protect the consumers.

If you weren’t lucky enough to attend Affiliate Summit West, it is a good idea to think about how the FTC will be looking at your business.  IF there is any question about what your marketing is saying, the FTC may be concerned.  They can cause major problems for any business so make sure you fix your issues before they do.  Also, don’t make the mistake of thinking that your business is not big enough or important enough to be looked at by the FTC.  They review businesses of all types and sizes.

Significant Crackdown on Social Media Marking coming from FTC?

The FTC has recently made their first updates to their “What are People Asking” FAQ page in over five years.  These updates seem to be focused primarily on social media marketing.  If you use this type of marketing, it is important that you familiarize yourself with the updates so you can remain in compliance.

Federal Trade Commission Building in Washington, DC.

Federal Trade Commission Building in Washington, DC.

Many experts believe that this update could be serving as a ‘warning’ to marketers that they must get in compliance as they will be cracking down on violations in the near future.  Even though the FTC has long required companies to clearly identify any sponsored posts or paid advertisements from celebrities or other influential figures, many haven’t been doing it.  Even contests haven’t been clearly identified.  Both of these items have been updated in the FTC FAQ.

The marketing website MarketingLand.com has interviewed advertising attorney Allison Fitzpatrick about this new update, and they were able to get some very insightful information.  Fitzpatrick seems to believe that the FTC has updated the FAQ to ensure they have given proper guidance to marketers, and now they will begin to take violations much more seriously.

Hosting Contests or Sweepstakes?

If your brand holds any type of contest or sweepstakes through social media, a full disclosure must be made.  In addition to the disclosure, the rules must be very clearly laid out and linked to.  Using a hashtag such as #Contest or #sweepstakes is quickly becoming the standard.  Some companies try to just use a hashtag with the name of the contest or sweepstakes, but that is likely not going to be sufficient in the eyes of the FTC.  Whether your contest is large or small, it is a good idea to include a clear indication to keep your brand safe.

Facebook Likes?

Facebook likes are also going to be getting additional scrutiny from the FTC.  While it is impossible to disclose every time a celebrity or other important figure likes your page, the FTC is likely looking to crack down on any type of buying or selling of likes.  According to the interview of Fitzpatrick, “I wouldn’t be surprised if one of the next FTC actions is against fake likes.  It’s just so disingenuous what they do.  It’s so fraudulent and it really undermines the value of Facebook and the like button.”

Of course, there is no way to know for sure what the FTC will do in this area, but if you are in the business of buying or selling likes from people who have no actual interest in the brand or product they are liking, you may want to review the FTC regulations and your business practices.

Twitter Exemptions?  NOPE!

If you think you can run contests or have celebrity endorsements without a disclaimer on Twitter just because of the 140 character limitation, you’re wrong.  The FTC has been very clear that even on Twitter you must let people know when someone is being compensated for a post.  Using hashtags like #sponsored or #ad seems to be sufficient, at least for now.

Start Videos with Disclosure

Another thing the FTC will likely be looking at is video advertisements.  Some people who make videos, especially for video games and other digital content, like to ‘hide’ the disclosure away at the end of the video where many people won’t see it.  This is not acceptable.  Leading the video with a disclaimer is likely going to be required by the FTC, so keep this in mind when making any type of new video ads.

While some of this may seem like common sense, a surprising number of marketers are not in compliance at all.  With this latest update by the FTC, they can likely expect to see some enforcement steps taken in the near future.