Advertising Law 101; Consider Federal and Local Advertising Laws

Advertising is an essential part to any small business. Confined by small budgets and limited resources, advertisements must give you a good bang for your buck. However, small business owners need to remember that there are some important regulations that the advertisements need to follow.

Business.gov and the Bureau of Consumer Protection under the Federal Trade Commission (FTC) have many resources to help small business navigate through the laws and regulations related to advertising. Additionally, every state has consumer protection laws that govern ads running in that state. Before running an advertisement, check with your stat;s regulations.

The first thing to remember for all advertisements is to comply with the Federal Trade Commission Act:

• Advertising must be truthful and non-deceptive;
• Advertisers must have evidence to back up their claims; and
• Advertisements cannot be unfair.

Next, confirm that you are not violating state and local truth-in-advertising laws. The Consumer Action Handbook provides links to state and local agencies responsible for enforcing truth-in-advertising and related consumer protection laws.

Audience

• Advertising to Children

  There are specific laws that protect children. A portion of the Division of Advertising Practices are dedicated to monitoring and stopping fraudulent alcohol, tobacco, violent entertainment, and food advertising practices that target children. Because the FTC recognizes the increased susceptibility of the child audience, it also protects children from unfair and deceptive marketing practices in general industries such as with toys. For details on how to advertise your product appropriately to children, read:

  • Marketing to Children: Where is the Line and Who Enforces It?
  • How to Comply with the Childre-s Online Privacy Protection Rule
• Green Consumers

  As your market becomes more competitive, taking the green approach may give you an edge on your competitors. Start your green marketing campaign by ensuring your green claims are credible. Do this by having your product certified that it was produced in an environmentally sound manner. Many different organizations can certify your product as green depending on your product. Check out the Green Marketing Guide for more information.

Topics

• Labeling

  If you make claims that your product contains (or does not contain) certain ingredients or is made in the USA, it needs to be properly labeled. The label can easily be overlooked, but there can be fines if not followed correctly. As food labeling and nutrition become increasingly popular national topics, and there may be new initiatives to consider in the future. Research guidance from the Food and Drug Administration and the FTC, two agencies that oversee labeling compliance, to stay up-to-date on requirements:

  • FDA Labeling & Nutrition Section
  • The Fair Packaging and Labeling Act
  • Nutritional Disclosure Requirements- FDA Guidance Offers Food Providers Chance to Weigh In
  • Made in the USA Claims
• Specific Products

  Business.go's Advertising Law Guide provides information for retailers and manufacturers on a variety of specific products - from health and fitness products to food to real estate - and topic areas, including online advertising and green marketing. Below are some key topic areas that you should familiarize yourself with as a small business advertiser. For a detailed outline of topics, see the Advertising Law Guide.

• Delivery

  If you operate an online store or if your business plans to expand into an online store, you will need to comply with the Mail or Telephone Order Merchandise Trade Regulation Rule. Enacted by the FTC, this rule establishes protection for both the seller and consumer when it comes to selling goods remotely. For more information on this rule, see a Quick Guide to FT's Mail or Telephone Order Merchandise Rule.

Methods

• Online Advertising

  Due to the low cost, online advertising is widely used by small businesses. Emails can be an effective way to get your message of new products or services out to your customers. To combat the increasing cost of catalogs and postage, getting your custome's or potential custome's email has become ever more important. The CAN-SPAM Act protects the consumers for unwanted emails. Before starting an email campaign, read up on what rules you need to follow. Most reputable retail email services comply with the CAN-SPAM Act.

  Blogging has also become a popular means to advertise. Having bloggers talk about your products or services and link to them, your business can grow outward in to the depths of the internet. There are new rules requiring bloggers to state they were paid or given items for the endorsement.

  • Online Advertising Law Section on Business.gov
  • CAN-SPAM Act: A Compliance Guide for Business
  • Bloggers and Social Media Users Must Disclose Freebies, Comps, and Paid Endorsements Under New FTC Rules
• Telemarketing

  Telemarketing has undergone some changes in the recent years. Most business have heard of the but the FTC also has prohibited the use of pre-recorded calls. Your business cannot use'robocall' which you have written permission from consumers indicated they are willing to receive the calls. There are a few exceptions, but if your business wants to explore the telemarketing route, make sure you read New Rule Bans Telemarketers/Sellers from Pre-Recording Calls to Consumers.

• Promotions

  Small business owners are getting more creative on how to advertise their business. Sweepstakes, contests, and giveaways are some creative methods that have become increasingly popular among businesses, as the Federal Trade Commission estimates that more than half of all American adults entered sweepstakes within the past year. There are specific rules that need to be followed in order to have a legitimate promotion. Read more on How to Use Contests, Sweepstakes, and Giveaways as Marketing Tools.

If you have additional questions about advertising feel free to post them on the discussion boards for community members to answer.

Related Resources:

• Advertising FAQ's: A Guide for Small Business - a set of FAQs from the Bureau of Consumer Protection
• Advertising Law Section on Business.gov - advertising law resources related to small business owners