What if you only had 1 hour to teach your employees about advertising laws?
I usually reserve at least 25% of the time for questions and conversation, so now you're down to 45 minutes.
Given the large number of advertising laws on the books, it's not immediately apparent which topics corporate counsel should include in their legal training presentation. Realistically, it might take 4-5 hours to give employees a presentation covering every advertising law. Obviously you're not going to get that much time.
As we've previously covered in the InHouseOwl Ultimate Guide on Antitrust Training, corporate counsel need to start with the basics. What do employees need to know? And when do they just need to spot a red flag and report back to legal?
In the antitrust training post, we discussed that corporate counsel need to focus on teaching employees to (1) spot red flags and (2) respond appropriately in risky situations. This concept similarly applies to advertising law, but certain employees will need to do more than just spotting red flags - I'm looking at you, marketing department.
Even though advertising concepts themselves may be easier to understand than antitrust, training employees on advertising law can be just as big of a challenge as advertising claim analysis is heavily fact-based. For this reasons, corporate counsel will need to emphasize the importance of collaboration between marketing content creators and the legal department.
Attempting to create legal training following these guidelines, I vetted a large number of resources to create the following Ultimate Guide. No doubt, there are areas of advertising law that affect companies differently and corporate counsel will need to adapt the guide accordingly.
Please note: I'm not going to go deep into each advertising concept. This is an advertising Training Guide - I'm going to give you the training structure, timing and the most important points you need for effective training. That said, I am going to link to resources to help you with the content.
Also please note: I am not going to go into specifics on industry-specific advertising laws created by the FCC, FDA, FDIC, FTC (telemarketing) and others. Additionally, in the interest of time, this training is not going to include contest and sweepstakes law or COPPA. Each could be a training session in itself if applicable to your company. Please click through on these links to the applicable industry advertising laws if applicable to your client.
Without further ado, here are the most important topics to focus on during advertising law training, presented in order.
1. Advertising laws are created to protect consumers
Because of this (no pun intended), it's important for corporate counsel to tell employees why advertising laws exist - namely, to protect consumers from misleading marketing claims and tactics.
Think about it. What if you bought a new laptop computer because your old one needed replacement? The company advertised that their new X1 laptop computer had an "extremely long-lasting" battery. How angry would you be if the computer only turned out to have a 1 hour battery life? (pretty angry I bet)
I suggest asking employees to think about a time they were disappointed after buying a product based on the advertising. Nearly everyone will have an example. If you have time, asking people to share is an effective engagement tactic to get employees to understand the reason advertising laws exist.
Suggested time: 5 minutes - 1 slide
2. Create honest marketing claims
The key to advertising law compliance is to create honest content that does not mislead consumers or misrepresent your or your competitors' products.
The concept of honesty is the driving force behind advertising laws such as the FTC Act, the Lanham Act and CAN-SPAM. These laws require companies avoid using "deceptive advertising" in the marketplace. Although specifics of these laws do somewhat vary, each can be combined into a general training topic emphasizing honesty in advertising.
The honesty principle (and advertising law compliance) can be best illustrated by a series of do's and don'ts:
ADVERTISING COMPLIANCE DO'S
DO have evidence to back up your marketing claims - the FTC Act requires that your marketing claims be "evidence-based". Employees need to understand that claims can't be based on wishes, and evidence sources have a hierarchy of authority. The more independent and thorough the source, the more an advertiser can rely on its claims in marketing its products. For organizations making competitive comparison claims, corporate counsel may want to educate employees on adequate claim substantiation using the Pfizer factors.
DO consider all possible reasonable interpretations of your marketing materials - According to the FTC, your company is responsible for all reasonable interpretations of its marketing claims. Also, if any reasonable interpretation is likely to deceive customers, you could be responsible for damages under the Lanham Act. Because of this, it's important for your marketing department to put themselves in the consumer's shoes whenever drafting a new advertising claim. Depending on the size of your legal department, it may even be worthwhile to have corporate counsel review all new marketing material before its release.
DO use clear and prominently displayed disclosures where your marketing claim has limitations - In order to disclose your claim's limitations and prevent alternate interpretations, marketers must use disclosures wherever necessary. The FTC requires that all claim disclosures be clear and conspicuous. Corporate counsel should train employees on this principle by using examples of approved disclosures. To get yourself ready for a barrage of online disclosure questions, corporate counsel should prep by reading the FTC's .com guide.
DO disclose all connections to endorsers and testimonials. Failing to make a disclosure about an endorsement can cost your company millions. Employees should understand that when the company pays for an endorsement or testimonial, it must disclose that relationship to the customer. Corporate counsel also need to make sure that the marketing department is on the same page with its outside marketing agencies to disclose such interests.
ADVERTISING COMPLIANCE DON'TS
DON'T use false or misleading statements - Obviously being honest requires that a company not directly lie to customers. That said, employees need to be trained to recognize where a marketing claim could be "misleading". Again, this is best done by showing employees examples of misleading advertisements so they understand potential risks of their claims.
DON'T omit material information from statements - Many employees don't know that omission of material information is equivalent to an outright false statement. Again, because advertising law is so fact-specific, it's best to train employees with examples of how material omissions violate advertising laws.
DON'T rely on fluffy statements or "corporate puffery" exceptions without first discussing with the legal department - It can be tempting for an advertiser to say that an allegedly false marketing claim is "just fluff" and not false advertising. However, the FTC has very specific guidelines for classifying advertisements as "corporate puffery" (which are by definition not false advertising). Advertisers should have corporate counsel vet risky claims which could be considered corporate puffery. However, for training purposes, the key is showing (not telling) employees examples of corporate puffery.
Suggested time: 30 minutes - 7 slides
3. Be careful when communicating directly with customers via email or social media
Wouldn't it be easy if all advertisements were "Mad Men-esque" billboards and magazine clips? Well probably not, but advertising law compliance isn't getting any easier for corporate counsel in the age of social media and email marketing. There are a host of laws and rules which deal with employee and company use of social media, but there are a few direct-to-customer communication "don'ts" corporate counsel should target for employee training:
ONLINE COMMUNICATION DON'TS
DON'T send emails to people who don't want them - A large portion of CAN-SPAM compliance (sending commercial emails) is devoted to the Do's and Don'ts in the "Be Honest" section above. However, a good rule of thumb to follow is simply, don't send emails to people who don't want them! Of course, it's important employees understand that every commercial email needs an easy and conspicuous "unsubscribe" option. However, if you avoid trouble in the first place by only sending emails to people who have already opted-in to receive your company's emails, all the other CAN-SPAM compliance requirements fall in place pretty easily. Corporate counsel will likely only need to briefly highlight this concept as it's pretty easy to understand.
DON'T indiscriminately collect personal information - Corporate counsel don't need to train employees on every law that regulates collection of personal information online. That said, employees should be aware that the company can't collect personal information (including email addresses, etc.) without clearing the entire program with legal. The FTC has a good guide to vet your program.
DON'T violate social media advertising terms of service - All social media sites regulate how companies can advertise to their users. Corporate counsel simply need to instruct advertisers to be aware to follow such guidelines for each advertising campaign on a given platform. Here are the terms of service for Facebook and Twitter.
Suggested time: 10 minutes - 1-2 slides
Even though I've placed questions and answers at the end of the outline, making your advertising training interactive is extremely important. If your audience is not engaged, you might as well not do the training.
In order to do this, I encourage you to allow Q&A throughout the training presentation. Let employees interrupt you when they don't understand a concept. I realize this makes staying on schedule much more difficult, but it's important to make sure concepts are understood before you move on. You may never get another chance as I'm sure most of your employees aren't writing down a list of questions to ask you at the end.
This is obviously not the end of advertising law training. Nor is it the complete picture. Advertising laws are incredibly complicated (especially if you're operating within a special regulated industry), but so is employee training. The goal of this training guide is to allow corporate counsel to focus on what employees truly need to know about advertising laws.
Let me know in the comments what other advertising issues corporate counsel should address during training!