Developing and implementing Internet marketing strategies for both our own company and clients ranging from solo entrepreneurs to huge corporations… coupled with a legal background… has given me what may be a unique perspective on the legalities of Internet marketing.

Perhaps more than most, I’m acutely aware of the need to balance a super-enticing offer… with something that is NOT misleading or deceptive.

Let’s talk about pay-per-click (PPC) ads. And remember, I’m not your lawyer and what follows is not legal advice! These are just a few points to consider when you write or commission your next pay-per-click ad. Actually, the principles apply to any kind of advertising, but there are a few issues that particularly apply to pay-per-click (PPC) advertising on the major search engines.

Quick background: in many jurisdictions it is illegal to engage in misleading advertising. This is certainly the case in both the United States and Australia. Now, each law will differ in terms of its detail, interpretation and application, but there is a general notion in such jurisdictions that advertising must be truthful and not mislead consumers. Further, the question of whether or not something is misleading or not depends on the overall impression left in consumers’ minds.

I’m not qualified to comment on U.S. law, but in Australia it is well-accepted that, depending on how it’s phrased, an advertisement will be judged on its own merits – NOT in the context of a larger campaign or sales process. In other words, a 30 second radio commercial will be judged based on what is said (or not said) during the 30 seconds of that commercial – not as one part of an overall campaign that may involve other forms of communication, such as a TV commercial, print advertisement, direct mail piece or what is said at point of sale.

For example, an ad run by a bank which makes an offer such as “no joining fee if you take out a home loan with us” is likely to be misleading if it turns out – when the prospect goes to take out a loan with the bank – that the joining fee is only waived if the prospect takes out a certain kind of loan, has or acquires other products with the bank, and meets other specific conditions.

Actually, this is a real example – one of Australia’s largest banks was found to have engaged in misleading and deceptive conduct for doing exactly this.

Similarly, when it comes to PPC ads, if you make a certain claim… without indicating that important conditions apply… you may well be breaching the law.

So, just as in the above example, a short PPC ad where you indicate that someone WILL get the joining fee waived when they open an account… but fail to indicate that conditions apply, may well be misleading EVEN THOUGH all the conditions are clearly spelled out on the landing page.

Therein lies an interesting issue: could it be argued that the limitations of the PPC medium (a total of 95 characters, excluding the URL, in the case of Google Adwords) combined with the ease with which customers can view all the relevant conditions (i.e. by clicking on the link) mean that you don’t have to explain everything in the ad and that it is okay to provide all the applicable conditions on the landing page?

I’m told – by a lawyer who regularly reviews ads and advises in this area – that clearly conveying the applicable terms and conditions on the landing page may help this argument… as long as the PPC ad itself is in no way misleading.

To me, a safer approach to making conditional offers is to express them in terms of HOW someone might get the advertised benefit rather than that they WILL get the advertised benefit. For example, instead of “No Joining Fee” the offer might be “How To Avoid The Joining Fee”. Not as strong, but at least it’s not illegal!

My lawyer friend wasn’t enthused by this approach either, but I believe that PPC advertising just won’t work if advertisers can’t use bold offers of any kind. In my view, if you specifically avoid indicating that someone WILL get a particular benefit AND clearly explain any applicable conditions on the landing page, that should be enough.

After all, we’re hardly inconveniencing or misleading customers if all they must do is click a link to find out about all the relevant conditions. And how many prospects buy anything based only on what is said in the 95 characters of a PPC ad? Surely, most PPC ad prospects know and EXPECT to read more about the offer on the landing page.

Finally, these laws are generally aimed at protecting consumers from being disadvantaged, or at least, inconvenienced, by misleading conduct. To what extent is someone disadvantaged or even inconvenienced by CLICKING ON A LINK? As long as the landing page gives them the full story, I can’t imagine that anyone could be seriously disadvantaged or inconvenienced by having to click on a link.

No doubt, this will be tested in the courts one day (if it hasn’t been already). Hopefully not by you or me! But in the meantime, it’s a good idea to be aware of these issues and keep them in mind before writing, commissioning or uploading your PPC ads to Google and the like. Sure, that hypey PPC ad may be more powerful… it may attract a higher click-through rate… but is it worth running if you end up with the U.S. Federal Trade Commission or the Australian Competition and Consumer Commission breathing down your throat?

And remember, if you’re displaying your ads to audiences in other countries… you’re also subject to the laws of those countries. More on that in a future issue of the newsletter!

Sources: United States Federal Trade Commission, “Advertising and Marketing on the Internet: Rules of the Road”, United States Federal Trade Commission, Australian Competition and Consumer Commission, “Advertising and Marketing”, January 2007

This entry was posted on Wednesday, July 2nd, 2008 at 6:14 am and is filed under Feature, Search Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.