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8 Takeaways from the FTC Workshop “Putting Disclosures to the Test”

Marketing and advertising researchers gathered in DC last week to share their insights on disclosures: what they are, where to put them, and most importantly, which ones work?

At the FTC Workshop “Putting Disclosures to the Test,” speakers discussed ways to evaluate the effectiveness of disclosures for advertisements, privacy policies, and drug risks, and they presented their findings from putting disclosures to their own tests. The workshop aimed to encourage and improve the evaluation and testing of disclosures by the industry, academics, and the FTC.

Here are some of their findings from their research:

1. Avoid competing modalities when designing and implementing disclosures in an environment.

A study on advergames showed that disclosures conveyed through two modalities (in this study, text crawl below the game screen and a voiceover every 10 seconds of what was said in the text crawl) are less effective on parents’ ad recognition of child-directed advergames than disclosures conveyed through a single modality (i.e. text crawl alone). The lead researcher of this study, Nathaniel Evans, suggested, “While recent Dot-Com disclosures recommend that disclosures align with the modality of the environment in which it appears, we suggest this is not effective.” When creating disclosures for other contexts, it’s important to consider the predominant mode of communication used (visual, auditory, etc.), and then create disclosures that can be accessed by the least burdened cognitive system.

2. Don’t trust consumers when they claim that they read your disclosures.

While 80% of participants in a study claimed to have read half or more of a drug risk disclosure, eye-tracking technology revealed limited to no reading of the disclosure. Reasons could be that consumers prefer to get risk info from physicians or health websites like WebMD instead of from advertisers, or they may be overly optimistic that they won’t be subject to the risks. Recommended ways to increase the number of consumers who read the drug risks are to 1) present drug risks before benefits, rather than benefits first, and 2) to signal novel information with colors, boxes, or other unique formatting.

3. The word “paid” in advertising disclosures most successfully signify to consumers that something is a paid ad.

Out of several labels tested, labels such as “Paid Ad,” “Paid Content,” and “This content was paid for” had the highest rates of consumers’ recognition that something is a paid ad (80+%). More deceiving ad labels include “Brand Voice” and “Brand Publisher,” garnering 64% or less ad recognition. Clearly, it pays off to include the word “paid” next to ads.

4. Other factors besides written disclosures can boost consumer recognition of an ad.

A study of ads in social media showed that factors besides disclosures, such as ad position (in stream or in the sidebar), brand familiarity (high or low), and image professionalism (professional or amateur), have an effect of consumers’ ad recognition. For example, in-stream ads for unfamiliar brands had lower ad recognition than familiar and unfamiliar ads shown in the sidebar. In contrast to current FTC guidelines, written disclosures alone may not be enough to signal an ad. Other factors should be considered and incorporated to reduce any potential misunderstanding.

5. The environment in which a consumer views a disclosure matters more than the design of the disclosure.

If you include a disclosure on a form you want consumers to sign, consumers may be more likely to view the disclosure if they’re viewing it by themselves rather than in someone's presence. This is what one study proved. Regardless of the location of the disclosure on the form (i.e. at the beginning or at the end), study participants who viewed the form on their own were 7 times more likely to have viewed the disclosure than if they viewed the form in the presence of a researcher before receiving their compensation for participating in the study.

6. Shortened consent forms created from consumer feedback may be more effective than full-length consent forms.

When consumers provide feedback on which disclosure info is most critical for their decision-making, forms can be created to include only these critical components to increase consumer engagement with them. A study on asthma patients showed that shorter patient-derived consent forms for participating in a clinical trial had more engagement than longer traditional forms. Cognitive overload by many elements on a page may prevent consumers from comprehending disclosures and being able to provide “informed” consent. if you really want patients to pay attention to disclosures, it’s better to limit what you include on a page.

7. Simplify disclosures to emphasize unexpected or surprising information.

A study suggested that for privacy policies, full-length disclosures and medium-length disclosures (i.e. with some commonly known data practices left out) resulted in no difference of disclosure awareness. Since participants didn’t spend any less time reading the shorter disclosures, marketers can make their lives easier by shortening disclosures to exclude low-impact or commonly known practices and to include only high-risk or new practices that consumers must know about to inform their decision-making. A little less can mean a lot more.

8. Personalization of privacy notices may be upcoming in the future.

As technology continues to develop to personalize users' settings, preferences, and experiences, panelists at the workshop suggested that privacy notices may also be part of this trend. If your phone recognizes the kind of privacy practices you've approved before, it can automatically approve those for new apps and show you only new, unfamiliar privacy practices. This may increase consumer engagement with the notices and with providing informed consent to new privacy features.

 

With the wealth of information presented at this workshop—much of which supported or overlapped with each other—marketers should be on the lookout for revisions to the FTC’s disclosure guidelines in the near future. In the meantime, they should work to come up with ways to test the efficacy of their own companies’ disclosures. The FTC will be watching out for those too.

 

For more information on this workshop and future FTC workshops, visit their official website ftc.gov.

Tags: Regulatory Compliance

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