Online Advertising Law

January 3, 2021


Federal Trade Commission

Recently we shared about the different types of user-generated videos that individuals create and share on the web. More and more brands are re-purpose this user-generated content to help influence purchase decisions and supplement their advertising efforts. Here are the most popular; 

Product Review videos

Haul videos 

How-to videos 


Over the years, this type of user-generated content has become more popular and has grown small creators into huge influencers with a large viewership. 

The Federal Trade Commission (FTC) has created a series of rules and guides to prevent deceptive practices and protect consumers from misinformation and unfair or misleading advertising.

Here is guidance from the FTC about online disclosures and the need to be clear and conspicuous in accordance with the law.

For online ads, these three principles outline the law for advertisements:

1. Advertising must be truthful and not misleading.

2. Advertisers must have evidence to back up their claims ("substantiation").

3. Advertisements cannot be unfair.

For endorsements and testimonials that appear on advertisements, these principles apply: 

1. Must be truthful and not misleading.

2. Testimonials claiming specific results generally mean the endorser's experience is what other people can expect. They need to:

  • Have adequate proof to back up results
  • Clearly disclose results people can expect
  • Clearly disclose any connection between an endorser and an advertiser.


Some of the extracts that we also consider relevant are the following:

"...The ultimate test is not the size of the font or the location of the disclosure, although they are important considerations; the ultimate test is whether the information intended to be disclosed is conveyed to consumers..."

... "the Guides Concerning the Use of Endorsements and Testimonials in Advertising ("Endorsement Guides") apply to "any advertising message ..."

"... that consumers are likely to believe reflects the opinions, beliefs, findings, or experience of a party other than the sponsoring advertiser ..."

Link to .com Disclosures

About the Author

Ajay Bam is the CEO and Co-founder at Vyrill, a first-of-its-kind video intelligence company launched in 2017 through UC Berkeley’s Skydeck Incubator program. Vyrill helps brands and shoppers find the “moments that matter” inside videos. Its AI-powered “In-Video’' search technology analyzes & shares insights hidden within videos to improve personalization, SEO, and conversion. Before Vyrill, Ajay launched Boston-based, mobile shopping app company Modiv Media. He is a proven and accomplished product management professional, entrepreneurial thinker, and innovator with more than 13 years of experience leading startups and world-class brands.

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