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Compliance in Marketing: What You Need to Know

It wasn’t all that long ago that dealers were limited to just a few forms of advertising: print, radio and television.
Then along came the Internet, which provided more opportunities to reach consumers including websites, third party listing sites, banner ads, PPC and e-mail. Soon, social networks began to pop up, giving dealers even more ways to reach consumers.

 

In the last 25 years, the retail automotive industry has transformed from a model where dealers handled customers primarily in their local market, to more of a national marketplace for each dealer. Today, many dealers routinely sell and ship cars to consumers across the country. And, it’s all due to the interconnectedness technology now brings. However, with this new marketplace there is one thing that becomes even more important:

 

Compliance!

Most dealers are aware of compliance laws that apply to traditional advertising, because they’ve been doing it for years. Small print at the end of print ads, along with radio commercials featuring someone who talks rapidly at the end to be sure to include all the required disclosures, are still commonplace. However, with the Internet growing and changing so much, it can be hard for dealers to keep up with compliance laws for all digital forms of advertising. The fact is that any dealer’s website is, very simply, a self-owned marketing channel.

 

Did you know that very same disclaimers required in traditional advertising also apply to social media? Try squeezing that disclaimer into 140 characters. What about those Facebook ads? Have you reviewed your website to see what claims, offers or incentives you are advertising? All of these require the same disclosures as your newspaper advertising.

 

Part of the reason consumers get jaded when they see advertising offers is due to the lack of transparency. Imagine a customer that comes across a tweet from your Twitter account that states, “2016 Ford Escape only $249/month! Lots to choose from! [Link to website]” What does that tell a customer? Nothing. And that’s a problem. Back in 2013, the Wall Street Journal posted an article outlining a ruling by the FTC that tweets are subject to the same compliance laws as any other form of advertising and therefore need to contain (or at least link to) the required disclosures. Facebook ads are not exempt either. Even if you simply copy national lease specials from your OEM. Every ad still needs to contain the same info (terms, down payment, pricing, incentives being offered, VIN number, etc.)

 

What about your website?

It’s not uncommon to find special offers and pricing contained within vehicle descriptions and, more often than not, the vehicle descriptions contain no disclosures other than something like “Call us for details.”

 

One of the largest compliance failures involves vehicle pricing. Many dealers have one price for vehicles on the lot, while those same vehicles are priced lower on their website and, most likely, any third party listing sites the dealer subscribes to. In most cases, if a vehicle is advertised in any way, the dealer MUST sell it to the consumer at the advertised price, regardless of if the consumer is aware that the vehicle is advertised or not.

 

The FTC is cracking down on dealers and, while they may be a little behind in publishing specific rules for new platforms, they are still responding to consumer complaints and as a result demanding audits and fines. Consumers want good deals and there is no problem with using your marketing to make your audience aware of them. However ensure that all of the required disclosure information exists within your marketing – whether that message is printed in a newspaper, aired on the radio, resides on your website, is tweeted, posted on Facebook, (as a post or an ad campaign) or communicated in any way to a consumer. Consumers will appreciate the transparency and will be much more likely to trust your dealership. And that’s what leads to retention and customer loyalty.

Views: 216

Tags: FTC, advertising, automotive, compliance, dealership, digital, marketing, pricing, regulations, traditional, More…website

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Influencer
Comment by Jerry Thompson on June 6, 2016 at 10:26am

Thanks for bringing up this topic Tony.  In particular on dealer websites and digital marketing Reg M (lease) and Reg Z (loan) advertising disclosure requirements are more often non-compliant than compliant.  While the root of the compliance problems range from dealer staff, dealer advertising firm, website provider, digital marketing company and even the OEMs, it is the dealer that will ultimately pay the price of reputation damage, attorney's fees and penalties when they are charged by the FTC.  Google "Operation Steer Clear" and "Operation Ruse Control" to see what I mean.  Every dealer, digital marketing company, ad agency, OEM should be familiar with the FTC dotcom (google it) disclosure publication by the FTC as well as results of rulings on cases in the last couple of years.  Here is a nice summary from Randy Henrick, Associate General Counsel at DealerTrack:  www.nadaconvention.org/nada2015/Custom/Handout/Speaker0_Session2255...

This is an enormous "tip of the iceberg" problem that the industry needs to deal with and I appreciate you bringing it up in this forum.


Dealer
Comment by Michael on June 6, 2016 at 8:16am

The FTC guidelines for Social Media are yes, very analogous in disclosure requirements to print radio and TV as recent past. Easy Easy. Thanks Tony for this share. 

Comment by Bruce from Caddyinfo.com on June 6, 2016 at 7:53am
Good & timely article. I agree the best deals are transparent - no surprises at close.

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