The Federal Trade Commission (FTC) issued Notices of Penalty Offenses and cover letters to close to 700 advertisers of over-the-counter drugs, homeopathic products, dietary supplements, and even cereal foods on April 13, 2023. This move by the FTC puts advertisers on notice of their obligation to have adequate substantiation of their claims.

Notably, the FTC is not accusing businesses that found their way onto the FTC’s list of deceptive or unfair conduct. Still, these notices do put them on notice that failing to have adequate substantiation could subject them to civil penalties of up to $50,120 per violation in the first instance in a subsequent enforcement action. In that way, these notices are a means for the FTC to side-step the Supreme Court’s decision in AMG Capital Management v. FTC, which stripped the FTC of its ability to seek equitable monetary relief in cases under Section 13(b) of the FTC Act.

This is the fourth set of these notices since Chair Lina Kahn took the reins of the FTC in 2021. Prior notices in that timeframe related to money-making opportunities, endorsements and testimonials, and for-profit colleges went to roughly 1,900 companies. What has emerged is a large and growing swath of companies – none of whom are accused of wrongdoing – being set up for civil penalties in standard advertising enforcement matters using a technique that had previously been dormant for decades.

The FTC is flexing its muscle, and it remains to be seen whether and to what extent the FTC will follow through and bring enforcement sweeps seeking large civil penalties. That said, given the effort it has expended to get this far, it does seem likely that more of these notices will be forthcoming and in a broader set of issues (perhaps including privacy and data security) and that the FTC will bring follow-up enforcement actions.

Under the FTC Act, product claims must be substantiated in order to avoid deception, in violation of the FTC Act. The FTC Policy Statement on Advertising Substantiation outlines specific substantiation standards, including having a reasonable basis consisting of competent and reliable evidence for objective product claims, having access to competent and reliable scientific evidence to support any health or safety claims, obtaining at least one human clinical trial to support any claims that a product is effective in curing, mitigating, or treating a serious disease, not misrepresenting the level or type of substantiation for claims, and not misrepresenting that a product claim has been scientifically or clinically proven.

The recipients of the advertising substantiation Notices of Penalty Offense letters also received a copy of a previously approved notice of penalty offense regarding the use of endorsements and testimonials, which addresses false endorsements, misrepresentation of the identity of endorsers, and the use of endorsements to make deceptive performance claims. The companies were also encouraged to review the FTC’s recent Health Product Compliance Guidance, which was issued in late 2022 and updated the FTC’s 1998 Dietary Supplements: An Advertising Guide for Industry guidance. The 2022 update demonstrates how to ensure that claims about the benefits of health-related products are not misleading and are substantiated appropriately.

The FTC reaffirmed its commitment to the underlying legal requirement of advertising substantiation, stating that advertisers and ad agencies must have a reasonable basis for advertising claims before they are disseminated. The Commission intends to continue vigorous enforcement of this existing legal requirement that advertisers substantiate express and implied claims, however conveyed, that make objective assertions about the item or service advertised.

Objective claims for products or services represent explicitly or by implication that the advertiser has a reasonable basis supporting these claims. These representations of substantiation are material to consumers. That is, consumers would be less likely to rely on claims for products and services if they knew the advertiser did not have a reasonable basis for believing them to be true. Therefore, a firm’s failure to adequately substantiate its claims can deceive consumers, harm competition, and violate the law.

The FTC’s recent actions send a clear message to advertisers that they must take their substantiation obligations seriously. Advertisers must have a reasonable basis for any objective claims they make about their products or services. This means that advertisers must have competent and reliable scientific evidence to support their claims, especially when it comes to health and safety claims.

The FTC’s Health Product Compliance Guidance, which was updated in late 2022, provides specific guidance to advertisers on how to ensure that their claims about health-related products are not misleading and are substantiated appropriately. Advertisers must ensure that their claims are supported by scientific evidence, including human clinical trials, and must not misrepresent the level or type of substantiation for their claims.

The FTC’s recent enforcement actions also serve as a reminder to advertisers that they must be careful when using endorsements and testimonials in their advertising. Advertisers must ensure that their endorsements and testimonials are truthful and not misleading, and that they do not misrepresent the identity of endorsers or use endorsements to make deceptive performance claims.

The Federal Trade Commission’s recent notices of penalty offenses for inadequate substantiation of advertising claims have highlighted the importance of understanding the FTC’s requirements. In this regard, the FTC has identified several persistent myths regarding substantiation that can lead to non-compliance. The first myth is that having a couple of studies supporting a claim is sufficient substantiation. The FTC clarified that the totality of evidence, including independent studies, must be evaluated to determine if a claim is substantiated.

The second myth is that claims for products with real benefits do not require substantiation. The FTC emphasized that even products with real benefits must have a reasonable basis, as illustrated by a recent consent order against NordicTrack, which made unsubstantiated weight loss claims despite using studies with methodological flaws. The third myth is that testimonials are sufficient substantiation for health-related claims. The FTC has explicitly rejected this as substantiation and considers anecdotal evidence in assessing the scope of injury to consumers.

The fourth myth is that endorsements are valid if the endorsers genuinely use and like the product. The FTC explained that the use of consumer testimonials gives rise to a “typicality” claim, which must be substantiated or qualified with a clear disclosure of the generally expected results. The fifth myth is that disclosures that flatly contradict a deceptive claim immunize a company from liability. The FTC advised that it looks at the net impression created by an advertisement and recommended narrowing claims to what can be substantiated. Finally, the sixth myth is that “results may vary” is an adequate disclosure. The FTC explained that this is not the case and warned against using this as a disclaimer.

Also, the FTC clarified that claims about dietary supplements are regulated by both the FDA and the FTC. While the FDA has responsibility for label claims, the FTC seeks to ensure that claims made in advertising do not deceive consumers. The FTC advised that the manufacturer must have substantiation that structure and function claims are truthful and not misleading. A special Commission on Dietary Supplement Labels is evaluating the evidence that the FDA will require as substantiation and has consulted the FTC about its policies for substantiation of advertising claims for dietary supplements.

Advertisers must also be careful when making claims about the benefits of their products or services. They must ensure that these claims are substantiated appropriately and are not misleading. Advertisers must not make false or misleading claims about the safety, efficacy, or performance of their products or services.

Attention metrics are proving to be one of the best metrics for certain online advertising. With the rise of digital advertising, capturing audience attention has become more important than ever. The focus on attention is part of an industry-wide push for measurement tools that go beyond recording a person viewing an ad and instead focus on whether they had an opportunity to absorb its messaging. In this article, we will explore the concept of attention metrics and why they are becoming increasingly important in the advertising industry.

Attention metrics are a collection of data points that are used to predict the likelihood that a given media environment and ad creative will draw attention from a hypothetical audience member. These data points can include eye-tracking studies, which follow the path of a participant’s gaze around the screen, as well as proxy signals like viewability, time in view, dwell time, contextual alignment, cursor hover time, scroll depth, click-through rate, and audio volume levels. All of this data is fed into a machine-learning model that predicts what types of media content and campaign creative will resonate with people.

One of the most important aspects of digital advertising is capturing audience attention. According to a recent report by Oracle Moat, for an ad or campaign to be successful, a combination of metrics will give brands a holistic view of performance. These metrics should be measured against industry benchmarks and the brand’s own business goals. For desktop and mobile content, the industry benchmarks for in-view time, exposure time, hover rate, and touch rate are 28.8 seconds for in-view time on both desktop and mobile, 7.5 seconds for interaction time on desktop, 3.4% for hover rate on desktop, and 11.8% for touch rate on mobile.

When it comes to video, which is the most common content type used in branding campaigns, a mix of sight, sound, and motion signals are important to assessing the quality of the ad exposures. The Oracle Moat report states that video played in-view should be 78.7% (approximately 79 seconds), video completions in-view with audio enabled should be 29.56% (approximately 29.6 seconds), impressions where the ad was audible for any period of time should be 37.97% (approximately 38.0 seconds), and impressions where the video was played to completion should be 69.4%.

Ads optimized for attention can increase recall and get more attention than a traditional advertising campaign. Attention metrics show how much time a user is spending on any given piece of content, which then helps brands determine whether their ads are effective at getting users to watch videos or read articles. By tracking how many people are engaging with their ads, they can also measure how well ads perform compared to competing products or services.

The importance of attention metrics has been demonstrated by Lumen Research, which has released a report from PwC just TODAY that reviews the Lumen Attention Measurement Platform (LAMP). LAMP is the first attention technology product to be assessed by PwC. From June 2022 to October 2022, PwC conducted a detailed walkthrough with Lumen on the company’s attention prediction methodology across both global and domain models.

PwC reviewed the application of Lumen’s methodology for three blue-chip advertisers; assessing the datasets and calculations used to verify the correlation between attention and click-through rate and conversion, in comparison to viewability.

PwC found that Lumen’s attention model correctly predicted whether an impression was viewed 70% of the time, where “viewed” is measured by a detected eye gaze on an ad for at least 100 milliseconds. The review’s findings demonstrated that attention per impression was correlated with superior click-through rates and conversion, in comparison to viewability. This indicates the importance of attention metrics for brands as a way to drive better performanceacross both engagement and purchase orders. The relationship between predicted attention and brand lift metrics such as ad recall was more complicated, and in line with viewable time metrics due to brand size and creative execution.

The findings of this report highlight the value of attention metrics in the advertising industry. By measuring whether an ad has captured a person’s attention, brands can better understand how their ads are performing and optimize them accordingly. Attention metrics are becoming increasingly important as advertisers seek to engage with audiences in more meaningful ways.

With the rise of ad-blocking technology and the increasing use of mobile devices, capturing attention has become more challenging than ever before.

Attention metrics can help advertisers identify the most effective media environments and creative formats to engage their target audience

By understanding which media environments and creative formats are most effective at capturing attention, brands can allocate their budgets more efficiently and maximize their return on investment. Attention metrics can also help brands optimize their campaigns by identifying areas for improvement and making data-driven decisions.

The use of attention metrics is not limited to digital advertising. Out-of-home (OOH) advertising is another area where attention metrics can be applied. For example, Lumen Research has developed a platform for measuring attention in OOH advertising. The platform uses computer vision to track the eye movements of people as they pass by OOH ads. This data is then used to predict the effectiveness of different OOH ad formats and locations.

Attention metrics are proving to be one of the best metrics for certain online advertising. By measuring whether an ad has captured a person’s attention, brands can better understand how their ads are performing and optimize them accordingly. Attention metrics can help advertisers identify the most effective media environments and creative formats to engage their target audience. The use of attention metrics is not limited to digital advertising and can be applied to other areas such as out-of-home advertising. As the advertising industry continues to evolve, attention metrics will become increasingly important for brands seeking to engage with audiences in more meaningful ways.

Microsoft has announced that it will be dropping Twitter from its Microsoft Advertising plan starting from April 25, 2023. This comes after Twitter’s owner, Elon Musk, made an appearance at a major marketing and advertising conference where he tried to lure brands back to the platform following the loss of half of its biggest advertisers after his takeover of the company. Musk’s reaction to the news was swift, accusing Microsoft of using data from Twitter without permission to train its chatbot and threatening to sue the company.

The decision means that users will no longer be able to access their Twitter account through Microsoft’s Digital Marketing Center’s social media management tool, nor will they be able to schedule, create or manage tweets or tweet drafts. Microsoft’s social media service was previously provided for free to advertisers and was prominently featured in Microsoft Advertising’s Digital Marketing Center dashboard. The feature allowed advertisers to manage their social media accounts on various platforms, including Facebook, Instagram, LinkedIn, and Twitter, in one place.

Companies that use Microsoft Advertising will still be able to manage and create content for Facebook, Instagram, and LinkedIn through the platform, just as they were able to before. However, this decision is expected to leave a significant hole in Twitter’s already-ravaged bottom line.

The decision was likely made due to Twitter’s decision to charge enterprises considerable sums for accessing its API. An enterprise-level subscription to the API can cost as much as $42,000 a month. Microsoft’s move has clearly enraged Musk, who is already struggling to turn a money-hemorrhaging social media company around.

The announcement also comes a day after Reddit announced that it will start charging AI companies for training their models on any content submitted to the company’s platform. This decision may have inspired Musk’s vague threat, but it remains to be seen whether a lawsuit accusing an AI company of training its data on content it didn’t seek express permission for can stand up in court.

Microsoft’s move has drawn attention to the growing importance of AI in the tech world and the power struggles that come with it. Microsoft generated more than $12 billion in digital advertising revenue last year from ads that would be created, managed, and run through its Advertising platform. However, it only generated about 6% of the $198 billion in revenue last year from ads running through its platforms that create and manage ads, according to Insider Intelligence. Google, in comparison, accounted for nearly 30% of total digital ad spend in 2022.

Microsoft is working to change that and has redesigned and integrated generative AI across its platforms, including its search engine Bing and browser Edge. OpenAI, the maker of ChatGPT technology, which Musk co-founded, is also a partner of Microsoft. Microsoft invested $10 billion in the AI company and has integrated its GPT-4 large language model into its Bing search engine.

Musk’s reaction to Microsoft’s decision has raised questions about the use of data in AI training and whether companies have the right to use data from social media platforms like Twitter. It highlights the challenges of balancing the need for innovation with ethical concerns around data privacy and ownership.

In the end, whether Musk follows through with his threat to sue remains to be seen. But one thing is clear: the battle over Twitter data is far from over, and the stakes are higher than ever.