Imagine: You have a great new product. Financing is lined up, and your manufacturers, call centers and fulfillment houses are ready to roll. You have a great product name and brilliantly creative marketing strategy. You’ve come up with a dazzling infomercial or short form script. Ad testing starts in two days. The product is a can’t-miss, sure-fire hit just waiting to be introduced to adoring consumers.
Sounds like you are ready to go, right? Wrong.
What’s missing is a serious legal review of your advertising and marketing practices by competent counsel to ensure compliance with state and federal regulations – a review that should occur before you test any advertisement or telemarketing script.
You may be thinking, “But lawyers cost money and water down my advertising. Besides, I have a general understanding of the danger zones and can steer my advertising and business practices around them. If I need legal counsel, I can always get it after I test my ads.”
This kind of thinking is shortsighted and potentially expensive. The minefield of regulations governing your business practices is vast, and tripping over any one of them could cost your company (and possibly you personally) thousands to millions of dollars. Many advertisers have learned this the hard way.
P’s and Q’s and FTc
States and the Federal Trade Commission have broad authority to bring actions and launch investigations to stop a variety of unfair and deceptive trade practices and to enforce numerous rules governing business practices.
Although most advertisers are generally aware of prohibitions against false and deceptive advertising and the need to comply with federal telemarketing sales rules, the laws do not stop there. There are literally hundreds of laws and regulations apart from general unfair and deceptive trade practices statutes you may need to comply with.
For example, a number of states require telemarketers to register and post a bond, and to make certain mandatory disclosures in all advertising. Some states do so without distinguishing between inbound and outbound telemarketing.
Consequently, if you engage in inbound telemarketing but do not register or make certain disclosures, you could be the subject of an investigation or lawsuit for failure to comply with certain states’ telemarketing laws.
This is just one example out of hundreds of legal requirements that pose a danger to you if you do nothing about them.
Getting competent legal review early in your marketing is also critical because law enforcement agencies hold test advertising to the same standard as rollout advertising.
The FTC and state attorneys general do not care that your test ads-which may have made deceptive claims-were limited in scope and in sales. Even if later ads are “clean,” there is a risk that the earlier test ads will be pointed to as evidence of intent to mislead consumers. Don’t give them the ammunition; get legal review early.
Finally, it is important to have your legal review conducted by counsel who understands not only the law, but also the business of direct response advertising. You need counsel who knows where the line is and can advise you how not to cross it, while doing so with the recognition that you do not want to leave money on the table.