Good marketing is critical to the success of your business. Marketing has many dimensions, including market research, pricing, advertising, packaging and labeling, distribution and customer service. Investing in a good marketing plan will generate excellent returns.
But there's more to a winning marketing plan or advertising campaign than a profitable product or service. Unfair, untruthful or purposely deceptive advertising can result in costly penalties. The resources below provide information on how to legally advertise your small business:
Advertising laws are aimed at protecting consumers by requiring advertisers to be truthful about their products and to be able to substantiate their claims. All businesses must comply with advertising and marketing laws, and failure to do so could result in costly lawsuits and civil penalties. So before you start an advertising campaign, it's important you understand some basic rules.
The Federal Trade Commission (FTC) is the main federal agency that enforces advertising laws and regulations. Under the Federal Trade Commission Act:
Additional laws apply to ads for specialized products like consumer leases, credit, 900 telephone numbers, and products sold through mail order or telephone sales. State and local governments also regulate advertising, and enforcement is usually the responsibility of a state attorney general, a consumer protection agency or a local district attorney.
The following resources and how-to guides help small business owners comply with federal advertising laws:
Individual states and some localities have also passed specific truth-in-advertising laws. The Consumer Action Handbook provides links to state and local agencies responsible for enforcing truth-in-advertising and related consumer protection laws.
The label and packaging on products you create and/or sell are forms of advertising. The claims make on product packaging must comply with some basic truth-in packaging and labeling rules. These claims include descriptions of ingredients, package size and volume, and discount or lower price labeling. Under the Fair Packaging and Labeling Act (FPLA), the Federal Trade Commission (FTC) and the Food and Drug Administration (FDA) issue regulations requiring all consumer commodities be labeled to disclose net contents, identity of the product, and name and place of business of the product's manufacturer, packer, or distributor.
An old cartoon in the New Yorker showed two dogs in front of a computer, and had the caption "On the Internet, Nobody Knows You're a Dog." The inherent anonymity of the Internet has fostered a number of shady advertising and marketing practices, such as unsolicited e-mail spam. Over the past decade, federal and state governments have passed additional advertising laws that protect consumer privacy and ensure fair and truthful advertising practices online. If you plan to advertise online -- whether you're buying ads on search engines or direct marketing through e-mail -- you'll need to understand some basic rules.
The federal government regulates the advertising and labeling of a number of consumer products. If you manufacture or distribute one of the products below, you will need to comply with some specific requirements.