Posts Tagged: Disclosures

“All Profits to Charity” – How Much is That? A Brief Commercial Co-venture Lesson

You’ve heard this sales pitch before. Its cousins are “A percentage of proceeds to charity” and “A portion of the proceeds to charity”. Do you really know how much will be donated? The short answer is no. I’ve read estimates that net profits on a pizza pie are typically 4% to 8%, on new cars around 1-2%, and in the clothing industry profit margins range from 4% to 13%.  The Wall Street Journal has reported that McDonald’s makes 6 cents on a one-dollar hamburger. So if a brand tells you it’s giving “all of its profits to charity,” you need to know where’s the beef. (more…)

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FTC Addresses Nativ(ity) Advertising Just in Time For Xmas

On Tuesday, the FTC issued an Enforcement Policy Statement on Deceptively Formatted Advertisements — a/k/a “native advertising”, along with guidelines for businesses. Simply put, native advertising is generally advertising that takes the form and style of the platform in which it appears in order to promote a product. Think of a BuzzFeed quiz on “5 Random Questions To Determine What Type of Sandwich You’d Be if You Were Reincarnated” that just happens to be sponsored by Subway.

In general, the FTC wants to make sure that consumers know that advertisements and promotional messages are just that, and do not imply or suggest that they’re independent, impartial, or from a source other than the sponsoring advertiser. The FTC’s expressed watchword is transparency.

Best practices include: (more…)

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