A few months ago I wrote that the FTC were considering regulating bloggers who make paid endorsements or false statements and affiliates disclosing their links. Now that it looks like this is going to happen, you're probably asking yourself; what does it actually mean? How will I have to change my affiliate site? And will I one day get a fine in the mail for promoting an affiliate program without disclosure? I've read many blogs on the subject and skimmed the 84-page document from the FTC (which you can download here), and I've tried to summarize what it means. But first my own little disclaimer: I'm not a lawyer and I don't live in the US so I don't come under FTC regulation. This is my best interpretation of what the law means, but you should be sure to do your own research to make informed decisions for your business.
We've all seen these words in tiny text at the bottom of infomercials for years, and provided you have the 20/20 vision required to see it, it basically tells you that the super-model-slim woman talking on the ad about how she lost 200 pounds is a 'best case scenario' and you shouldn't expect to have the same thing happen to you. The idea is that if you're a company and you're using one of your customers as a testimonial, people reading or watching the ad must be able to reasonably expect that they will achieve the same results with your product. If not, you have to tell them.
It's the same idea when it comes to endorsements. Can you reasonably expect the person watching or reading to know that the endorser is paid for their comments and that the comments may not actually be their own opinions? In the case of celebrity endorsements, the answer is typically yes. When you see Tiger Woods talking about how the Gillette Fusion gives him the closest shave ever, most people realize that they guy got paid for it, and probably got a free supply of razors to boot.
But what about when a celebrity is being interviewed on a car show about the car they drive? They might say that they drive a Toyota Prius because it's really good for the environment. But what if Toyota actually gave them the car for free? And if you knew that, would if affect your perception of that celebrity's endorsement? Maybe yes, maybe no. But the bottom line is, the celebrity should probably say that they got the car for free to avoid any complication.
So what about blogs, new media and word of mouth marketing? Because the regulation and the guidelines that define how the law is to be enforced were written before any of these things were around, it's no surprise that these forms of media have got a free pass until now when it comes to disclosure. But that's about to change.
The FTC's opinion is basically this – people go online to look for unbiased information on products and services so they can make informed buying decisions. If they come to a blog where the blogger writes a positive review or endorsement of a product, they're probably more likely to buy it. The problem is that the blogger may have got the product for free, or have received payment for writing about it, or, in the situation that concerns us most, be an affiliate for that product and get a commission on referred sales. While these factors obviously affect the impartiality of a website, the reader may not know the difference. That's why the FTC will be refining the guidelines. This is not actually new law, but rather they are defining how the existing law applies to a new medium.
In the affiliate world there seems to be two camps. There are those who see this as an awful infringement of free speech and envisage the big bad Feds knocking on the door of a 15 year old blogger who happened to put an iTunes affiliate link to a song he liked. Then there are those who think this will only affect scammers, and legitimate affiliates shouldn't really be affected. Some even think that this law will go a long way to improving the level of trust that people have for what they read online. If you are completely upfront about your connections to the product, you could actually turn disclosure into a selling point.
I tend to agree with the latter. If you are promoting a product, there is really no reason why you shouldn't honestly admit that you are an affiliate for the product. At the end of the day, if you are providing enough valuable content to your readers as well as great information on products, then they will still likely buy through you. And as a bonus, your credibility goes through the roof.
The FTC is not actually the big bad wolf it's often made out to be – it is actually trying to protect consumers from being deceived as well as make a level playing field for marketers. And don't worry, you're not going to suddenly receive a fine in the mail or have the cops at your door. The FTC said that they will issue warnings first and only prosecute repeat offenders.
Ok, I understand, now what do I do?
Whether you like it or not, mandatory disclosure of affiliate links is a reality. So here are a few basic guidelines for keeping yourself within the law.
1. Disclose your links (Obviously!!):
If you have an affiliate link, you need to say it's an affiliate link. Some people might start using the (aff) notation next to their links, though personally I find this annoying. You can just say it in your copy, 'click on my affiliate link below to find out more about Product X'. You'll notice that when we promote products on Affilorama, we typically always refer to the link as being our affiliate link anyway, as we provide bonuses that people can only claim by buying through our link. Providing exclusive bonuses is a great way to turn disclosure into a selling point.
2. Don't Lie:
The new guidelines are not just going after paid endorsements or “material connections”, but also false claims made by people promoting a product. But before you start moaning about free speech, remember you are still able to say anything you like about any product. But if you are promoting it, you are no longer just anyone talking about a product; you are a marketer, so you have to watch what you say. Some companies have got away with getting their affiliates to say things that they can't legally say themselves. Make sure any statements you make are substantiated (backed up). If you can't back it up, either get rid of it, or write it differently. “When I used product X, I found that it worked really well for me” - this refers to your personal experience and is not the same as saying “This product will definitely do this for you”. Be careful with those “non-typical results” as well. Just because someone lost 200 pounds doesn't mean everyone will.
3. Give your readers some credit:
People are actually smarter than you think. Don't assume that if you tell people that you're making money out of promoting a product that they're going to ignore you. Apart from a few overly self-entitled people who think that everything on the internet should be free, most realize that people should be reimbursed for their time. To go back to my earlier example – I know Tiger got paid for that Gillette ad, but I still brought a Fusion Razor!
In my experience, the law typically trails technology by at least a decade and often it's a pretty bumpy ride to catch up. The best idea is to try and stay ahead of the law, rather than be caught off guard when it catches you out. I've always believe that honesty is a good thing – and I think that this will remain to be true in affiliate marketing.